Definition of "reverse logistics"
"Reverse logistics" is defined as "all efficient processes for planning, implementing and controlling the flow of raw materials, manufacturing assets, finished products and information relating to this flow, both upstream and downstream, in order to satisfy the end customer / consumer."
Reverse Logistic is a discipline that consists in managing and optimising flow from the consumer to the manufacturer. Its most common form is that of after-sales service but tends to develop towards recycling and more particularly that of WEEE or managements of private sales and / or e-commerce services. Defective product return, overstocks or end of life products are also closely linked themes.
What are the challenges for reverse logistics today?
The challenges of reverse logistics are significant and should be considered in terms of branding, sustainability and profitability. The term "reverse logistics" does not only refer to waste treatment. It also deals with the management of returned or unsold products. Properly managing reverse logistics not only reduces costs but can also increase turnover. The consumer is more loyal, the brand is better protected. Reverse logistics is fundamentally different from "conventional logistics" Manufacturers and distributors design the supply chain to deliver quickly and efficiently a continuous flow of products from the place of production to the places of consumption. This flow is different from the reverse flow on several points:
The reverse logistics levers
The operational and strategic levers of reverse logistics differ across organisations. Many companies still see it as a side effect of their business. Selling a product on the secondary market (sometimes called "second-hand market") is an admission that the original sale was not a success. This is why companies tend to postpone decisions on returns processing or disposal of unsold. The products in question end up losing more value than if the decision to clear the inventory was taken quickly.
Successful reverse logistics
With a better understanding of the nature and levers of reverse logistics, it is easier to manage this business effectively, the basic principles of which are simple and require common sense. The performance of logistics depends on a short process, with little handling and reloading.
The longer a product stays in the system, the more its value will decline. For example, any product with a technology component loses value every month. Companies must then minimise the time the product goes in the "reverse system" to recover the maximum value.
