If you are managing a small-to-medium business, then you may have heard about the term ‘reverse logistics’ being thrown around. But do you know what exactly it entails and how its beneficial to your supply chain management? This relatively simple backend service can be very powerful as a means of boosting your sales and lining the pockets of everyone involved in your operation.
Let’s take a look at what Pendulum Logistics reverse logistics is and what benefits it can bring your business should you choose to implement it.
What’s reverse logistics anyway?
Reverse logistics refers to the system by which a products life-cycle is monitored after being purchased and taken home buy consumers. Ways in which they can be monitored include how it is thrown away or disposed of, if and how it is recycled and what ways it can create value after its ostensive purpose if fulfilled.
One of the biggest impacts on a supply chain is when products are returned by the customer to the manufacturer. It allows you to get a better level of insight into this phenomenon so that you can minimize its negative impact.
The majority of supply chains will neglect the fate of their products after they have been purchased because they don’t see any utility in gathering information about post-purchase patterns. Getting the full picture of your product’s life cycle can help you identify things you could improve or drive more sales with.
There are plenty of different reasons why a consumer would return a product after they bought it, but all of the possible circumstances of said return are monitored by this system. You need to keep in mind the different stages that a returning product needs to go through:
- Testing and quality control for error
- Identification of issue
- Document said issue
- Repair, recycle and restock the product (or destroy if unsalvageable)
Paying close attention to the returns process of your goods means you can more easily develop new methods to ensure that such returns aren’t repeated. This ultimately means more satisfied customers, better word-of-mouth advertising and eventually improved sales.
The benefit of using reverse logistics
The majority of organisations will obviously see returned products as a negative sign but may not know how to leverage this with the use of a reverse logistics system. Some of the benefits of adopting this kind of system include:
Quicker turnarounds and happier customers
Once your supply chain is fully optimised you will be able to complete every stage much for efficiently and significantly reduce your lead times. Quickly delivering a repaired product to a consumer can also help re-engender them to the business.
A good customer service experience, even when they are making a complaint, creates more loyalty with your brand than discounts and special offers. Being seen as a company that reflects on its mistakes and quickly fixes them by promptly addressing the customer’s problem is only a good thing.
If you go into your business expecting that products will be returned at some point, you can more easily and affordably handle the issue when it arises. Instead of trying to organise a reverse logistics supply chain in a reactionary way – do it ahead of time.
Reduce material losses
Having a good reverse logistics system means that less returned products will be thrown away or scrapped. This helps protect your investment in your merchandise.