The Role of Reverse Logistics in the Supply Chain

Reverse logistics play a significant role in the profitability of a warehouse that operates in the retail or e-commerce order fulfillment industry because it maximizes asset recovery, optimizes supply chain efficiency, reduces costs and improves customer experience.

A prime example of the importance of reverse logistics is evident during the holiday season. For the holidays and the first few months afterward, consumers return more items than any other time of the year. If a company isn’t equipped with a reverse logistics strategy, it risks losing revenue and future consumers.

What is Reverse Logistics?

Reverse logistics is a system of processes to move products, parts or materials from the end consumer or warehouse back through any stage of the supply chain.

Where traditional, or forward, logistics addresses the flow of product from manufacturer to consumer, reverse logistics deals with product returns

Reverse logistics also includes the return of leased equipment or unsold inventory, as well as the disposal or recycling of unused materials.

Reverse logistics can involve a series of different processes, depending on the company, but it is made up of two primary core components:

  • Returns management
  • Remanufacturing/refurbishing

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