Reverse Logistics, a Strategic Activity of All Enterprises
Compared to earlier times, today enterprises no longer consider reverse logistics as a pain in the neck. Instead, it enjoys
strategic importance among enterprises as reverse logistics is considered as a means of generating revenue, profit, and
competitive differentiation. Hence, supply chain management today involves reverse logistics as well.
Reverse Logistics and Returns management are terms that are used interchangeably but the fact of the matter is returns
management is one of the important aspects of reverse logistics. Its other important activities are repair, recycling,
reuse, recalls, refurbishing, source reduction, product substitution, remarketing, disposition of products to name a few.
The important functions of the reverse logistics channel are collection and sorting, storage, transportation and
distribution, compaction, shredding and identification, processing or filtration, retro-manufacturing and full disposal.
According to the Aberdeen group, reverse logistics is actually a process that involves four important stages namely
Logistics: It deals with authorizing return, recovering, sorting, testing, repairing, remanufacturing, reconfiguring,
restocking, reshipping, and disposing of materials.
Sales/Marketing: It is remarketing refurbished products and parts for resale through liquidation or adjacent
Finance : It is validating in-warranty repairs and recovering appropriate costs from suppliers.
Customer Service : It is receiving in-bound customer calls and ensuring compliance with service contract
Today reverse logistics is a strategic activity of almost all enterprises as it helps to
Recapture lost revenue
Reduce operating costs
Improve product uptime
Comply with environmental regulations
Elevate brand loyalty
Increase customer satisfaction
Quite a few enterprises manage reverse logistics in-house but majority of them depend on supply chain solution
providers for managing their reverse logistics. These third party logistics providers help enterprises to
Remarket complete systems and major components
Transform old assets into valuable investments
Monetize depreciating assets
Find reusable solutions for unutilized assets
Save the cost of warehousing stock that has gone stale
Moreover, collaborating with supply chain solution providers help enterprises to focus on their core competencies.
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