Reverse logistics is the management of processes which handle the return of products, along with repairs, maintenance, dismantling, and recycling of products. It basically involves flowing backwards through the supply chain in order to gain maximum value when dealing with returned products.
Optimizing the internal reverse logistics process within a company can improve customer service, streamline the expenses incurred handling returns, and free up labor hours to be spent elsewhere. Logistics plays a large role in enabling a company to grow, if the processes are in place they can scale up along with the business.
There are a number of positive effects on a business which implements a reverse logistics process:
It’s easy to look at this process as being an increase in costs at first glance. It takes some additional hours to streamline the process, and there are some costs up-front to implement it. However, once you have the logistics in place to deal with returns efficiently, there are a number of cost savings.
Handling on return products are reduced, the process of checking for defaults is a lot quicker, and there is a clear chain of command. In addition, the lifecycle of products is often increased with the defective items being identified and repaired.
Every customer is valuable to a company. Handling the return of damaged or faulty goods needs to be high on a business’s priorities if they are to leave the customer satisfied. Having efficient reverse logistics in place to handle returns improves the experience for the customer, as well as the business.
The value gained through goodwill and repeat orders from customers satisfied with the returns process goes back into the business. Companies have seen their brand and reputation strengthened by word of mouth, and competitors will notice when they see improved processes.
Improved business efficiency
The goal of every business is to operate more efficiently. The supply chain is core to the smooth operations of a businesses flow, and improving this will improve the bottom line. There will be several internal gains as a result, such as reduced bottle-necks in supply, faster production, more repairs, less waste, and quicker customer response times.
Taking this approach to handling returns will not only give these internal benefits and make a financial difference, but will have a beneficial impact on the environment due to less wastage, and improve the company’s corporate social responsibilities image.
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