Reverse Logistics Management

Gaining Value from Reverse Logistics

Reverse logistics are after-sale activities conducted to end the life cycle of a product and add value to it. These activities include; customers returning good, distributors bearing excess products, refurbishment, recycling, and disposing of products. Forward logistics, on the other hand, involves the movement of goods from raw materials to end-user. Several challenges differentiate reverse logistics and forward logistics. One challenge is the high cost associated with reverse logistics. Many activities and expenditures take place to ensure the cycle of reverse logistics is completed (Lan, 2021). Some of these costs include transport costs for returned goods, inventory management of the returns, and labor costs. Another challenge is that warehouses have inadequate capacity to handle the returns. Company storage systems are built to store goods for distribution and raw materials. Reverse logistics has increased companies' need for more storage (Lan, 2021).

Manufacturers need to invest in reverse logistics. According to Jenkins (2021), reverse logistics enables companies to create value by converting waste products into sales. Most returned goods are sold at full price, which benefits the manufacturer. Elmas & Erdoğmuş (2011) emphasize reverse logistics as an essential strategy and vital to the bottom line because they have a positive environmental impact. Products that could have previously been disposed of carelessly are returned to the manufacturer and put to good use. Hence., reducing waste and carbon emission footprint. He also views reverse logistics as increasing customer satisfaction, a competitive advantage for the company. Customers only care about good products and services, and when they receive them, they will be committed to one manufacturer and trust them to fulfill their needs.  The commercial industry has recognized that managing the items in the reverse supply chain results in better customer service and improved profits (Walde, 2001).

Efficient reverse logistics attain value by reducing the manufacturing cost of a company. If a company can receive enough returns that they do not spend a lot of resources manufacturing products from scratch, their revenue will be more than the production cost, increasing profits. This applies to motor vehicle manufacturing, where over 70% of sales are remanufactured (Elmas & Erdoğmuş, 2011). Another example of increased revenue is customer satisfaction attained from receiving high-quality products. Consistent markets help companies to reduce marketing and advertisement costs. It did not take long before shippers started to realize that careful planning of the shipping of hazardous and recyclable items back to the distribution centers had positive impacts on the bottom line profits (Walde, 2001). With the proper strategies implemented, companies may offset and regain some of the lost profits from returns through reverse supply chain management.

Boost your business operations with our expert Marketing Services, Call Center Solutions, and Virtual Assistant Support. Whether you need to increase sales, enhance customer service, or streamline daily tasks, we’ve got you covered. Let’s take your business to the next level. Browse the services we offer to see how we can help your business grow.

References

Elmas, G., & Erdoğmuş, F. (2011). The importance of reverse logistics. online) International journal of business and management studies, 3(1), 1309–8047. http://www.sobiad.org/eJOURNALS/journal_IJBM/arhieves/ijbms2011_1/16guldem_elmas.pdf

Jenkins, A. (2021). A Guide to Reverse Logistics. Oracle NetSuite. https://www.netsuite.com/portal/resource/articles/inventory-management/reverse-logistics.shtml#:~:text=Importance%20of%20Reverse%20Logistics%20to

Lan, J. Y. (2021, September 26). Key Factors to Overcome Challenges in Reverse Logistics | SIPMM Publications. Publication.sipmm.edu.sg. https://publication.sipmm.edu.sg/key-factors-overcome-challenges-reverse-logistics/

Walde, J. L. (2001). Reverse logistics: A monogram. Army command and general staff Coll Fort Leavenworth KS School of Advanced Military Studies.

KeyWords:

Business strategies, Business growth, Business planning, Doctors In Business Journal, Business development, Entrepreneurship, Business trends, Business management, Corporate innovation, Digital marketing, Social media marketing, Content marketing, Lead generation, Marketing automation, Branding for businesses, SEO for online businesses, Cash flow management, Business investment opportunities, Business profitability, Financial forecasting for businesses, Effective business management, Organizational development, Strategic decision-making, Business operations efficiency, Technology solutions for business, AI in business, Digital transformation in business, Business tech trends.