The full definition of reverse logistics, as according to The Council of Logistics Management, is the process of implementing, controlling, and planning the cost-effective flow of finished goods, raw materials, and in-process inventory . ... Some reverse logistics examples are: Return of goods by customers.
What are the significant problems and issues with reverse logistics?
High reverse logistics cost. Inability to understand the rationale of returns . Poor visibility into products received. Inadequate labor resources to “handle” returns.
What is an example of reverse logistics?
Apple is a fantastic example of a successful reverse logistics system. Apple manufactures iPhones and other products, which are then sold in various stores across the world. ... When consumers return to a store to buy the latest model, Apple offers consumers discounts on a new product if they turn in their old product.
What is reverse logistics in supply chain?
Reverse logistics is defined as the process of moving goods beyond their typical final destination for things like re-use, capturing value, or proper disposal. In supply chain networks, materials flow from suppliers through to end customers. ... The customer no longer wants the product.
What does reverse logistics include?
Reverse logistics is any part of the logistics process where goods or services move from what is typically their final destination (the customer) back to their origin (or in some cases, to a third location). Reverse logistics encompasses work that happens after a product is delivered to a customer.
What is reverse logistics in your own words?
Reverse logistics is a type of supply chain management that moves goods from customers back to the sellers or manufacturers . Once a customer receives a product, processes such as returns or recycling require reverse logistics.
What are the 3 types of logistics?
When referring to logistics flows, we are talking about the movement and direction of certain goods, parcels, packages, items, or information within a supply chain network.
What are the benefits of reverse logistics?
- Reduced administrative, transportation, and aftermarket support costs.
- Increased velocity.
- Increased service market share.
- Higher achievement of sustainability goals.
- Greater customer service and higher retention levels.
What are the objectives of reverse logistics?
The primary goal of reverse logistics is to recover value from assets to increase revenue and reduce expenses . Establishing a reverse logistics strategy can also boost the efficiency of a traditional supply chain by separating the operations.
What are the two major operations of logistics?
Transportation and warehousing are the two major functions of logistics. Transportation management focuses on planning, optimizing and executing the use of vehicles to move goods between warehouses, retail locations and customers.
How does reverse logistics work?
In reverse logistics, goods move from the end consumer back to the seller or manufacturer . The most common example of reverse logistics is when a consumer returns a purchased item for a refund. The returned products may be resold or disposed of permanently.
What are the steps of logistics?
- Storage, warehousing and materials handling.
- Packaging and unitisation.
- Inventory.
- Transport.
- Information and control.
How do you handle reverse logistics?
- Put return labels on your products. ...
- Separate them with bins. ...
- Prioritize your boxes. ...
- Use durable boxes. ...
- Make better collaboration with the retailers for handling reverse logistics. ...
- Ensure an optimized data processing.
Why is reverse logistics expensive?
When products and materials move backwards in the supply chain, they incur costs , which then affects total revenue numbers. However, these inbound logistics costs are typically dispersed across the entire organization instead of being assigned to a cost center like other manufacturing and selling costs.
What are types of logistics?
- Inbound Logistics.
- Outbound Logistics.
- Third Party Logistics.
- Fourth Party Logistics.
- Distribution Logistics.
- Reverse logistics.
What are the main drivers of reverse logistics?
Generally, the companies carry on reverse logistics because of the profit, obligatory forces or social pressure. According to this classification, the drivers are named as ; economics, legislation and corporate citizenship (De Brito and Dekker, 2004).
