When we talk about supply chains, the discussion is limited to the process of delivering goods from suppliers to end customers. There is, however, one more process that is often sidelined. The mission of the supply chain does not end with the goods reaching their destination. There is a process beyond that called "Reverse Logistics", where goods move further than their allotted destination.
Reverse logistics is associated with the process where goods are returned, re-used, disposed of, dismantled or recycled when they cannot reach the end customer. Customers will return goods if:
Today, reverse logistics is not seen as an inconspicuous part of the supply chain. It is perceived as a critical component as it provides the solutions for recovering and dealing with returned goods.
When the goods travel in reverse through the supply chain network, it requires proper management to keep it moving until its optimum value or profit can be attained without any losses.
The concept itself is relatively new. Having been implemented only in the late 90s, Reverse logistics management is a necessary process of the supply chain that encompasses procedures that deal with goods that do not reach the end customer. The procedures include:
The product is rebuilt using spare parts or new ones to enhance the product's life until an end customer needs it.
The original product goes back to the supplier because they do not want them or because it is damaged.
Refurbishment is the resale of a product that has been reinstated to a good condition.
Utilising a defective product or one that's reached its "use by" date instead of disposing of it is called recycling.
When products with a warranty are returned due to damages upon arrival or minor manufacturing defects, the product is fixed or replaced and returned to the customer.
No supply chain is 100% successful in delivering all the goods to their destination. Return of goods has become indispensable, especially with the surge in e-commerce procedures and online shopping. For every 100 goods that are delivered, there are at least 20 of them that return due to unavoidable reasons.
Reverse logistics has become a vital part of customer service as it deals with timely fashion issues. For manufacturers, it effectively reduces loss and causes no dent in the profit margin.
It is a win-win situation for everyone depending on the supply chain, thanks to reverse logistics. Businesses that are a part of the supply chain reap many benefits. Some of them are mentioned below.
A well-planned, well-managed and well-executed reverse logistics can turn out to be extremely profitable. Consumers take comfort in knowing about generous return policies that will guarantee no loss of payment if anything goes wrong in the supply chain. With return policies to cushion them, retailers may order more stock, and customers will also buy more products.
A generous return and exchange policy are far more attractive than a strict "no-return policy. This means that the company cares about its customers and is willing to bear responsibility when something goes wrong. It projects the company's ultimate goal is customer satisfaction and not simply making huge profits.
Without reverse logistics, there is no saying how many products will end up in landfills just because they have minor manufacturing defects. Any company concerned about the environment and controlling the safe disposal of unwanted products ought to consider implementing reverse logistics.
Companies may face unexpected incidences where they must issue a recall of products. With an effective reverse logistics system in place, it is no hassle to identify customers, trace them, reach out to them and collect the product.
Digital mailroom management is the complete automation of mailroom services that manages all incoming and outgoing mail. It is an effective replacement for the traditional mailroom, where all processes are manual, time-consuming and prone to errors. Digital mailroom management deals with all paper-based communication like emails, documents, files, invoices, and so much more.
But what about the incoming and outgoing parcels that companies receive and send out to their customers or business associates? Automated mailroom solutions can simplify the supply chain, especially reverse logistics, in their unique way. Parcels are stamped with barcodes that bear all the vital information such as the consignor and consignee's name, product sent, weight of the product, date and nature of the product( whether it is breakable or perishable).
An automated mailroom can track the physical goods' transit and receive immediate notification if it becomes a part of the reverse logistics. This enables the management to take proper decisions about handling the returns and making them profitable.
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