Reverse logistics involves the flow of goods and services from customers back to the business, including returns and repairs. Efficient practices are important for reducing costs and increasing customer loyalty. It is becoming a competitive element in business.
Reverse logistics refers to the flow of goods and services between a business and a customer after the goods or services have been rendered. The use of best practices in reverse logistics is increasingly important in today’s market because it reduces costs for the company and increases customer loyalty. Some of the more common considerations in reverse logistics are returns, repairs, and the related transportation of goods to the company and then back to the customer.
In business, logistics refers to the activities and processes that help a company move a good or service to its customers. This is often called upfront logistics because it involves moving the product along the supply chain, from development, through manufacturing, to distribution. After distribution, products that need to go back to the company have to move backwards along another supply chain, which is what gives reverse logistics its name.
One of the most common occurrences in reverse logistics is returns. For example, returns may be authorized for distributors who order more inventory than they can actually move. In most cases, returning a product is costly to the business due to the costs associated with transportation, renewal, and redeployment. Good returns practices help a business save money and provide quick service to customers, increasing loyalty and helping the business earn more money in the future.
Repairs are another big component of reverse logistics, especially in the tech industries. Many products are covered by warranty and can be returned to the company, repaired and shipped at no additional cost to the customer. Again, this means the company will pick up the bill on repairs. Products that are obsolete or broken can also be returned for the company to recycle, which is another cost that the company often collects on behalf of the customer.
In the past, reverse logistics was not always seen as a business element that required smooth and efficient transactions. It is however becoming more important, with many companies competing for customers through the commercialization of their reverse logistics practices. Good reverse logistics practices require that the supply chain be as efficient at getting products back to the business as outward logistics is at delivering these products to the consumer.
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