Why Reverse Logistics is Important?

The traditional supply chain ends when the end customer makes their purchase. Logistics, either traditional or reverse, can have a significant impact on the asset recovery of the business. There are several reasons why reverse logistics is vital. Reverse logistics are the means of having an efficient supply chain and, therefore, efficient asset recovery.

Reverse logistics (or Closed-Loop Supply Chains) implement return process decisions, refurbishment, and disposition of products or machinery equipment, in an efficient and responsible manner, producing added value to the company. 

Stakeholders, (internal and external customers – staff, labor, shareholders, businesses) also consider sustainability and transparency very important. Therefore, from the marketing aspect, it creates a positive “word of mouth.”

Here are a few reasons why the adaptation of reverse logistics strategies is so critical to business growth:

• An effective way to extract the maximum value from products at the end of their life cycle. This includes the ideas of recycling where possible, repairing when it is feasible, among other ideas, to extend the product’s lifecycle

• A unique solution to decrease the costs of returned products and product recalls. These expenses include warranty expenses and shipping expenses of returning the product to the seller. This could also include the refunds on defective products

• A significant opportunity to improve and measure productivity in both warehouse activities and manufacturing

• When a machine or piece of equipment reaches the end of its useful life, business owners can achieve a second return on investment. By re-using and recycling of machinery, equipment, and other business materials, it shows that a company is conscious of the environment

• An environmentally responsible company will gain favorable attention from the customers (existing and prospecting). This will encourage new forms of competition within the industry. Increased competition will most likely lead to increased sales

• Allows to deliver Customer Service at lower costs and therefore the company gains competitive advantage

• The effective use of Reverse supply chain, enables the elimination of waste and identification of hidden costs in both manufacturing and business operations. A framework for continual improvement

The most important reason to adapt strategies of reverse logistics is because of its profitability. All of these other aspects of asset recovery lead to the same place; decreased expenses and increased revenues.

GLOMACS has newly introduced a training seminar titled Reverse Logistics Management which provides an in-depth knowledge on how to implement and manage Reverse Logistics and Closed-Loop Supply Chains.