Understanding Reverse Logistics and Major Benefits

Understanding Reverse Logistics

Almost all the retail businesses should contend with eliminating the unnecessary costs that are connected to this supply chain process. A popular cost center in this supply chain is the retail reverse logistics. If left unchecked, the reverse logistics will disrupt the whole supply workflow, cutting down as well as leaving the retailers with inventories, which cannot be sold. However, when reverse logistics gets optimized, they will present the opportunity for the retailers to maximize their sales & reduce the costs.

reverse logistics

What’s reverse logistics?

The reverse logistics is a process to move products & materials a step back in this supply chain. It is associated with the returns and recalls; however, it is used for asset recovery, recycling programs, and disposal. Some examples of the reverse logistics are:

  • Recycling materials and parts for the new products
  • Refurbishing defective items so they are resold
  • Returning pallets and other packaging to manufacturer to be reused
  • Retrieving any unsold products from the retail shop

Benefits of Partnering with Third Party Logistic Provider

Organizations who partner with the sophisticated 3rd party logistics provider gain from the higher controls over this whole supply chain and resulting in the improved inventory management, higher visibility, decreased costs as well as enhanced risk management. Particularly, the benefits of using the expertise of 3PL for the reverse logistics management create greater controls over recovering, inspecting, and disposing of the returned products. Companies find it tough to predict which items will have normal fail and return rates.