Logistics Industry November 9, 2009
Uncovering the Truth about Returns Management
The Reverse Logistics Association defines reverse logistics as, 'all activity associated with a product/service after the point of sale (POS). The ultimate goal is to optimize or make more efficient aftermarket activity, thus saving money and environmental resources.'
Reverse logistics is as it sounds, it is reversing the logistics of your products. Reverse logistics is a type of supply chain management that takes the products from the customers back to the manufacturer.
McKenna has broken down what you need to know about reverse logistics.
What is the Difference Between Reverse Logistics and Regular Logistics
Regular or traditional logistics is the flow of goods that starts with the supplier and ultimately ends with the customer. This flow includes all the necessary steps and destinations to accomplish the objective of ending with the customer. This may include distributors and retailers along the way.
Similar to wanting an efficient and effective logistics plan in place, you want to consider having equally efficient reverse logistics. This process typically includes many various moving parts that require flexibility and resilience to disruptions.
How Does Reverse Logistics Work?
The process of each industry's reverse logistics varies. Typically, a quality 3PL has a quick and proficient method of determining overages, shortages, and damages and communicates these findings to the client with pictures if necessary.
A visual and quality inspection is conducted to determine if the product is saleable or damaged.
If the material returned is damaged and/or not environmentally conducive logistics companies have the option to dispose of the product and can provide the client with a certificate of 'Destruction and Destroyed' for authenticity purposes.
Often returns are repacked, reworked, and or returned to the vendor.
Information, Information, Information!
A 3PL will often require an RGA (Return Goods Authorization number) that is provided by the client to track the quantity and product received. Providing a packing slip denoting what to expect with the shipment is critical. The client has to be aware of certain limitations that can impede a 3PL's progress when receiving returns and therefore we ask that details of disposition for your returns be provided as soon as possible.
Why is Reverse Logistics Important?
1. Reverse logistics has become a demand not a luxury
Reverse logistics has become an expectation by consumers instead of a luxury. In fact, 34% of customers will abandon their cart if there are no free returns. By implementing an effective reverse logistics process you increase your customer retention rate.
2. Increases supply chain visibility
By optimizing your reverse logistics you increase your supply chain visibility, identifying any vulnerability and inefficiencies. By identifying these weaknesses, you are able to begin optimizing your supply chain and ultimately save costs, increase customer satisfaction, and waste reduction and time.
3. Reverse logistics has increased with e-commerce
The increase of e-commerce on the rise aligns with an increase in reverse logistics. It is predicted that in the next several years the amount of returns are going to be over a trillion dollars a year. As a result, companies urgently seek an optimized and efficient reverse logistics process in place.
Read McKenna Logistics e-commerce and internet fulfillment services here.
Benefits of Utilizing a Reverse Logistics Program
Logistics companies with proven reverse logistics experience and specialized skills can frequently find savings, increase efficiencies, and improve services that their clients may not be able to identify on their own.
A returns management policy should encourage the client to get their product into saleable condition as soon as possible, saving the client money and keep inventory in impeccable condition. In the end, creating a streamlined process to manage returns can increase a company's bottom line.
Contact McKenna for your Reverse Logistics Needs!
Get an efficient and optimized reverse logistics process for your company today and in preparation for the future of your business's success. Learn more about our reverse logistics services here and get a tailored reverse solution with one of our specialists today.