what is reverse logistics?￼
Reverse logistics is an important (and unavoidable) part of freight management, but if performed correctly and efficiently, this process of handling the returns or recycling of a product can reduce costs and add value to your business. To begin streamlining your business’s logistics management service, it’s important to have a successful reverse logistics process in place.
reverse logistics simplified
When a product needs to be picked up from the delivery destination and returned to the seller another store, DFO or manufacturer, your business requires reverse logistics. Reverse logistics involves delivered goods travelling back through the supply chain, typically to be sold at another store, online or if it is a return to vender scenario. It encompasses any additional freight management that occurs after a product reaches the customer. This reverse movement in the supply chain involves careful management and workflow to ensure cost effectiveness without interrupting the regular movement of outbound goods.
reasons for goods to reverse through the supply chain network
Typically, returned goods invoke imagery of the customer returning faulty or unsuitable products, but there are many reasons for products to be transported back through the supply chain network. Reverse logistics offers the opportunity to recoup any lost value from the product and reduce expenses in the many instances a return is necessary.
This can occur at many stages of the supply chain and varies from industry to industry. From the supplier returning a faulty product to the manufacturer for repairs or returning outdated stock for remanufacturing and recouping raw materials. Retailers can also return unsold goods and the freight of empty packaging to the manufacturer another store to be reused or sold. Customers can also return goods in perfect condition, such as if the delivered product is the incorrect size or unsuitable for their needs, directly to the retailer for resale or faulty products to the supplier for replacement
the benefits of reverse logistics
While some freight companies and supply chains stop measuring success once the product is sold and reaches the end client, noting and tracking the life cycle of the product can offer further options for cost effectiveness and waste reduction. Categorising the reason for returns and identifying patterns can also determine issues with a product or its marketing, creating the opportunity for corrections and future savings.
Returns can also turn a customer’s disappointment in a product into a positive experience with the business, transforming a costly liability into a brand benefit. A smooth returns process can become a competitive edge that encourages repeat customers. To gain that competitive advantage and establish a cost effective and swift returns experience, a business needs efficient processes in place relating to the administration, transportation, repairs, quality assurance, or the potential disposal of returned goods.
reverse logistics process
While the details differ between industries, typically reverse logistics involves the customer contacting the support team due to an issue with the product or the product not selling. Unexpected returns can come with many operational challenges including products returning in varying conditions from damaged to unpackaged. Reverse logistics also requires the quick allotment of warehouse space for processing returns. This can be difficult to achieve for smaller, retail businesses but a seamless operation for an experienced, specialist logistics provider
Once the customer initiates the return process, the support team schedules return transportation and approves a refund or replaces the good depending on the business’s returns policy. At this stage, the customer should be encouraged to classify the reasons for the return and identify the product’s condition. This will help to determine if the product is fit for immediate resale or needs to return to the manufacturer for repair. The product is then collected and arrives at a processing warehouse where it is sorted depending on the condition and transported to the supplier, manufacturer or recycler.
complete logistics solutions
At elite logistics Australia, we specialise in providing logistics solutions for all your freight management needs. From 3PL warehousing to retail transport solutions, we provide end-to-end logistics services with our expansive warehouses with 12,000 pallet capacity across Australia. Backed with the latest supply chain technology, a dedicated warehouse team, streamlined pick and pack procedures and an in-house freight fleet, our services are second to none.