Imagine a man having two sons. The man sets a bad example of a father and showers all kinds of indulgence on the elder one. He is always treated with the best of things and his achievements are lauded because he is deemed to be a class topper. On the other hand, the younger one, who also has all the potentials to rub shoulders with his brother, is given a step-son-like attitude. He is largely neglected; his achievements are not always acknowledged. With each of them growing up with a diametrically different treatment meted out to them, they develop different forms of approach towards the world. While the elder becomes more forthcoming, the younger one grows up to be a diffident individual, doubtful of his own acumen. While the elder one becomes a successful individual, serving his parents like a dutiful son, the younger one, owing to the rearing that he got, could never realise his talent, and could not attain the success he deserved and ultimately remained a failure throughout before the eyes of his father.
So much of allegory-knitting skills are being brandished on a business site, isn’t it? We had to put the creative hat on our heads to bring out befitting analogy of forward and reverse logistics, the elder and the younger son respectively. While forward or the traditional form of logistics has forever been the mainstay of any business, the reverse logistics has always been that ignored child whose potentials are largely untapped in. It is that branch of supply chain management which teems with a lot of scope but does not get its due optimisation which can lead to monetary, operational and environmental gains.
While forward logistics moves from manufacturers or sellers to the consumers, the reverse logistics follows the opposite trajectory. In this, the products flow from the point of sale to the point of origin. Significantly, it is the e-commerce giants, who have fully grasped the range of reverse logistics and have leveraged all possible resources to optimise profit, strike business accord, manage pool of happy customers and minimise cost. Consequently, reverse logistics, the oft-neglected kid in the block started giving peek-a-boo in the limelight and emerged to be a multi-billion dollar business in itself. Today, reverse logistics is a multi-party, multi-leg complex process which has been heavily outsourced by the manufacturers/sellers.
Due to the dependence on the third party service providers, reverse logistics requires a solid vision and an efficient solution that can give end-to-end visibility pertaining to the in transit products, their condition, shippers, repair depot, inventory et al. Reducing inventory as well as cycle time, meeting the customer demands and curtailing the expenses can pose a serious challenge before the sellers. On top of that, reverse logistics is not a predictable domain like forward logistics. Sometimes, in the B2B reverse logistics, companies may come up with stringent service level agreement. If this huge conundrum is taken into consideration, then lack of visibility in this form of supply chain may cost heavy penalties to the companies involved.
Traditionally the basis of reverse logistics is laid by the act of return. Customers give back the product that they buy due to various reasons. Either they are dissatisfied with the consignment or the products are damaged; either the product has a limited lifetime or the consumers have excessive inventory. Sometimes the products are recalled because they may pose threat to the environment or may breach governmental regulations. However, the fundament of reverse logistics is optimisation of all resources within the reach of the sellers. Hence, these products which are returned or recalled are not directly trashed in the dump yard. Either the spare parts of the products or the whole product itself is recycled, refurbished, repackaged, reconditioned and resold. Only the most redundant or the detrimental parts are disposed of and that too, following all the environmental protocols. To put it simply, reverse logistics is not only about distressed customers with all their guns blazing. It is an industry in itself which has been growing exponentially and has the objective of adding and retrieving lifetime and value to the products. This not only aids the companies financially with the markets of refurbished products gaining momentum, but also creates a contingent of loyal customers because retaining customers can be as daunting a task s creating new ones.
To achieve a smooth sail of reverse logistics, companies must rely on the customers. This not only makes the consumers feel that the sellers are constantly in touch with them, but also gives them the chance of venting their grievances or expressing their opinion. It is the job of the companies to cumulate the data and work upon it for the betterment of their businesses. Reasons behind the customers’ vexation need to be addressed so that no such trouble is caused in the future. Furthermore, there must be strong return material authorisation in place to faithfully evaluate the products returned. This can save a lot of resources from getting wasted, generate revenue through the re-use of the products and also help the logistics industry grow as well. All these statistical data can be adroitly channelized into the predictive analytical model so that the best possible return facilities can be provided to the customers.
To sum up the entire discourse, it can be pointed out that reverse logistics is the back-end service that has enormous prospective and has a burgeoning market reliant on it. It needs judicious approach towards streamlining the processes, effective handling of the customers and the cost and transparency in tracking and tracing. Though it is one domain of logistics that is heavily outsourced, it can be mentioned that all the expenses that are pumped in can reap long-term benefit to the companies from all the spheres. Thus, it is a good investment to go with.