Is Reverse Logistics a Core Competency or an Afterthought in Your Business?

Many businesses focus on forward logistics and fail to address reverse logistics.

If you sell products to customers, whether B2B or B2C, you are probably very familiar with the idea of forward logistics—the process that gets those products from your inventory into the customer’s hands. Millions of hours are spent optimizing forward logistics in a business, but how much time have you invested in the reverse logistics process? If the answer is not much (or none), then it could be harming your profitability. Making it a core competency of your operations can significantly increase profits and boost your competitive edge.

What is Reverse Logistics?

Sometimes people think that reverse logistics is synonymous with “returns”, and while returned products are part of the reverse logistics process, they are only one piece of a much larger puzzle.

Reverse logistics encompasses everything from:

  • Consumer-facing platforms to initiate returns (RMAs)
  • Shipping back to your warehouse or store
  • Refunds or exchanges
  • Warranty or repairs processes
  • Restocking or reselling (when possible)
  • Managing product recalls
  • Parts and replacement materials for refurbishing
  • Contract management
  • Recycling or disposal

How Does Reverse Logistics Benefit Your Business?

Optimizing reverse logistics within your business is not just making sure people get their money back after a return, today it’s a discipline that can improve profit margins, streamline operational efficiency, and provide a better customer experience. The lack of tools to create a better process can increase administrative and labor costs to manually track returns and manage customer correspondence, limit your warehouse space as it fills with returned inventory, and harm your efforts at being a sustainable company if you end up dumping a lot of old product in landfills.

Unfortunately for many businesses, reverse logistics remains an afterthought and increases volatility in profit margins while decreasing market share. While many businesses have struggled trying to come up with their own software programs, or tried hacking existing forward logistics software to better manage reverse logistics, the truth is that it’s an entirely different process and needs to be addressed as its own aspect of your overall business.

The good news is that if you aren’t doing a very good job with reverse logistics now, or the process is tedious and manual within your operations, a reverse logistics platform can quickly get your whole team up to speed. These all-encompassing software programs allow you to manage returns efficiently, track products, maintain customer contact, produce reports, and have a transparent view of the entire process from start to finish.

Talk to ReverseLogix today about how our reverse logistics software can help turn it around from an afterthought to a core competency in your organization.