Most of us know that Logistics has the role of planning, implementing and effectively managing the production process from purchasing raw materials, completing products, etc. But if the product is defective, or unsatisfactory, on-demand consumer demand? Then how to handle to bring the product to the place of production? That is the task that reverse logistics must perform. So what is reverse logistics ? What is its role in Logistics activities? Let’s find out with FBI LOGISTICS through the article below!
What is reverse logistics?
Reverse Logistics is also known as recall logistics. It is the process of effectively planning, implementing and controlling the flow of raw materials, semi-finished products and related information from the point of consumption to the point of origin for the purpose of recovering value or handled appropriately.
Reverse logistics is formed based on many different reasons such as: recovery of unsold products for improvement, recovery of reusable products, recovery of products that can be dismantled and reused once. … Reverse logistics activities bring many benefits to the sustainable development of enterprises.
The role of reverse logistics in the import-export business.
Reverse logistics will be a way to reduce costs, increase revenue and improve customer service, thereby helping the company gain a competitive advantage in the market. In the supply chain, people focus on emphasizing the role of Logistics because there will be many quality problems when goods reach consumers.
Reverse logistics plays a very important role for domestic and international import and export activities. Specifically, some important roles of reverse logistics are as follows:
Contributes to improving customer service levels.
A good recall policy will contribute to a competitive advantage for businesses because customers are satisfied with their needs even when they receive defective products.
Cost savings for businesses.
When the goods have to be recovered in the reverse logistics channel, the costs related to transportation, storage, recovery and repair… the recovered goods will increase. It is estimated that the cost for reverse logistics activities on average accounts for about 3% to 15% of the total cost of the enterprise.
Helps to protect the environment.
Through the recovery of defective products, there is proper and standard way of recycling, handling and disposal, so that there is no adverse impact on the environment.
Creates smoothness for the forward logistics process.
In many stages of the forward logistics process, unsatisfactory products appear, at this time, reverse logistics will help bring these products back to the market quickly and in the most timely manner.
What are the steps of reverse logistics?
The reverse logistics process includes 4 steps as follows:
The activity of recalling unsold, defective or unsatisfactory products and then transporting them to the point of recall.
At the point of recall, the recalled goods will be checked in terms of quality, selected and classified according to the criteria. This stage of testing has an important role and affects how the next stage is performed.
At this time, with the recalled goods, businesses have many different ways to handle it: re-repairing defective products, remanufacturing, restoring products, removing to get spare parts, … and an important step. If it is no longer usable, the waste will be treated to minimize the impact on the environment.
Product distribution has been restored.
At this time, the chain of Logistics activities will take place normally with activities of storing, transporting and selling.
The above article is the understanding of FBI LOGISTICS about reverse logistics, hopefully through this article, it will answer your questions about reverse logistics.
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