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).
Let’s say you run a craft brewery. Delivering kegs to restaurants would be part of your forward logistics process. Picking up empty kegs from restaurants and bringing them back to your brewery would be reverse logistics.
How reverse logistics fits into your logistics chain
The precise steps in a reverse logistics chain vary from business to business.
Reverse logistics operations do not directly correlate to revenue for many businesses, which is why they are often overlooked. But improving your reverse logistics process can help you build a loyal customer base. Your relationship with your customer doesn’t end at delivery. It goes much further.
4 Common reverse logistics examples, and the benefits you could be missing out On
Even if you’re not using reverse logistics on a day-to-day basis, you’re likely to need it at some point. The following examples illustrate just a few ways specific types of companies can benefit from excellent reverse logistics.
1 Pick-up and delivery services
Businesses that offer pick-up and delivery services rely heavily on reverse logistics. For a dry-cleaning and laundry service, reverse logistics includes picking up dirty linens and transporting them to the business location to be cleaned. Full-service laundry businesses need to plan pick-up routes in addition to planning delivery routes.
2 Rental returns
Businesses that rent out specialized tools, heavy machinery, or film equipment can benefit significantly from effective reverse logistics. The reverse logistics process needs to include picking up assets, inspecting rented gear for damage and ordering any necessary repairs or maintenance, cleaning, and eventually restocking so they can be rented out again. Fortunately, since rental companies know when the rental period ends, they can plan pick-ups and allot time for cleaning and maintenance in advance.
3 Returns and exchanges
Sometimes, for any number of reasons, a customer will need to return or exchange an item. When this happens, product companies must have an efficient reverse logistics plan in place. Without it, you won’t be able to deliver great customer support, and your customer satisfaction will plummet.
4 Large appliance or furniture removal
Retailers that sell large products like refrigerators or sofas can use reverse logistics to remove a customer’s old appliance or furniture. Some buyers won’t be able to dispose of the old appliance or furniture on their own. Hiring another company to come in and take away the old item adds another step to the process and can often be very expensive. By offering a solution to this problem, you can make your business stand out and increase customer satisfaction.
How to improve or expand your reverse logistics with a route optimization software
Optimizing your reverse logistics can increase your bottom line, improve efficiency, and retain customers. Here are just a few of the many ways a software can help.
Improve supply chain management
A software enables dispatchers and fleet managers to easily prioritize important pickups and drop-offs, optimize and combine pickup and drop-off routes for efficiency, and balance driver workloads. As a result, your entire supply chain becomes more efficient.
Optimise cargo space
A software can factor in the size and weight of items being picked up and dropped off to match them with drivers based on the capacity of individual vehicles in your fleet. This feature works to reduce the need for drivers to make multiple trips to depots or distribution centres, cut down on fuel costs, and increase the number of stops each driver can make during a single shift.
Expand remanufacturing and refurbishment services
Refurbishing or remanufacturing parts is common in the automotive and tech industries, but this process can benefit other types of businesses as well. Damaged or defective products could still have usable parts, and reverse logistics can help you capitalize on that potential. Instead of having a customer keep or throw out an imperfect product, you can expand your returns management process and get those sub-optimal parts back to be reallocated.
Minimise environmental impact through proper disposal
Consumers increasingly care about the environmental impact of their purchases.
Having the right software is key—whether you’re managing reverse or forward logistics.
This article was originally published at OptimoRoute.com