Reverse Logistics: Simple Definition

Reverse logistics is a part of supply chain management that moves products from the customers back to the retailer or manufacturer. A product generally travels from the retailer to the end customer in the course of a supply chain. In reverse logistics, returns and recycling are central to the process. This being said, remanufacturing can also be included in the definition. Sometimes reverse logistics can also include the consumer being at the end of the cycle, taking the role of the product’s final disposal, via refurbishing or resale.

Reverse Logistics: Technical Definition

Reverse logistics is the movement of a product from their final destination, back into the supply chain through returns, recycling, or remanufacturing - usually moving from the end customer back to the retailer or the manufacturer, or often also making the end customer responsible for putting the product back into the supply chain through refurbishing and resale.

What are the types of reverse logistics?

Multiple channels and causes can lead to opting for reverse logistics. After initial purchase any of the following can be a part of the reverse logistics process:

  • Returns

  • Returns Avoidance

  • Remanufacturing

  • Refurbishing

  • Packaging

  • Unsold Goods

  • Refurbishing

  • Packaging

  • Unsold Goods

  • End of Life

  • Delivery Failure

  • Rentals and Leasing

  • Repairs and Maintenance

What are reverse logistics activities?

Reverse logistics activities include the return of products into the supply chain system, in order to recover a full or partial amount of its value. This can include returns, recycling, reuse and remanufacturing. These 4 activities are central to reverse logistics and can either indicate a travel back to the retailer or manufacturer, or reselling from the end customer, back into the supply chain, regaining value from the product.

What are the steps of reverse logistics?

The steps of reverse logistics are:

  • Product Collection

  • Return Shipping

  • Assessing Returned Product(s)

  • Repairing, Refurbishing, Remanufacturing

  • Assessing Repaired/Refurbished Product

  • Recycling, Reselling, or Disposal

What is the difference between Forward Logistics and Reverse Logistics?

Forward logistics is the movement of products and goods from raw materials to final items which then reach the end customer. This is the straight-forward process of how the supply chain works, supplying the product to the customer demanding its consumption. Reverse logistics on the other hand is the end product finding its way back from the customer, back into the supply chain - either as a return or via recycling or resale.

What are the challenges of Reverse Logistics?

There are many foreseeable challenges that return logistics can see during the process, especially if the eCommerce enterprise is a small one. That doesn’t go to say that larger enterprises may not face similar issues. Some challenges include:

  • High costs

  • Lack of expertise in managing returned products

  • Vague rationale for returns

  • Transportation related issues, especially for international orders

  • Time consumption

What are some good examples of reverse logistics?

Reverse logistics, as seen, can face multiple issues. However, once an enterprise gets the hang of it, reverse logistics can be a great way of actually getting a larger customer base to interact with your brand. Some examples of this are given below:

H&M: H&M not only accepts back old clothes from its own brand but also other brands, to make their all-recycled range of clothing. This way, they not only encourage more people into buying their clothes, but also encourage them to interact with their brand by returning clothes. This is also a sustainable way of working with returned products. 

Amazon: Amazon, one of the largest retail platforms today, has a free return and replacement policy for certain products with a genuine reason for return. Amazon also ensures that the process is done in a timely and organised way through third party companies like FedEx. 

Dasani: Dasani, the packaged drinking water company, has collection points all across the US, for consumers to safely dispose of their bottles. These collection points are easy to access and also helps Dasani to recycle the bottles, keeping its environmental impact in check.

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