The two important aspects of a supply chain are forward supply chain and reverse supply chain. Forward supply chain is something that we know of i.e., the flow of goods and services from manufacturer to wholesaler to retailer.
Reverse supply chain, an integral part of a supply chain process
1. Reverse Supply Chain, an Integral Part of a Supply Chain Process
Supply chain can be defined as the flow of goods, information, and finances from supplier to manufacturer to wholesaler
to retailer to consumer. The Council of Logistics Management define supply chain as "the process of planning,
implementing and controlling the efficient, cost-effective flow of raw materials, in-process inventory, finished goods and
related information from the point of origin to the point of consumption for the purpose of conforming to customer
requirements." The supply chain is also referred to as a value chain as it adds value to the organization by providing
what the customer wants and the market demands that too at a low cost.
All organizations have supply chains but just as the companies differ from each other in size and the kind of product
manufactured so do the supply chains. The important components of a supply chain are order management, fulfillment
solutions, distribution, logistics, warehousing, inventory control, retail packaging, and returns management. These
components are different pieces of the supply chain that have to be managed and coordinated in such a way that it adds
value to the company in terms of product quality as well as customer satisfaction but at the same time keeping the costs
down.
The two important aspects of a supply chain are forward supply chain and reverse supply chain. Forward supply chain is
something that we know of i.e., the flow of goods and services from manufacturer to wholesaler to retailer. Traditionally
those companies that managed effectively the forward flow of products to customers stayed ahead of the competition.
For customers, factors such as high quality products, on time delivery, competitive prices, low damage rates were
important and therefore they preferred only those companies that were capable of doing so. Today, customers’
preferences remain the same except that there is one more attribute that they look for in companies when they make
purchase decisions and that is the companies must be capable of managing a reverse supply chain as well. They do not
prefer companies that do not offer a good returns policy.
Reverse supply chain solution is the movement of goods and services from the customers to the retailers. Reverse
supply chain is not an entirely new phenomenon as it has been executed successfully in the automotive industry. The
reverse supply chain process was earlier perceived to be a valueless process and it was the fear of regulations that
forced most companies to invest in reverse supply chain processes. That is when they realized that reverse supply chain
is a good business weapon that reaped benefits when used tactically.
Reverse supply chain is an integral part of any supply chain process. A supply chain process is complete only when it
consists of forward and reverse supply chain processes.
Know more about: Systems Integration