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Reverse Logistics. What Exactly Are We Talking About Here?

September 6, 2019


When a niche embedded in an entire industry is estimated to reach over $600 billion within the next five years, we have to ask ourselves, “why is it sitting on the backburner?”


Reverse logistics is essentially the return of a product back to the manufacturer – in other words, fulfillment in reverse. The logistical movement and cruciality for optimized procedural implementation will indefinitely remain a constant, but this entire process is often overlooked and underbudgeted within a company’s supply chain overview.


An efficient reverse logistics model can increase returns while simultaneously increasing customer and client retention. Unfortunately, the predominance of manufacturers and suppliers report little to no interest in properly investing in streamlined management regarding the flow of commodities being returned. While the majority propagates reverse logistics to be a vital part of any supply chain, only 3% classify it as a key area noteworthy of attentive optimization.


Returned products are mis-conceptually categorized as waste – an unprofitable byproduct of the supply chain process. This is simply a missed opportunity for heightened optimization through customer feedback, data collection, and evaluation. By properly analyzing metrics derived from reverse logistics, a manufacturer can alter the burden of a return into an opportunity for profit.


“Ultimately, all data collected about a returned product can be used to determine how best to reclaim its value and, in turn, where it will be sent next for proper reuse, recycling or disposal. Manufacturers can enhance customer satisfaction by preventing the mishandling of returns. At the same time, they can ensure that each return is mined for its value in the most effective manner possible and it’s reintegrated into inventory…


Accurate inventory data and real-time communication are key to ensuring that the sorting process runs smoothly, and that items are guided quickly through the return process. At this stage, it’s necessary to take inventory of returned items and keep tabs on the location, status and destination of each individual component, in order to move the logistics process forward” [Jim Dempsey, SCB Contributor]


Reversal data processed through the return supply chain allows for transparency and information to be readily available and accessible. Continual adaptation and supply chain evolution are vital to the health and longevity of any business model. Do not sleep on the efficiency that a fully optimized reverse logistics procedure can have on your company’s bottom line.


If you have any questions regarding the valuable information offered in analyzing reverse logistics metrics, feel free to reach out to us HERE for a comprehensive supply chain consultation.


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