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The Importance of Reverse Logistics in Your Supply Chain

What are reverse logistics? How do they affect your supply chain? What can you do to leverage reverse logistics and improve your bottom line?

You can read this article to learn more about the flow of reverse logistics in your supply chain. There is four key supply chain analytics that can help you understand the flow of returned products entering your supply chain. They are as follows:

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 1. Volume: Are the same items being returned over and over? Is this happening in large volumes? Answer yes to either of these questions and you’ve probably got a larger problem than just a few faulty units. You may need to consider a recall or an overhaul of your production process.

2. Percent of Sales. What percentage of your sales are lost to product returns? And how many of these products can be reincorporated into your supply chain via reverse logistics? 

3. Condition the Product is Returned In. Can you determine any patterns of failure among the returned product? This is where quality assurance (QA) and error reproduction are important. You want to figure out what went wrong so you can adapt and correct the problem before it happens again.

4. Financial Value. Without monitoring and managing your reverse logistics, your company could be losing millions of dollars in potential value.