Reverse Logistics overview
Reverse logistics is the process of handling the return of products from a consumer or a retailer to a manufacturer through the use of the supply chain.
Reverse logistics also encompasses the recycling of packaging and containers, reconditioning or refurbishing the products and disposition of obsolete goods. Reverse Logistics delivers condition-based returns processing, including execution and management of associated processes, such as exchange orders, refurbishment and repair requests, and return disposition.
Understanding reverse logistics
Reverse logistics is one of the least focused areas for many companies. However, the ability to recuperate assets and revenue in the supply chain is causing a refocus in this area. There is a lack of understanding of what is being returned and why. The strategies followed in reverse logistics are disparate due to the type of SKUs being handled. For example, an online consumable retailer and an electronics retailer.
Reverse Logistics provides comprehensive capabilities to manage the end-to-end process of reverse logistics for all types of companies including retailers, manufacturers and third party reverse logistics providers. The reverse logistics process covers all aspects like creating a return authorization, disposition of the product and the inventory returned is restocked, returned to vendor or scrapped.
Reverse Logistics breaks up a return into individual SKUs along with their disposition. Visibility provided to the disposition in the returns department allows for aggregation and routing of inventory to the respective areas. Routing is a multi-step process that incorporates requirements like refurbishment and repackaging before an inventory is restocked. The additional fields inventory attributes recorded include reason code, lot number, revision numbers and serial number.
The granular visibility provided through recording of the information allows tracking of inventory from the time of receipt and through the multi-step disposition process before an item is putaway to the appropriate area. Audit trail is also provided to track activities performed at a granular level, which includes return number, item, reason codes, disposition, inventory attributes and user.
Many companies are unaware of the amount of inventory tied up in the return and repair process. High-value products and parts may sit in technicians' vans or inspection centers for weeks before they are sent for repair or returned to stock. Often these parts require no repair and could immediately be resold to another customer. Reverse Logistics enables companies to effectively track items throughout the return and repair process and automates the procedures that return items to stock. Real-time status updates from service and repair organizations enable your company to truly leverage the reverse logistics cycle as a source of supply.