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Reverse Logistics: Critical to Supply Chain Management

Reverse logistics is an important aspect of every business operation that involves any freight transport or e-commerce. Reverse logistics deals with a company's reuse of products and materials, and a company's ability to manage its reverse logistics can greatly impact its bottom line. We'll cover some factors to consider when developing an effective reverse logistics program for your business.

What Is Reverse Logistics?

Whereas normal logistics deals with how to get the product to the customer, reverse logistics typically deals with getting the product from the customer back to the distributor or manufacturer. It’s the process of removing goods from their final destination for disposal or capturing value. Often, reverse logistics comes into play when businesses process returned merchandise.

Reverse Logistics Management Factors to Consider

From the perspective of a business, the goal of an effective reverse logistics program is to minimize waste and costs, while also making sure to retain customers. Here are some factors you should consider as you develop an effective reverse logistics program for your business:

• Return Volume: If the same product is being returned repeatedly and in large volume, you may have a quality control issue. If more than a few defective units seem to be present in your inventory, you may need to consider a recall, a revision to your production process, or a review of your inventory to remove the item.

• Sales Percentage: Determine what percentage of your sales are lost to product returns. Are a good number of these returned products able to be reincorporated into your supply chain via reverse logistics? Brainstorm on ways to minimize these losses of revenue and try to determine how you can a profit from a loss.

• Condition the Product is Returned In: It’s essential to evaluate what condition a product is in when you receive it back. Conduct root cause analysis to determine what went wrong so you can prevent the problem from occurring again.

• Overall Financial Impact: Without monitoring and managing your reverse logistics, your company could be losing millions of dollars. According to the National Retail Federation’s research, the overall spending in the 2017 holiday season was $692 billion. Unfortunately, however, about six million packages were returned through UPS during the first week of January 2018. A substantial return volume can equate to a large financial impact. Regardless of the size of your company, it’s vital to evaluate how your company can turn a loss into new profits by utilizing reverse logistics.

Turn to Comet Delivery Services for Reverse Logistics Management

At Comet Delivery Services, we believe that reverse logistics are just as crucial as traditional logistics. Whether you are dealing with returns in e-commerce, leasing returns, product disposal, or recycling, Comet Delivery Services has the resources in place to help you develop an effective reverse logistics management plan. We will offer you the best solutions for your business needs while overseeing every step of the process, making our reverse logistics services a natural extension of your business. Contact us today to learn more about how our reverse logistical services can bring you convenience and cost-effectiveness!