The concept of logistics – moving and storing goods from acquisition to consumption – is fairly well known to businesses and their consumers. Logistics is how we make things happen, whether it’s in our businesses or in our personal lives. But what exactly does “reverse logistics” mean and why is it so important to a company’s success?
All goods typically have a final destination, but on occasion, these goods may leave that final destination and move to another point. Consumers may return the items or the item may have reached the end of its life, such as a washing machine or a computer. Reverse logistics is what happens to goods in the post distribution process; it’s the science of capturing otherwise unavailable value for a product that has been returned or has reached the end of its life. Recalls, recycling, restocking, returns, hazardous materials, seasonal inventory, damaged merchandise, salvage and more all fall under the umbrella of reverse logistics operations.
Once a product reaches its intended final destination, the consumer may decide that it is not something they want to keep; this is where reverse logistics comes into play. The foundation for reverse logistics is customer satisfaction, so companies need to communicate with their clientele and clearly identify why the consumer was dissatisfied with the product. Once these reasons are known, measures can be taken and future success is much more likely.
One of the key components of reverse logistics is to ensure that consumer returns are more user-friendly than they have been in the past. By optimizing technology through improved barcodes and return labels, consumers can more easily and quickly return their product, speeding up the entire process for all involved, and speeding up the company’s ability to resolve any unanticipated issues that appear.
Another way to minimize return rates is to simply assess and optimize the readability of any instruction manuals. A common reason why customers return goods is because the operating manual is too complicated and/or contains distracting and confusing errors. By revising and rewriting instructions so that they are accessible to customers, the number of returns for this reason will obviously decrease.
When goods are returned, it’s critical for a company to have a meaningful process for what to do with the product. Often, goods can and should be recycled. This increases sustainability, reduces costs and helps the customer. Most consumers are interested in being socially responsible when it comes to returning or disposing of their goods, so companies need to communicate their process to their consumers.
Many businesses have been able to implement successful reuse and recycling programs, and have reduced the amount of waste that feeds into their supply chain and landfills. Operating costs are lowered, and the companies have been able to recover other costs from areas like packaging procurement, raw material, waste disposal and regulatory compliance.
A commitment to reverse logistics means a commitment to increased environmental awareness and sustainability, something all companies should strive for.
This article was submitted by the University of San Francisco’s higher education program, which offers an online master certificate in supply chain management and sustainable supply chain management. For more information on the courses offered please visit http://www.usanfranonline.com.