Logistics is the word which is commonly known and used by everybody but have you ever wondered that it can also be reversed, i.e., the cargo which has reached its final destination can also be returned for various reasons. So, here in this blog we are going to share with you the interpretation and significance of Reverse Logistics.
What is Reverse Logistics?
Reverse Logistics typically means picking up the product from its final destination and sending it back to the manufacturer. Reverse Logistics is required because of various purposes like re-manufacturing, upgrading, improving and reprocessing. As the name suggests it means taking the process in reverse gear for the purpose of gaining maximum value or discarding it properly. In general, the manufacturer’s product is supposed to reach its customer but the activities that are involved after the sale of the product fall under reverse logistics. A customer orders a product for the purpose of using it but if the product has flaws, it is then sent back to the manufacturer. The manufacturer then has to arrange its shipping. Once the product comes back to the manufacturer, it is tested and on the basis of that, it is repaired or recycled or discarded. The logistics implied for such matters is known as reverse logistics.
Recycling of a product is a very common phenomenon but reverse logistics process is something which is very new to our ears. Though the word reverse logistics comprise of only two words, it is very challenging to find an ideal freight forwarder and also the cost involved in its processing is very high. It may consist of many things like :
- Re-manufacturing of products which can be done by adding reused or new parts to the product, 2. Resale of the returned product by giving it a new shape after examining the condition of the product.
- Servicing of the product.
- Providing returns to the customer which can be in the form of csh or kind, depending upon the policy of the company.
But reverse logistics in supply chain can be converted into a profitable process with better execution and planning. Have you ever thought of the reasons behind reverse logistics. There can be many customers who may dislike the product ordered by the customer as the product doesn’t match the product description, there is some damage in the product, the order is incomplete or the customer doesn’t need the product anymore. In all these cases the customer can demand for the return of the product.
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Now managing the reverse track of the product comes under reverse logistics. It includes assembling the product, checking the condition of the product, recycling of the product, identifying the problem with the product and then adding a solution to it and many more.
Many companies which consider reverse logistics as a troublesome process but there are some which can even earn profits out of it. This can be done by many ways like providing faster service of taking back the returned goods and giving the refund to the customers. This helps in making a faith in the customer’s mind.
Benefits of Reverse Logistics –
Reverse Logistics comes with various advantages which are listed below:
1). It has got a higher level of retention with greater customer service.
2). The costs involved in it like transportation, administrative and aftermarket are also low.
3). It comes with higher service market share.
4). The manufacturer to whom the product is returned can find new ways to improve the same product and shape it in a better way.
5). It also helps in improving the image of the company and gaining customer satisfaction.
Importance of Reverse Logistics in Supply Chain –
The importance of reverse logistics extends not only to the customers but also to the manufacturers. Those products which are about to finish their life cycle can be re-framed, recycled and repaired and the product’s use can be enhanced. In this case the material cost also gets reduced. With the introduction of e-commerce, the term reverse logistics has become even more dominant as the chances of returns have increased.
So, it’s a kind suggestion for you to plan your process for reverse logistics very strategically. Choose the right freight forwarder when it comes to reverse logistics. Choose SAR.
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