Understanding how reverse logistics can impact your supply chain and what you can do to control it and improve the outcome is important. Surprisingly, reverse logistics and the return of goods can produce profit for your business. Developing a strategy and understanding how to evaluate your company’s reverse logistics structure can benefit your company in every way possible.
A company can take advantage of reduced costs by implementing a successful reverse logistics flow and a strategy for the returned items and solve the issue.
Most supply chains monitor the success of the goods only during the product’s transportation and timely distribution. To a degree, this is an accurate estimation of a customer’s satisfaction and profitability. However, that’s not always the case. Often, once the product has been delivered, it’s forgotten, and possible issues after delivery aren’t considered. It’s possible for the product shipped to be inaccurate from its original description or to have an incomplete order, as well as the customer re-evaluating their purchase. There is a high chance that the product will be returned on all of these occasions.
Once the product has returned to your establishment, overseeing the restocking of the product into the supply chain can be the solution to avoiding making the same error again and reclaiming as many of the products as possible. To detect the flow of reverse logistics, a few core supply chain analytics can help you recognize the flow of these returned products entering your supply chain.
Volume—Recognizing if the same products are being returned and in what magnitude. If the issue persists, you may need to recall or re-evaluate your operation’s procedures.
Percent of sales—Acknowledge the percentage of sales lost during these returns and the number of products that can be reconsolidated in the supply chain by reverse logistics. How can you reduce these proceeds losses and earn a profit instead?
The condition of the product—Recognize the patterns that cause the deficiency and mistake of the product being returned so you can adjust and revise the issue and prevent it from recurring.
Financial value—By not managing your reverse logistics, you are putting your company in a vulnerable position to lose millions of dollars. For instance, take failed electronics being returned. According to Recovering Lost Profits by Improving Reverse Logistics, “electronics sold in secondary markets represent an estimated $15 billion (sold) in the United States.” This shows how electronic companies overturn unsuccessful products into gains by applying reverse logistics.
To reap the benefits of reverse logistics, companies must proceed quickly in refunding and replacing goods. They must also be aware of how to correct bad experiences and master how to keep customers satisfied and involved with their business. To minimize losses and retrieve the investment, they must repair and refurbish the item in a second-hand market.
HOBI is an ITAD provider focused on reverse logistics and asset redeployment. HOBI prioritizes the safety of its clients’ assets and inventories and ensures the products are correctly processed at every step. HOBI has more than 30 years of experience in the industry and provides services, including warehousing, transportation management, forward deployment, remarketing, refurbishing, repair, and recycling.
For more information about our ITAD services, call 817-814-2620 or contact HOBI at sales@hobi.com.