As many shipping companies work side-by-side with 3PL providers, others continue to pave the way
in handling reverse logistics. The main reason is due to the increase in future revenue following the
sale of products.
With customers spending at least 5 times the price for products and service, many companies have
begun to implement an approach that sees product recalls, replacement parts, service contract
returns, and product returns as being profitable.
Considering that this is what makes up reverse logistics, it is still in the infancy stage in many
company’s growth strategy. Luckily, having a plan to account for this is becoming more and more
essential when it involves asset recovery.
With many used items, repairs, and returns many companies are afraid of the possible brand
implications. This is why they strive for brand protection so that their products never end up in a
Reverse Logistics Come with Difficulties
Many companies today are still unaware of the reverse logistics costs. This may be due to their
processes being poorly defined or lack of support. With the overall nature of product returns,
systems must learn to be flexible in order to manage a return system. With many products designed
to include a variety of efficiencies, there are still some designs that include the impediments to
disposition that every product should have. So as a business management team plays their role in a
product, they need to be continuously informed about all costs and possible revenue. This way once
entered into an agreement, all marketing and financial goals will be fully understood.
Just like any other process reverse logistics don’t come without a hitch. The number one problems
experienced with reverse logistics are both poor workflow and paperwork. The reason behind it is
because of the many facets involved in the process including manufacturer, disposer, reseller, and
Returns Need To Be Profitable
Under reverse logistics products that are returned are considered equal to products sent to market.
This makes it much more important to have management improve their system for asset-recovery if
they want to turn it into a profit.
As a reverse logistics program is developed, individual responsibilities should be set. This means
that even though a logistics department oversees product returns, the overall management of asset
recovery may be under the production department. This means the product that has not reached the
consumer yet is under the responsibility of the production department. It is also great to remember
that approaches that are well documented benefit both traceability and consistency.