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Reverse Logistics Management – Making Profit Out of Returns Reverse logistics is the process of moving a product being returned by the consumer to the manufacturer, for re-use after refurbishing or for disposal. It is rapidly becoming an integral component of retailers’ and manufacturers’ profitability and competitive position. Reverse logistics is an integral part of supply chain management systems because of the cost and service associated with the process. It is a specialized segment of logistics focusing on the movement and management of product and resources after the sale and after delivery to the customer. In supply chain today, product returns are the most significant aspect of reverse logistics. The types of items that come under reverse logistics processing include product returns, product recalls, end-of-lease equipment, old or obsolete items being replaced and innumerable other items. Global Logistics Solution and Supply Chain includes not only product that needs to be quickly restocked for resale, but also product that needs to be repaired or refurbished, often under warranty, and product that needs to be sold to an alternate channel or disposed of safely and in accordance with environmental regulations. If an organization does not have a reverse logistics in place, any item that has been returned from a consumer may be received and stored in the warehouse until it is inspected by the quality department which could take days or months. This not only blocks precious warehouse space, but causes loss to the company also. It also fails to address the potential benefits of repairing items for customers or refurbishing returns for potential resale. The returns process has now become an important part of the processing that takes place in the warehouse. By outsourcing their post-sales needs to a 3PL logistics, companies can focus on their core competency – manufacturing innovative products. A 3PL can also provide added value in an increasingly competitive marketplace where even the most cutting-edge technology can transform into utility or commodity status. Best Practices in Reverse Logistics Implement Returns Process- The best practices would involve supplying a return label with the product when the item is shipped, that has the customer’s order number and will help inform the customer about his product once it comes in the warehouse informing about the status whether it’s a replacement or credit memo to be processed . Warehouse Operations – When a product is returned with the order number and barcode it makes it simpler to place the item in a location specifically for returns processing. Refund, Restock, Refurbish - The quality department determines whether the item is suitable for a customer refund and is covered by returns policy. If they find that the item can be repaired and resold, it is sent for repair, this can create revenue for the company. Many items are returned because the packaging is damaged and these items can be repackaged and placed back into stock. Reverse logistics has the potential to become a key route to cost optimization. A good system allows the firm to quickly obtain credit for returned product, which improves cash flow management through the reverse logistics pipelineWith the right reverse logistics in place the cost of disposal (either by refurbishing or repairing the product) can be turned into a profit for your company and improve customer satisfaction. Organizations should consider reverse logistics as part of a successful supply chain. Some companies are keeping the efforts in-house while others outsource it to 3PL Learn more about :- Reverse logistics & global supply chain management


Reverse Logistics Management – Making Profit Out of Returns