Reverse logistics is the flow of goods from the consumer back to the manufacturer. Unlike distribution, where goods are dropped off, reverse logistics picks goods up. For example, this could be the pick-up of returned or unwanted items or reusable transport packaging such as wire cages, pallets, or plastic crates.
The most prominent form of reverse logistics happens within our day-to-day lives. For example, we purchase a piece of clothing online and when it arrives, we decide that the color is not quite for us, so we start the process of returning the item back to seller, this is where reverse logistics starts a new supply chain process.
There are two main aspects to reverse logistics, one is the returns mechanism which from a consumer side, could be the return of an item that was not desired. From the business side, it could be the return of an item that has remained unused or unsold for a given period of time and may no longer be required.
Within a business environment, an additional category is the ‘Circular Economy’ which means that items which have been used could still have some residual value and therefore could be recycled for use or need to be disposed of in a particular way (such as electronic waste).
What is the difference between reverse and traditional logistics?
In the traditional logistics flow, you have a delivery from an importer or manufacturer to a distribution center. From there, the items delivered are then broken up into smaller delivery segments dependent on what those items might be and where they need to go.
For example, a national retailer will have number of regional distribution centers that act as hubs for the logistics flow. In the regional distribution centersitems are being received and then allocated to the right area of the center to be set up for delivery to a retail store.
The reverse part of the logistics describes items being sent back to a manufacturer. These items would come back to the distribution center either directly from a consumer or from a store, or in some cases, they could bypass the distribution center and go directly back to the manufacturer. Aa good example of this direct approach is if you had ordered a Personal Computer (PC) which was faulty and returned it back to the manufacturer.
Both traditional logistics and reverse logistics can be used in combination to reduce any empty miles or empty loads and optimize efficiency and cost. To put this combination into a real-life scenario, if you receive a delivery, they simply drop it off at your address but if you want to return an item, you are generally required to go online, print a return label, and take it to a location for the item to be returned. This is an example of empty miles which, in parts, has an inefficiency built in if the delivery driver is not then collecting returns from the same location.
If retailers were able to combine a delivery and a return, they would be able to reduce the empty miles and reduce cost in the long term by developing improved logistics processes.
The traditional logistics flow is where you have a manufacturer shipping, for example, a full truckload to a distribution center where it is going to be broken down into smaller batches and then distributed to various locations. Reverse logistics is starting with a single item where it ends up back at a distribution center where they are going to perform a check to see if the item is reusable. Is that something that can be shelved again because it is unopened? Can it be restocked? Can it be put back on the shelf? Does it need to be thrown away? Can it be reconditioned?
What are the advantages of Reverse Logistics?
The key benefits for the consumer include the ability to order a quantity of items with the assurance that you can easily return what you do not want or need. For a business, it is a cost that can be optimized, mitigated, and reduced wherever possible.If a business does it well, in terms of being cost optimized, they are able to expand their e-commerce footprint, particularly if they are an online business.
No matter what type of goods you sell, managing your supply chain in reverse can be a challenge. Zebra’s advanced mobile computing, scanning, printing and locationing technologies work with your enterprise systems to give you total visibility across your operations, allowing you to efficiently manage and process returns for greater profitability.