I have Exam 2morrow, Most likely Q: What are the advantages & disadvantages of Reverse Logistics??? Thanks all

Question

I have Exam 2morrow, Most likely Q: What are the advantages & disadvantages of Reverse Logistics??? Thanks all

Answer 1

Reverse logistics stands for all operations related to the reuse of products and materials. It is "the process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal. More precisely, reverse logistics is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. Remanufacturing and refurbishing activities also may be included in the definition of reverse logistics."[1] The reverse logistics process includes the management and the sale of surplus as well as returned equipment and machines from the hardware leasing business. Normally, logistics deal with events that bring the product towards the customer. In the case of reverse, the resource goes at least one step back in the supply chain. For instance, a good moves from the customer to the distributor or to the manufacturer.[2]

Business Implications

In today's marketplace, many retailers treat merchandise returns as individual, disjointed transactions. "The challenge for retailers and vendors is to process returns at a proficiency level that allows quick, efficient and cost-effective collection and return of merchandise. Customer requirements facilitate demand for a high standard of service that includes accuracy and timeliness. It’s the logistic company's responsibility to shorten the link from return origination to the time of resell."[3] By following returns management best practices, retailers can achieve a returns process that addresses both the operational and customer retention issues associated with merchandise returns.[4] Reverse logistics is more than just returns management, it is all activities related to returns avoidance, gatekeeping, disposal and all other after-market suply chain issues. [5] Returns management – increasingly being recognized as affecting competitive positioning – provides an important link between marketing and logistics. The broad nature of its cross-functional impact suggests that firms would benefit by improving internal integration efforts. In particular, a firm's ability to react to and plan for the influence of external factors on the returns management process is improved by such internal integration.[6] Third-party logistics providers see that up to 7% of an enterprise's gross sales are captured by return costs. Almost all reverse logistics contracts are customized to fit the size and type of company contracting. The 3PL's themselves realize 12% to 15% profits on this business.[7]