The Process and Challenges of Reverse Logistics

Reverse logistics in a warehouse setting involves the process of planning, implementing and controlling the efficient, cost-effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal.

In layman’s terms, reverse logistics involves moving goods from their typical end destination for the purpose of increasing value or for proper disposal. Reverse logistics includes the management and sale of surplus inventory or raw materials, as well as the returns of leased equipment, machines and other hardware.

Because reverse logistics involves product or materials moving at least one step back in the supply chain, it can pose challenges. But reverse logistics can also deliver certain benefits. In this guide, learn about the process of reverse logistics, its benefits and its challenges.

What is the Process of Reverse Logistics?

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.

In recent years, reverse logistics has become a key component of any successful streamlined supply chain. In a warehouse environment, reverse logistics pertain to any of the following activities after the initial purchase:

• Returns
• Remanufacturing
• Refurbishing
• Unsold goods

• End-of-life
• Delivery failure
• Equipment rentals/leasing
• Equipment repairs/maintenance