How to Maximize Revenue from both Forward and Reverse Logistics
Supply Chain is the movement of products or services from supplier to customer. But is customer always the end of the
process? A few years back, the answer to this question would have been yes since the concept of reverse logistics as a
value generating system never crossed the minds of the top management. However, today the business scenario is
entirely different from what that had been a few years back. Reverse logistics or reverse supply chain has grown to
become an integral part of all supply chain processes. So what exactly is reverse logistics?
According to Donald F. Blumberg reverse logistics is the "coordination and control, physical pickup and delivery of the
material, parts, and products from the field to processing and recycling or disposition, and subsequent returns back to
the field where appropriate." To put it plainly it is "the series of activities required to retrieve a used product from a
customer and either dispose of it or reuse it."
The existence of government regulations and the ever increasing customer pressure are what that forced companies to
turn their attention to reverse logistics. But what they fail to realize is that reverse logistics is a great opportunity for the
companies and enterprises to establish and fortify strong relationship with customers. Since customer loyalty and
customer satisfaction are the key factors to fast track success in businesses, proper management of reverse logistics is
the only effective solution to ensure customer retention. Companies must make sure to put in place a suitable returns
policy so that the customers can return products without any difficulty. Thus, with effective returns management,
companies and enterprises can turn the concept of reverse logistics from an additional cost to a potential revenue
stream for the company.
A supply chain process can said to be effective if there are no shortage and wastage of products. Companies and
organizations can gain steady growth and consistent success if they are able to narrow down the gap between supply
and demand and trim down the number of products returned. This is possible only if they implement proper policies,
quality control measures, effective packaging and proper tracking mechanism so that only good quality products reach
customers. This can help in cutting down returns dramatically. And if at all there are returns, steps must be taken to put
the products that need to be resold back into the forward logistics chain. In the case of products that need to be
refurbished or remanufactured, companies must speed up processes so that costs can be retrieved faster.
Thus, companies must invest in an effective supply chain solution to maximize revenue from both forward logistics and
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