The Importance of Reverse Logistics in Your Supply Chain
Reverse logistics is the process of moving goods from the point of consumption to the point of origin to recapture value or for proper disposal (Robinson, 2018). It refers to monitoring the life-cycle of products after they’ve reached the end consumer.
What is the importance of reverse logistics in supply chain management?
The importance of reverse logistics in your supply chain includes:
- Cost-saving benefits: By reducing the product return, repair, and replacement times, businesses can also reduce their inventory requirements, reducing the capital tied up in inventory( Struebing, 2020). Planning for returns and making the return order right can reduce related costs, including administration, shipping, transportation, tech support, QA, etc.)
- Customer satisfaction and retention: “Dealing with errors is just as important as making sales. If a customer had a bad experience with your product, you have to make it right. Repairing or replacing products will generate higher customer retention rates and boost customer satisfaction“ ( Struebing, 2020). In addition, an optimized reverse logistics process can help restore a customer’s faith in a brand.
- Reduced losses and unplanned profits: With excellent reverse logistics in place, you can quickly recover the loss of investment in your failed product by fixing and restocking the unit, scrapping it for parts, or repurposing it in a secondary market. A product that would otherwise have resulted in a loss can be turned into an unforeseen asset.
- Reduced environmental impact: All around the world, companies continue implementing newer and better solutions to lower their carbon footprint and improve their eco-friendliness. For example, reverse logistics helps companies identify and implement various ways to reuse, resell or recycle products and materials that would have ended up in the landfill ( Struebing, 2020).
Reverse logistics is vital; it improves your supply chain’s overall efficiency. It increases your productivity and profitability. Also, it enhances customer satisfaction and brand reputation as it is considered eco-friendly.
Check the following reference articles to learn more about the Importance of Reverse Logistics in Your Supply Chain:
- Robinson, A. (2018, April 5). What is Reverse Logistics? Is It Different than Traditional Logistics? Transportation Management Company | Cerasis. (URL)
- Struebing, M. (2020, October 20). How Does Reverse Logistics Impact Supply Chain Management? Redbird Logistics. (URL)
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