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The Role of Reverse Logistics: Managing the Lifecycle of Products to Maximize Value in the door-to-door cargo delivery Process

Home/Blog/The Role of Reverse Logistics: Managing the Lifecycle of Products to Maximize Value in the door-to-door cargo delivery Process
Reverse logistics

The logistics industry has proved its worth in the last couple of years, especially during the pandemic when the international movement of essential goods made it possible to provide some of the most important supplies reaching to those in need. Globally, businesses and countries alike have realized its importance and together, the world is now putting in all the right efforts to maintain the supply chain to avoid any breakage in the future. While it important to maintain the logistics chain for a free-flowing global business scenario, it is equally important to maintain the reverse logistics chain to ensure that the product cycle remains intact. In the world of fast-moving goods, competitive services, and quick consumption, creating a smooth channel for reverse logistics is just as important for the sustenance and flourishing of businesses as is the importance of maintaining a normal product cycle. This is especially true for the door-to-door cargo delivery system that witnesses a huge amount of goods moving in reverse. Let’s get to know why.

What is reverse logistics?

Reverse logistics is a kind of supply chain that is responsible for moving goods from the customers back to the sellers or the manufacturers. Processes like the return of goods, recycling, or reselling amount to reverse logistics, which starts at the end customer, move through the distributors and back to the manufacturers or sellers.

The boom in the e-commerce businesses, companies trying to woo customers with attractive return policies or simply having the option to return a product purchased has made reverse logistics a trillion-dollar industry worldwide. Several companies rely heavily on these services for the value creation of their goods as well as retaining their customers. Whatever the business, it is difficult to have repeat purchases is almost impossible without reverse logistics, hence the growing importance of this industry.

Almost every industry requires reverse logistics management. The food industry must have a robust reverse logistics process in place to manage packaging material, rejected goods/orders to salvage spoilage, etc. The construction industry requires it to take the leftover or surplus construction material back to the dealers for reuse. It creates a more sustainable and cost-saving supply chain. With the changing consumer behavior and more and more businesses emphasizing sustainable processes, the reverse logistics industry is in the middle of a massive boom. And experts believe that it’s just the beginning.

What this sector needs is better management, a flawless system, and sustainable efforts to develop a chain that benefits all industries. Different products, depending on their nature need different movement management to minimize wastage and a quicker turnaround time. Consumers expect quick services with a no compromise in quality attitude. This sure puts a lot of pressure on those who handle the supply chain, but with the right processes and correct system, this global challenge can be streamlined, better managing the product cycle and providing quality services to the end-user.

Ways to create an effective reverse logistics cycle

In reverse logistics, it’s all about efficient management and the right implementation.

Processing the return initiation

This process starts at the moment a consumer initiates/requests a return of a product. It should meet a quick response to produce a satisfying return experience. This process includes authorization of the return, identifying the condition of the product, approving faulty goods, scheduling shipment, refunds, etc. It’s an important process that should be made efficient for successful product cycle management.

Dealing with the return

This process is responsible for handling the returned goods. Depending on the reason of return, the product’s condition, and the return policies, the product is channelized to different disposition options – reuse, refurbish, resell as new, resell as used, or scrap. An efficient system will allow you have to have this information before the product arrives at the location. This saves time and makes the return of goods faster.

Keep them moving

The biggest setback for a business is when its products are stationary, which means they are not moving in the purchase cycle. So, ensure that your processes are quick and efficient so that the goods are immediately moved to where they are supposed to go in the reverse logistics chain. Whether they need to be sent to the workshop for repair or to the scrapyard for dumping or recycling, it should be done quickly.

How an efficient reverse logistics system benefits your business

One of the biggest benefits of reverse logistics is that it keeps the goods moving. It results in cost reduction, value creation, risk reduction, and most importantly, completion of the product cycle. Reverse logistics has impacted businesses so much that more and more organizations are now emphasizing having an effect in place. Studies show that 70 percent of businesses across the globe are now investing in creating a circular economy that follows the traditional logistics cycle and then continues through a closed-loop supply chain.

This system is not only sustainable, but companies can create new uses for their products. Through repair, refurbishment, and recycling, products that are seen as waste can be used in different ways, resulting in higher value creation.

Another significant benefit of this is compliances. Several countries have rules and laws that expect companies to have a sustainable ecosystem that reduces waste and encourages recycling and reuse. Minimizing waste production, landfills through dumping of discarded goods, etc are other laws that countries have in place.

How it creates value and product cycle

Reverse logistics create value and add to the product cycle by turning rejected and returned goods into something valuable and usable. By reselling, reusing, recycling the returned products, companies can make sure that there is minimum wastage and maximum usage. It also provides several other benefits including:

  • Greater cost reduction
  • More customer satisfaction
  • Enhanced customer service
  • Higher customer retention
  • Reduction of loss
  • Stronger brand sentiment
  • Higher sustainability

Logistics, whether traditional or reverse is an important part of every business. The better the supply chain the higher the chances of businesses earning well. All businesses need to maintain a robust reverse logistics system to maximize their earnings and enjoy all the benefits it provides.

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