Reverse Logistics

The term reverse logistics is all pertinent related to the reuse of products and material. It is a procedure of moving goods from point of consumption to the point of typical origin. It is a kind of returns management. A company has to refurbish their mechanism and process tactics to fight against rivalry in the market.

Typically, logistics (forward logistics) behave towards those occasions where products are manufactured and sold it to the end customers. In the case of reverse logistics, the product does not follow the supply chain. Instead of it follow a reverse supply chain.

Return of unsold goods

The major reason, why products are returned is that; the products become defective in their nature and the ultimate customer is not satisfied with the products, because it does not contain what they actually expect. When overstocking of products in retail outlet leads to huge inventory carrying cost. In that sense such items are returned to the manufacturing firm. Seasonal and off-seasonal products become returned when they does not sold it.

Various cost associated with reverse logistics

1. Cost of return

   The cost incurred on return of products. Maintain proper manifest for return policies and related services etc. are some examples included in the cost of returned products.

2. Cost of transportation

   The cost of bring back an unsold commodity from a retail store. Time taken to get product from the destination to the point of its origin. Entire expenses involved in moving products from different place.

3. Cost of repair

   When a product returned it have certain damages or to need reallocating any spare parts, maintenance etc. The whole repair and maintenance cost incurred on such returned products are called cost of repair.

4. Cost of service

   The above mentioned; transportation, repair and maintenance etc. are included in service. Special training to staff and if there is a need for outsourcing or hiring a staff for do a particular job or task.

5. Cost of re-selling

   Updating existing procedure need utmost care and attention. Remanufacturing the returned products need special encouragement. The cost involved in reusing or rebuilding the products like; packing cost, changing spare parts cost etc.

6. Cost of disposal

   It consists of cost that are associated with disposal or demolish of returned product's. Product demolish only when the life span of a product comes into expired. The life expectancy of a product become worsen it will lead to disposal of the product.

7. Cost of Labour

   Sum total of all wages paid to employees by the company, when they stacking goods into the carrier, packaging and managing the carrier as a whole.

Reverse logistics magnifies safe reuse and disposal of returned goods. It encourage customer delights and adherence towards goods and services.

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Prepared by

Arjun A R

Faculty
Kairos Institute, Thodupuzha