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Important Factors for Manufacturing Reverse Logistics

Safety measurements such as global lockdown, social distancing, and other measures are introduced to restrict the spread of the COVID-19 pandemic, which has urged consumers are bringing the shopping experience closer to the digital front. Supply chain management is a link between customer and manufacturer.Reverse logistics is a type of supply chain management that returns goods from customers back to the sellers or manufacturers. It is a set of activities related to the reuse of products and materials which involve returning commodities due to damage, seasonal inventory, salvage, recall, and excess inventory to the manufacturer or forwarding it for servicing, refurbishing, and recycling. With the rise of e-commerce on the global platform, digital commerce is constantly transforming and becoming more and more demanding. It is essential to streamline reverse logistics process as it results in huge benefits such as cost reductions, pleasant customers, and less environmental waste.

Enhancing Customer Satisfaction

Customer satisfaction is always a concern in the success of e-commerce. Exchange and return policy bring a positive and significant influence in customer satisfaction for repurchasing. Reverse logistics handles the return of products to sellers or manufacturers due to faulty units or customer dissatisfaction. Process without much fuss results in greater customer satisfaction and maintains the business’ bottom line in the long run. Both e-commerce and brick-and-mortar retailers can improve customer satisfaction with policies that provide a full refund, receipts, and original packaging not required.At the same time manufacturers will organize, retrieve, and determine the outcome of the returned product and ship the new product to customers. Reverse logistics also can be a source of valued information to help the company in identifying the issues and analyzing the data of returned products to enhance customer satisfaction by improving quality during the design phase.

Increasing Asset Utilization

Reverse logistics plays a critical role in an organization as it helps in maximizing asset utilization and minimizing costs or liabilities by classifying and disbursing products or assets that fall under surplus, scrap, excess, obsolete and waste status efficiently and accurately. There is always a misconception that products returned to the manufacturer are junk and ready for disposal. However, manufacturers will identify the failure reason and forward the returned products to repair, refurbish, or remanufacturer the product to like-new condition and recover it as an asset of the company. The manufacturer will congregate various functional components from end-of-life products to reuse in other new manufactured products. An efficient reverse logistics program can turn unwanted products into unforeseen assets. This can be done by restoring the loss of investment in the failed products such as repairing the units or placing the repurposing products in a secondary market for sale.The values of returned products can possibly turn also into a new business opportunity.

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CyrusTey Sui Ting, DLSM
Cyrus Teyhas substantive years of experience in the field of logistics and global supply chain solutions, and specifically in customer service and project management. Cyrusis a member of the Singapore Institute of Purchasing and Materials Management (SIPMM) andhas completed the Diploma in Logistics and Supply Management (DLSM) in December 2021 at SIPMM Institute.

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