[box type="shadow"]In simple terms, logistics is the process of the product being sent from its origin to the point of consumption. Reverse logistics is exactly the opposite. Anything that involves products being transferred from the point of consumption to the point of origin is known as reverse logistics. This most commonly refers to returns from the consumer to the retailer or manufacturer. It also includes recycling packaging materials.[/box]
[box type="shadow"]Consumer to Retailer Returns
A consumer may return a product to the retail establishment in which it was purchased. The reason for returning the product could be that the consumer purchased the wrong product, the product is damaged or there is a recall from the manufacturer. In the case of a recall, the consumer may have to send the product directly back to the manufacturer.
Retailer to Manufacturer Returns
When a consumer returns a broken product to the retailer, the retailer may have to send this product back to the manufacturer. Manufacturers have its own guidelines for returns. Larger retailers have more of an opportunity to return products to the manufacturer for almost any reason. This is because the business of the large retail establishment is important for the manufacturer, and it will do anything to keep from losing that business. Smaller retail stores will have a more difficult time in dealing with the manufacturers. This also directly affects the return policies that these stores are able to offer the consumer.
Management looks to create processes that cut down on consumer returns. In addition, it creates the method by which returns are handled and streamlined. The last piece of returns management is the redistribution of goods. Handling return operations are important to cut losses for broken merchandise and to keep consumers happy by making the process simple. By monitoring return policies and shipping, management looks to save money on the bottom line. This is the importance of reverse logistics.
Recycling materials is the least important piece of reverse logistics when it comes to affecting the bottom line. By recycling packaging and containers, the business is able to cut costs. This may also include redesigning the packaging or containers that are used to ship the products. Using less material and/or recycled material will help bring down the company’s overhead.[/box]