Reverse logistics refers to operations that relate to product and material reuse. It refers to the process of planning, executing, and monitoring the proficient and cost-effective flow of raw material in-process inventory, finished goods, and information from the consumption point to the manufacturing point to add value or dispose of them properly. It is the reverse of the logistics where products move from end-users to distributors and eventually to the manufacturer. Customer relationship management and information management are essential parts of the reverse logistics process.
Customer Relationship Management
CRM is the technique used by entities to ensure the management of customer interaction and potential customers. The process helps streamline organizational operations, build customer relationships, increase sales, customer service, and increase profitability. Primarily, CRM aims to improve customer service relationships and help in customer retention and promoting the sales of the product ( Chen et al., 2019) . The strategy also allows companies to learn about customers' needs and behaviors as a way of promoting and creating a stronger relationship with them. It facilitates efficiency and effectiveness when dealing with customers in an organization hence retaining them.
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CRM and IT in Reverse Logistics
Information technology is essential in enhancing the effectiveness of the customer relationship management process. Information technology facilitates the availability and organization of customer data necessary for CRM ( Kazemi et al., 2019) . An effective reverse logistic process requires adequate and proper data collection and reporting. Therefore, entities use information technology in structuring information and understand the various reasons that customers used to return the products. Technology is applicable in determining the root causes of the multiple returns and how the company needs to respond. Companies use RFID technology to protect the company against the return of counterfeit products. Companies can now use the electronic product code (EPC) to reserve and identify the unique product items.
Essentially, customer relationship management is not merely software. It helps organizations and individuals in different customer-related processes. CRM focuses on meeting the present together with the future needs of customers. In relationship building between the organization and customers, interactions and communications between the parties are developed through the use of information technology (Yadollahinia et al., 2018 ) . Customers communicate with entities through emails, video conferencing, and telephones to request their products' return. The communication process helps to present complaints that help the company to understand the needs of their customers. Information technology gives an effective way to facilitate customer management by offering clients with an excellent experience.
Evolution of Reverse Logistics
The rise of the reverse logistics traces back during the American Civil War. During the period, General William T. Sherman was faced with issues of supplying movements to his armies through the hostile territories. Therefore, he made the armies to use everything that was available to them. The shortage of materials during World War II led to the rebuilding of the automobile parts from wastes. During the early days, reverse logistics were determined by ease and customer involvement. It focused on the return process. It enhanced the returning of defective or unwanted products. The ability to obtain, integrate, as well as enhance the intelligent analysis of data. Traditionally, companies were not in support of customer returning products. However, they eventually adopted the process due to the disadvantage against companies that did. Therefore, they were forced to adopt the same customer convenience or risk losing their customers to rivals.
Customer’ Influence on Reverse Process
Returning of products does not just happen when customers are dissatisfied with the products; there are instances when they return reusable or recyclable products to enable the company to remanufacture the products. Usually, customers enhance the process by stating their reasons and how they wish the product to be. Customers use the return process to learn about their customers and products that are likely to meet their needs. Customer dissatisfaction gives entities a challenge to try harder and deliver better goods and services hence retaining their customers.
Reverse Logistics in Amazon
In Amazon, returns are processed and handled in various ways. Returns are routed through the reverse logistics centers (Amazon). Particular products go back to the site while there are those that go back to the producer for liquidation sources. Retailers give users the option of returning products to Kohl’s Drop-Off locations and Amazon Lockers at whole foods. The company’s return policy requires that items shipped from Amazon be returned within 30 days from the shipment days through the Online Return Center. Items are said to take approximately 25 days to reach the company after their return. Amazon takes two working days to process the refund after receiving the returns (Amazon). However, the refunds take 3-5 days to reflect in the customer's account. Examples of the products that fall under the 30-days return policy are warehouse products.
Amazon Reverse Logistics Process
Conclusion
A reverse logistics of a company is the opposite of the normal logistics process. It is the process through which products move from the end-users back to the manufactures for reuse or improvement in case of customer dissatisfaction. Usually, entities use reverse logistics to enhance customer management. The application of information technology improves the process by ensuring easy communication between the company and the clients. The establishment of websites enhances easy access of the customer personnel through which customers can address their needs. Reverse logistics helps in learning and understanding customer needs, thus improving customer satisfaction.
References
Amazon. Help and Customer Service. https://www.amazon.com/gp/help/customer/display.html?nodeId=201819200#GUID-7AE4D2C8-CAF9-465E-A54A-2D1C166C9385__SECTION_7D8EBD42E0184CC3BE4335003DD2222F
Chen, D., Ignatius, J., Sun, D., Zhan, S., Zhou, C., Marra, M., & Demirbag, M. (2019). Reverse logistics pricing strategy for a green supply chain: A view of customers' environmental awareness. International Journal of Production Economics , 217 , 197-210.
Kazemi, N., Modak, N. M., & Govindan, K. (2019). A review of reverse logistics and closed-loop supply chain management studies published in IJPR: a bibliometric and content analysis. International Journal of Production Research , 57 (15-16), 4937-4960.
Yadollahinia, M., Teimoury, E., & Paydar, M. M. (2018). Tire forward and reverse supply chain design considering customer relationship management. Resources, Conservation and Recycling , 138 , 215-228.
