Reverse logistics is the process by which the products or merchandise that were delivered to the customer travel the reverse path in the supply chain and are returned to the vendors or manufacturers.
Returns can range from defective products to containers or packaging for recycling. Any process that involves a return in the supply chain is a reverse logistics process.
All this can be a significant burden for companies if they do not have a system that manages returns well. That is why many companies are looking for more efficient forms of organization and formulas to make returns profitable and recover the value of the returned items. It is estimated that 30% of items ordered online are returned, compared to 10% of returns for purchases made in person.
Keys to an efficient reverse logistics process
To begin with, it must be said that no two processes are the same, since it depends on the activity of the company, the sector in which it operates and its specific needs.
Assessment
In order to improve, an analysis of the entire process must be carried out in order to detect at which points the most errors and losses occur.
Have there been errors in the expeditions? Are they seasonal products? Was the merchandise defective? Is it about pallets or packaging to reuse?
Return Classification
All returned merchandise must pass a quality control that determines its next destination in the supply chain. The objective is to try to recover the maximum possible value to minimize losses.
Warehouse space
One of the most common mistakes is not giving returns the importance they have and not having your own space in which to receive, classify and manage the returned merchandise.
En el caso de que sea un gran volumen, una opción es buscar un proveedor externo que se ocupe de toda la gestión.
Transport optimization
Since it is about saving costs, it is necessary to coordinate direct and reverse logistics, take advantage of deliveries to collect returns, and thus minimize transportation costs.
Establishing collaboration and communication channels with both carriers and suppliers can facilitate returns and save a lot of money on transport.
Metric control
To have the reverse logistics process under control, you have to know the numbers, so you have to choose the most relevant KPIs based on the activity you carry out.
Knowing the volume of returned products and how many of them are destined for resale, recycling or reuse will allow you to analyze and improve the system, control management costs and know what is the benefit obtained from the returned products.
Having a warehouse management system to manage reverse logistics is essential to have real-time information on each step of the process and to monitor the implemented strategy.
If you want to evaluate your reverse logistics system and consider solutions to manage it, contact Terra Logistika and we will advise you without obligation.