Inverse logistics, practices and procedures
Inverse logistics covers the practices and processes established for the return of goods from the points of sale to the manufacturer, in this article some strategies will be seen to be able to carry out an inverse logistics.
The reuse of products and materials is not a new phenomenon, the recycling of paper waste, the deposit systems for refreshments, etc. They are examples that have long existed. However, reverse logistics as a research field is relatively new. A set of knowledge about the field of reverse logistics that only emerged in the last two decades is beginning to develop more or less. Especially during the last decade, reverse logistics has obtained recognition both as a research and practice field. Although reverse logistics has been receiving more and more attention in recent years, many companies have not realized its importance and what is inverse logistics.
Inverse logistics represents all operations related to the reuse of products and materials. It is the process of planning, implementation and control of the efficient and profitable flow of raw materials, inventory in process, finished products and information related from the point of consumption to the point of origin in order to recover the value or disposition. Recount and restoration activities can also be included in the definition of reverse logistics. The inverse logistics process includes the management and sale of surpluses, as well as equipment and machines returned from the hardware lease business. Normally, logistics treatment with events that bring the product closer to the customer. In the case of reverse logistics, the resource goes back at least one step in the supply chain. For example, the goods move from the client to the distributor or the manufacturer.
Some examples of reverse logistics are:
- Return of goods by customers
- Return of goods not sold by distribution partners due to the terms of the contract
- Reuse of containers
- Reconditioning of goods
- Repairs and maintenance according to guarantee agreements.
- Reviewing of goods from returned or defective items
- Sale of goods to a secondary market in response to returns or excess stocks
- Recycling and elimination of goods at the end of their useful life.
Steps to implement reverse logistics
- Filter income to control defective merchandise or does not meet the established return requirements.
- Manage time cycles to define what to do with each return.
- Implement an information system to keep a record of returns, and the actions to be taken in each case.
- Establish centralized return centers to handle the return process. There, the products will be ordered, processed and sent to their respective destinations.
- Goods recovery policy to classify and have returned products: surpluses, expired, obsolete, waste. This recovers economic and ecological value to reduce waste.
- Inverse logistics requires reverse negotiation: the bargaining phase where the value of the product is renegoti.
Some recommendations are:
- Systems Design: Inverse logistics should be considered when planning the systems, including the return policy at all points that have contact with the client.
- Presentation: Providing all information about the product or service before the purchase is made.
- Impulse management: You should always give the option to return the acquired merchandise, since many of the time customers buy by impulse and the case can be requested in which they request a cancellation for this reason it is important to have an area or personal area For an area of returns.
- Advice: If there are guides that can offer information to the customer, your purchase will be more effective or even return it.
- Monitoring: The post sale process should not be set aside for any reason, this occurs more frequently in online purchases, having no guaranteed delivery times for the customer.
- self-configuration: allowing product customization makes the number of returns decrease.
Inverse logistics vs. Traditional Logista
The Council of Supply Chain Management Professionals, defines traditional logistics as the process of planning, implementation and control of the efficient and profitable flow of raw materials, inventory in process, finished products and related information from the point of origin to the point of consumption In order to meet customer requirements, however, reverse logistics manages the return of products in the supply chain.
Some reasons why reverse logistics should be applied are:
- Generates competitive advantage in the market
- Decrease in production costs, savings in the purchase of supplies, etc.
- Increase the level of customer service with the application of guarantees
- Social and environmental responsibility
Inverse logistics may present various challenges, some are reflected in raw materials, product design since not only easy processing is required but easy to deseng, other challenges that it represents are in the planning and processing processes, they must allow the combination of the combination of Raw material with recyclable material, production programming, inventory management, capture of new market niches.
Strategies to enhance reverse logistics
It is important for companies to focus their attention and resources on reverse logistics. Although reverse logistics can be a challenging sector to improve supply chain, there are several ways in which companies can use to succeed.
Review, review and optimization of return policies and suppliers agreements. Returns are becoming a competitive area that can differentiate one brand from another. For this reason, return policies must be kept updated and subject to periodic reviews.
It is also important to review and update the agreements with suppliers to optimize the inverse logistics process with this, it can be helped to reduce cases of excess stock and their return.
On the other hand, it is important to integrate safeguards into the return policies to avoid abuse of them, since this results in a load for the inverse logistics process.
Outsourcing is another strategy to optimize reverse logistics, this is an agile solution that can be rapidly and effectively implemented. Depending on solution suppliers and situations, it can also be a profitable strategy.
At the same time, if a company already has a solid supply chain infrastructure, using it with the purpose of improving reverse logistics could be a more profitable and financially more intelligent option. One of the disadvantages of this strategy is that the quality of the process is no longer under the control of the company.
Warehouse automation is making its way to the development of the supply chain. This is thanks to its ability to solve a series of storage problems.
Together with any required hardware element, there are several forms of software that can track the stock, store data and carry out processes without human intervention. Although automation costs can be high in advance, automation has the potential to drastically reduce both losses and future expenses in an inverse logistics process.
Centralized return centers
One of the strategies implemented that has optimized reverse logistics in certain cases of use is the implementation of centralized return centers: they are warehouses and centers that only process returns and deal exclusively with the flow of goods back to the supply chain, not They worry about the distribution forward, unlike the distribution centers that deal with both the distribution of goods that descend through the supply chain and the supply chain.
Currently companies need an option that suits them to carry out all returns by the client, which seeks reverse logistics is to ensure that all returns by the client are well exploited and do not generate a higher cost to the company , some benefits of having a good reverse logistics are to minimize the environmental impact, improve the corporate image of the company, have better stock control, recover the monetary value of the merchandise returned and the most important thing to reduce costs and the increase from income. Currently, reverse logistics takes more strength in organizations, since they are a business opportunity thanks to the savings of recovered or rejected products.
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- Morales, b. B. (s.F.). Reverse or inverse logistics, contributing to the control of returns and waste in the management of the supply chain. Retrieved 03 of 03 of 2020, from https: // www.Legiscomex.com/Banomedios/files/the%20logistic%20reversa%20o%20inversa%20Basilio%20balli.PDF