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Understanding the Importance of Reverse Logistics Management

Reverse logistics has occupied a very low place on the logistics priority list as the companies were not as diligent in reverse logistics as they were in conventional areas of logistics. It was once an almost forgotten part of the supply chain, but now reverse logistics is gaining increasing importance in the current market scenario. It is being seen as an important “value add” to the growth strategy of the companies.

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Understanding the Importance of Reverse Logistics Management

  1. 1. Understanding the Importance of Reverse Logistics ManagementReverse logistics has occupied a very low place on the logistics priority list as the companies were not asdiligent in reverse logistics as they were in conventional areas of logistics. It was once an almost forgottenpart of the supply chain, but now reverse logistics is gaining increasing importance in the current marketscenario. It is being seen as an important “value add” to the growth strategy of the companies. Reverselogistics can be defined as “Reverse logistics is the process of moving products from their typical finaldestination to another point, in an attempt to recapture some of the value of the product through resale,reverse auction or for the purpose of disposal of the item if not resalable or reusable. The returns policiesof most retailers in the name of customer service have caused reverse logistics to become a very visibleprocess.”As far as managing the returns are concerned companies re-use them, re-sell them, leave them to a thirdparty or destroy them. However, companies are more likely to benefit if they can also make use of theinformation that comes back with returned merchandise.Reverse Logistics can deliver a high degree offunctionality through interaction with a Connectivity Platform. The main feature in reverse logistics is thesource and reasons for returns. Exchanging information for return orders, authorizations andacknowledgements, stock updates, inventory specifications and sales orders, transport, pick list andrepair orders, direct to/from transport providers, warehouse and repair centers and exemption handlingcan help understand the reason for returns. Reverse Logistics can be a strategic asset that can reducecosts. By understanding the reason for the occurrence of returns, it is possible to identify the variousprospects for enhancing the decision-making.With appropriate policies, Reverse Logistics Management can automate returns across multiple channelsto ensure you know what is being returned, from where it is being returned and the actual reason for thereturn. Having such policies in place can also improve your firm’s profitability, and also help companiesimprove relationships with key customers.Understanding the importance of reverse logistics management, many companies these days havechosen to either apply new solutions to better manage their reverse logistics process or, alternatively, tooutsource their reverse logistics operations to service providers. A third party service provider will be ableto take advantage of economies of scale and specialized expertise in planning reverse logisticsoperations.Also read on - order fulfillment, order management system

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Reverse logistics has occupied a very low place on the logistics priority list as the companies were not as diligent in reverse logistics as they were in conventional areas of logistics. It was once an almost forgotten part of the supply chain, but now reverse logistics is gaining increasing importance in the current market scenario. It is being seen as an important “value add” to the growth strategy of the companies.

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