Ten Things You Should Know About Reverse Logistics

Reverse logistics has been around for decades in the manufacturing world.

Being a leading firm in this industry, Asset Recovery Company of America (ARCA) has a plethora of knowledge on the process.

The jargon might make it seem complicated, but it’s a pretty simple concept.

In short, reverse logistics is the opposite of the standard supply chain. It’s when goods are moved from their final destination to the starting point, or from the customer back to the manufacturer. There are several reasons why the product is returned, one being that it doesn’t suit the customer’s needs, or wasn’t what the customer expected.

At first, it may seem a little daunting, especially when we’re discussing the nuances between reverse logistics and traditional logistics. If you’re feeling lost on the topic, you’re going to want to read about these ten important things you should know about reverse logistics.

1. Reversed Logistics Differs From Traditional Logistic

Think of a line with four points. At the beginning of the line is the supplier, followed by: factory, distributor or wholesaler, and lastly, stores or consumers. Reverse logistics works in the opposite direction and moves the goods a step backwards from the endpoint. It also varies among different industries. For ARCA Industries, we have contracts with multiple municipalities, public and private universities, and states. We take their surplus and fully depreciated assets.

2. Why You Should Bother With Reverse Logistics

The whole purpose behind reverse logistics is to recover, increase, and reduce. It utilizes an efficient method for asset recovery. This process provides a way to get the most value out of a recovered product. By doing this, you increase your overall revenue. You can also reduce expenses of returned products or reduce disposal costs of products that no longer serve a purpose, such as obsolete devices.

3. The 5 Rs

Returns, reselling, repackaging, and recycling. These 5 Rs are critical to the process, but we’d like to focus on recycling. At ARCA Industries, nothing is ever sent to a landfill. Thus far, we continue to be a sustainable company. If we have a product that is rendered unusable, we properly

4. Inbound and Outbound Logistics:

The commonality between the two is the exporting of goods. The endpoint is where they differ. Inbound focuses on receiving, whereas outbound focuses on delivery. Inbound and outbound logistics are associated with supply chain management. Supply chain management starts at the raw components and makes its way to the end product, and then the customer. By, it is “the management of the flow of goods and services and includes all processes that transform raw materials into final products.”

5. Reverse logistics is important to have for your supply chain

To have a functional asset recovery system, it’s important to have a reliable process. This isn’t only beneficial for the customer, but for the manufacturer as well. You can provide a second return of investment and positive public attention for making sure you properly discard products, rather than the product ending up in a landfill.

6. There Are Different Strategies

Companies have a few options when it comes to strategy. They can either choose to work in-house or find a third party. The end goal, of course, is to find the most efficient way to extract value from assets. Some companies are focusing on return and repair policies, collaborating with retailers, or using new platforms to optimize their process.

7. Reverse Logistics Creates Value

There are a handful of ways this happens. From turning waste into sales, recycling returned products, creating and maintaining customer value, etc. Reverse logistics also reduces business risks, such as the risk of customer dissatisfaction. This happens when a business has a reliable and efficient reverse logistics management plan in order to operate this backward flow of assets.

8. Reverse logistics applies to retail

Most of us are all too familiar with the customer service desk at our favorite retail store. You buy a product, you decide it wasn’t what you were expecting, or perhaps it is damaged. So you stand in line, sometimes for an unbearable amount of time, to return your product. How do these products regain value? They go back up the supply chain. Sometimes, the products are recycled.

9. Reverse Logistics Is Good for The Environment

Reverse logistics have green implications. Since the process includes refurbishing and recycling products, it does more than just save money and increase profits. Having an efficient transportation mode also helps with reducing unnecessary transportation.

According to the National Retail Federation’s Chief Economist Jack Kleinhenz, “Historically, many returns end up in landfills, and the transportation of these goods contributes to retail’s carbon footprint.” Reverse logistics is one remedy to this situation.

10. Reverse logistics is necessary

Whether we’re talking about green initiatives or generating revenue, reverse logistics is important to implement. With the goal of recovering value from assets, reverse logistics is necessary in improving the effectiveness of the supply chain and making profits. This process supports the refurbishment of products as well as disposing of obsolete materials in an environmentally friendly manner.

ARCA specializes in handling supply chain management. If you want to learn more about our process, or if you’re interested in working with us, contact us today.

Do you want to learn more? Check out this blog: Ten Examples of Reverse Logistics

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