Dynamics of Reverse Logistics Management
Reverse Logistics Management automates returns across multiple channels to ensure you know what’s coming back, from where and why. For the most part, reverse logistics has occupied a very low place on the logistics priority list. But this is starting to change, driven reverse logistics and green supply chain initiatives, growing rules and regulation regarding disposal of hazardous materials and other areas that impact reverse logistics processes and recognition by companies that they can save greatly by paying greater attention to reverse logistics issues as well as building stronger relationships with key customers. It can manage returns both coming and going—from the consumer and to the vendor.
Reverse Logistics delivers a high degree of functionality through interaction with a Connectivity Platform, exchanging information for return orders, authorizations and acknowledgements, stock updates, inventory specifications and sales orders, transport, pick list and repair orders, direct to/from transport providers, warehouse and repair centers and exemption handling. Reverse Logistics is no longer a necessary evil but rather a strategic asset that can reduce costs.
The Challenges in Reverse Logistics
The key aspects of returns include the source of the returns and reasons for the returns. If you understand why returns occur it helps identify opportunities for improving supply chain processes and decision-making. The goal is to identify why returns are happening and work to reduce their volume. Common obstacles most companies encounter are:
- Tracking goods as they travel through the returns process.
- Complying with eGovernment regulations
- Adjusting to increased customer pressure
For an Effective Returns Management
- Think strategically about returns management – Suitable returns policies can strengthen relationships with key customers. Such policies can also improve your firm’s profitability by keeping fresh product in the marketplace and by efficiently managing the operational logistics of handling returns.
- Develop Appropriate Gate keeping and Avoidance Policies – Quality control initiatives in the manufacturing and distribution processes can help avoid returns. The cost and customer dissatisfaction associated with returning product damaged in transit, is totally avoidable.
- Operational Policies and Procedures – If proper policies are in place it helps in ensuring that products that need to be resold needs to be placed into the forward supply chain and product that requires refurbishment or remanufacturing needs to be identified so as to maximize value and get back the cost faster.
Effective reverse logistics management can improve a firm’s profitability, enhance customer relationships, and be an essential part of an integrated supply chain management strategy.
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