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The Importance Of Having Reverse Logistics In Your Company

If you run a company you’ve probably heard of the term reverse logistics before. But do you know what it actually is or how it affects your supply chain? This simple service can do wonders to boost your bottom line and bring in more pay for everyone involved.

Below we are going to explore what reverse logistics actually is and the benefits of implementing it into your business.

 

What are reverse logistics?

Reverse logistics refers to monitoring the life-cycle of the products that you produce after they have been purchased by your customers. Some ways in which you can monitor this includes how it is disposed of after use, recycling and reusing options and any other way that your product can create value once it has been used.

The factor that affects the supply chain the most are products that have been returned to the manufacturer from the customer.

 

Returned goods

While most supply chains stop measuring the success of their products once the consumer has purchased them, it doesn’t paint the full picture that you could achieve if you were to monitor them afterwards.

There are many reasons for a customer to return a good once they have purchased it but all scenarios typically fall under reverse logistics. You should consider the different stages that the returned product goes through once it has been returned:

  • The returned product arrives
  • It is tested for error and quality control
  • Identify what is wrong
  • Document the problems with the product
  • Repair, recycle and restocking of the item

If you pay close attention to the return and rectifying process of your products it will allow you to have new methods in place to ensure that the same mistake doesn’t occur again.

 

The benefits of having reverse logistics

While most companies will consider returned goods as a set-back don’t fully understand the benefits it can bring with an effective reverse logistics system. Some of the benefits that your company will have access to with an effective and efficient system include:

 

Faster turnaround

Once you have the process down to a tee you will be able to return the goods, reimburse customers and repair/recycle the defective product as soon as possible. Having this process be fast can help restore a customer’s faith if they have had a bad experience.

 

Keep your customers happy

Promptly dealing with errors is just as important as making sales in this industry. When consumers have bad experiences they can be quick to jump to social media to vent their frustration and anger. Dealing with an issue and making your customers happy once more can be a helpful learning tool to have in the future in the case that something goes wrong.

 

Reduce costs

If you go into your business plan with the idea that some items may be returned, you will be set up a lot better when that situation arises. Instead of creating a mess of a supply chain for returns at the last minute, you will have a well thought out process that has been created ahead of time.

 

Reduce the loss of investment

When a product is returned it should definitely not be thrown away altogether just because a consumer deems it unfit for their purpose. You should be analyzing the product to see where the error is, where it originated from and how the defective product can be reused or repaired. In a situation where you would’ve just outright loss money you are able to identify a supply chain issue and repair and restock the item to get back some of those lost profits.

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