Reverse logistics, just as the name suggests, is the opposite of ordinary logistics in the supply chain, whereby the product moves from the end-user to the warehouse. Customers usually have the privilege of taking a product to whatever source they obtained from having reason to do so. In such cases, the manufacturer will have to plan how to do reverse shipping, followed by repairing, recycling, or disposing of the item. However, it is possible to minimize the chances of product return since it usually results in losses. Therefore, successful implementation of reverse logistics programs will yield many benefits in a supply chain, although few challenges are associated with it.
A reverse logistics program is highly beneficial in a supply chain. One of its advantages is lower cost while ensuring value recovery, i.e., customers get value for their money (Coyle, 2011). As a result, customer service quality will escalate, increasing the amount of profits that a company will generate in the long run. Although a reverse logistic program has several disadvantages, a few difficulties may be encountered when incorporating reverse logistics in business operations which may be complex and hard to define. One of the challenges is the high cost required for successful implementation. According to Redbird Logistics Services (2019), for companies that employ manual systems in reverse logistics, most of the returned products will have to be discarded or taken back to the manufacturer. Besides, it is also difficult to calculate the tangible returns. However, overcoming the challenges will result in increased competitive advantage and greater brand awareness.
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Firms need to formulate ways of enhancing supply chain operations. Remanufacturing procedures and warranty claims management are some of the appropriate measures. Besides, business organizations should expand their financial reports to include reverse logistics rather than just calculating the value of a good up to the time delivered to the consumer. Such measures will eventually improve the level of customer satisfaction, which translates to more profits.
References
Coyle, J.J. (2011). Transportation: a supply chain perspective . South-Western Cengage Learning.
Redbird Logistics Services (2019). How does reverse logistics impact supply chain management? Redbird Logistics Services. https://redbirdlogisticsservices.com/how-does-reverse-logistics-impact-supply-chain-management/
