What is Reverse Logistics?
Reverse logistics makes reference to all the operations meant to minimize loss by reusing or repurposing materials and products. For example, refurbishing or remanufacturing can be seen as processes of reverse logistics. This type of logistics is meant to reduce costs regarding the flow of raw materials by controlling them in a more effective manner, to make better use of available inventory, and to recapture the value of used goods and materials or dispose of them in an adequate manner.
In the traditional logistics system, the goods move from the manufacturer or supplier to the customer. In the case of reverse logistics, the products make a step backward at least once, going back to the distributor, for instance, from the customer. A good example of reverse logistics is the case of a broken product. The defective product will have to go all the way from the customer to the manufacturer. The manufacturer will have to take action to ship the product, test it, dismantle it if it can’t be fixed, recycle the parts, and dispose of it in a proper manner. This is a typical reverse logistics flow.
Reverse Logistics System:
The reverse logistics system encompasses all the operations connected to the reuse of materials and products from the logistics flow. It can be seen as the process that takes back goods from their final destination, which is the customer in most cases, with the purpose of getting back their value, partially or entirely, or for disposing of them adequately. There are situations in which the destination of the products or materials is represented by stocks. Thus, items or materials from overstocks can also enter the reverse logistics system so that they don’t become waste.
Reverse Logistics Process:
The reverse logistics process starts after an item has been sold. This item can be returned, refurbished, remanufactured, or at the end of its life, entering this way the reverse logistics system. However, items that are unsold, are leased or rented or are sent for maintenance operations and service, they all go through schemes of reverse logistics. As the name suggests, the reverse logistics process takes the product from the customer and moves it across the logistics system in a reverse manner so that it reaches the manufacturer or provider.
Reverse Logistics Management:
A proper reverse logistics management will help manufacturers and suppliers minimize loss, cut costs, and make better use of their inventories. To improve the management of a reverse logistics system, several steps need to be covered. To start, there’s the need for improved policies regarding the return and repair of products. Then the communication and collaboration with retails should also be improved, as they are responsible for the sale and return of goods. Processes should be optimized, by using data more effectively and the transportation and logistics part of the scheme should be reconsidered. Reverse logistics and many other key areas related to logistics are discussed during the supply chain management diploma and supply chain management certification programs, which are offered by AIMS.
Similar to reverse logistics, inverse logistics also refers to taking back products from the user and sending them to the manufacturer or seller. But this process is about taking products that are damaged, defective, unwanted, or out-of-use products. The main idea is to prevent these items from having a negative impact on the environment, by being disposed of in improper ways. As discussed earlier, it about regaining the value of a product, if possible, it not its proper disposal will complete the process.