flevyblog

Flevy Blog is an online business magazine covering Business Strategies, Business Theories, & Business Stories.
MANAGEMENT & LEADERSHIP STRATEGY, MARKETING, SALES OPERATIONS & SUPPLY CHAIN ORGANIZATION & CHANGE IT/MIS Other

Six Challenges Associated with Reverse Logistics… and How to Overcome Them

Editor's Note: Take a look at our featured best practice, Landed Cost Calculator for USA Imports (Excel workbook). This landed cost calculator is an advanced Microsoft Excel ? spreadsheet that can be used to calculate the total landed cost of importing goods into the USA No need to waste time reinventing the wheel this spreadsheet has evolved from many years of practical use and ongoing development by a [read more]

Also, if you are interested in becoming an expert on Supply Chain Management (SCM), take a look at Flevy's Supply Chain Management (SCM) Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.

* * * *

In basic terms, reverse logistics is about moving products backward through your supply chain.

It can involve returning goods to suppliers, redistributing items to customers or retailers, and recycling or disposing of products.

Reverse logistics can create multiple challenges, so check out the following six challenges and how you can overcome them.

1. Streamlining Return Order Flows

Return order flows can be complex. They require coordination with multiple partners in your supply chain.

And when items are returned for processing, those products need to be inspected, verified, and tested. Products could need to be repaired and repackaged too. Also, decisions will need to be made as to whether it is more cost-effective to recycle or scrap raw materials rather than refurbish defective products.

Therefore, it can be challenging to streamline return order flows because reverse logistics involves so many variables.

To overcome the complexities of return order flows, you should integrate structured processes and systems and use management software to provide you with holistic planning and execution, which should include end-to-end visibility.

2. Ensuring You Have Enough Warehouse Space

Dealing with reverse logistics means you need to have additional space in your warehouse for products that need to be sent back through the supply chain.

But without a high level of organization, you could find you do not have enough space in your warehouse.

You should monitor how many goods, on average, you need to send back to suppliers, to recycling centers, and so on, each month, so you can determine how much additional space you require.

Then, ensure you have a designated area in your warehouse for processing items that need to go through the reverse logistics process.

You may need to readdress the layout of your warehouse and make on-the-ground changes in order to create the extra space you need.

3. Lowering the Cost and Time It Takes to Process Damaged Items

When a big part of your reverse logistics operation involves handling damaged items, it will cost you a lot of time and money. In turn, that can significantly impact your bottom line.

To overcome the problems, ensure you have well-rounded returns policies in place and you utilize an effective inventory management system.

4. Ensuring Customers Are Not Missing Crucial Information for the Products They Purchase

Damaged products are just some of the items that are returned by customers. Other products that are commonly returned are ones that are missing important information, even when those items are fully functional.

For instance, consumers often send back electrical items that are missing technical specifications.

This is one of the easiest challenges in reverse logistics to overcome. You simply need to ensure the products that you sell are always accompanied by the right information.

That begins with selecting the right products to sell.

You can also help your customers to make more informed buying decisions by providing detailed inventory catalogs and product guides online.

5. Avoiding Costs Incurred by Customer Dishonesty

Some of your returned products will be sent back by customers who are dishonest and use tactics to try and get something for nothing.

But you can reduce the amount of customer fraud by implementing a carefully thought out returns policy that has restrictions.

For example, by simply having designated cut-off times for returning items, you could significantly cut down reverse logistics losses.

6. Reducing Carbon Emissions

In this day and age, most companies are finding ways of being eco-friendlier and more sustainable in their operations, but reverse logistics can create more carbon emissions, as items need to be redistributed throughout the supply chain.

To overcome an increased carbon footprint, and thereby reduce carbon emissions, your company should adopt green supply chain solutions such as repurposing returned items, using zero-waste packaging and utilizing environmentally friendly methods for the disposal of the items that need to be discarded.

284-slide PowerPoint presentation
Unlocking Seamless Operations: Introducing the Ultimate Warehousing, Logistics, and Distribution Management Toolkit In the fast-paced world of modern business, effective supply chain management, logistics, and distribution are pivotal to success. Every delay, mismanagement, or inefficiency can [read more]

Want to Achieve Excellence in Supply Chain Management (SCM)?

Gain the knowledge and develop the expertise to become an expert in Supply Chain Management (SCM). Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.

Supply Chain Management (SCM) is the design, planning, execution, control, and monitoring of Supply Chain activities. It also captures the management of the flow of goods and services.

In February of 2020, COVID-19 disrupted—and in many cases halted—global Supply Chains, revealing just how fragile they have become. By April, many countries experienced declines of over 40% in domestic and international trade.

COVID-19 has likewise changed how Supply Chain Executives approach and think about SCM. In the pre-COVID-19 era of globalization, the objective was to be Lean and Cost-effective. In the post-COVID-19 world, companies must now focus on making their Supply Chains Resilient, Agile, and Smart. Additional trends include Digitization, Sustainability, and Manufacturing Reshoring.

Learn about our Supply Chain Management (SCM) Best Practice Frameworks here.

Readers of This Article Are Interested in These Resources


Excel workbook
The freight management worksheet is a powerful tool that allows you to have complete control over your logistics department. With its easy-to-use dashboard, you can quickly check important information such as total freight cost, number of trips, drivers and vehicles, as well as average time, [read more]


 
904-slide PowerPoint presentation
 
 
Excel workbook

About Shane Avron

Shane Avron is a freelance writer, specializing in business, general management, enterprise software, and digital technologies. In addition to Flevy, Shane's articles have appeared in Huffington Post, Forbes Magazine, among other business journals.


Complimentary Business Training Guides


Many companies develop robust strategies, but struggle with operationalizing their strategies into implementable steps. This presentation from flevy introduces 12 powerful business frameworks spanning both Strategy Development and Strategy Execution. [Learn more]

  This 48-page whitepaper, authored by consultancy Envisioning, provides the frameworks, tools, and insights needed to manage serious Change—under the backdrop of the business lifecycle. These lifecycle stages are each marked by distinct attributes, challenges, and behaviors. [Learn more]

We've developed a very comprehensive collection of Strategy & Transformation PowerPoint templates for you to use in your own business presentations, spanning topics from Growth Strategy to Brand Development to Innovation to Customer Experience to Strategic Management. [Learn more]

  We have compiled a collection of 10 Lean Six Sigma templates (Excel) and Operational Excellence guides (PowerPoint) by a multitude of LSS experts. These tools cover topics including 8 Disciplines (8D), 5 Why's, 7 Wastes, Value Stream Mapping (VSM), and DMAIC. [Learn more]
Recent Articles by Corporate Function

  

  

  

  

  

The Flevy Business Blog (https://flevy.com/blog) is a leading source of information on business strategies, business theories, and business stories. Most of our articles are authored by management consultants and industry executives with over 20 years of experience.

Flevy (https://flevy.com) is the marketplace for business best practices, such as management frameworks, presentation templates, and financial models. Our best practice documents are of the same caliber as those produced by top-tier consulting firms (like McKinsey, Bain, Accenture, BCG, and Deloitte) and used by Fortune 100 organizations. Learn more about Flevy here.
  


OUR CORE OFFERINGS
Flevy Marketplace: Top 100
· Strategy & Transformation
· Digital Transformation
· Operational Excellence
· Organization & Change
· Financial Models
· Consulting Frameworks
· PowerPoint Templates
FlevyPro (Subscription Service)
KPI Library
Streams (Functional Bundles)
Flevy Executive Learning (FEL)
PowerPoint Services

FREE Resources

About Flevy
Management Topics
Marcus (AI-Powered Consultant)
Partner Program
LinkedIn Influencer Marketing
FAQ / Terms / Privacy / Blog
Contact Us: support@flevy.com



CONNECT WITH US!
       
TOP 100 TRENDING TOPICS
Acquisition Strategy
Agile
Analytics
Artificial Intelligence
Balanced Scorecard
Best Practices
Big Data
Breakout Strategy
Business Continuity Planning
Business Plan Financial Model
Business Transformation
CMMI
COBIT
Change Management
Cloud
Communications Strategy
Company Financial Model
Competitive Advantage
Competitive Analysis
Consulting Frameworks
Continuous Improvement
Core Competencies
Corporate Culture
Cost Reduction Assessment
Customer Experience

BROWSE BY FUNCTION
Strategy, Transformation, & Innovation
Digital Transformation
Operational Excellence and LSS
Organization, Change, & HR
Management Consulting

Customer Journey
Customer Service
Cyber Security
Data Privacy
Decision Making
Digital Marketing Strategy
Digital Transformation
Digital Transformation Strategy
Due Diligence
ESG
Employee Engagement
Employee Training
Enterprise Architecture
Growth Strategy
HR Strategy
Hiring
Hoshin Kanri
ISO 27001
ITIL
Information Technology
Innovation Management
Integrated Financial Model
Kaizen
Kanban
Key Performance Indicators

ADDITIONAL RESOURCES
Business Strategy Frameworks
Case Studies
Consulting Training Guides
COVID-19 Trend Data
Digital Transformation
Financial Advising Services (FAS)

Knowledge Management
Leadership
Lean
Lean Manufacturing
Logistics
M&A (Mergers & Acquisitions)
Manufacturing
Market Research
Marketing Plan Development
Maturity Model
McKinsey PowerPoint
McKinsey Templates
Operational Excellence
Organizational Change
Organizational Design
Performance Management
Post-merger Integration
Pricing Strategy
Process Improvement
Process Maps
Procurement Strategy
Product Launch Strategy
Product Strategy
Project Management
Quality Management


Free Resources
KPI Library
Lean Management
Lean Six Sigma Training Guides
Marcus Insights
Operational Excellence

Real Estate
Remote Work
Restructuring
Risk Management
Robotic Process Automation
SWOT
SaaS
Sales
Scrum
Service Design
Six Sigma Project
Social Media Strategy
Strategic Planning
Strategic Thinking
Strategy Development
Supply Chain Analysis
Sustainability
Target Operating Model
Team Management
Total Productive Maintenance
Value Chain Analysis
Value Creation
Value Stream Mapping
Visual Workplace
Workplace Safety


Product Strategy
Small Business Owner
Startup Resources
Strategic Planning
Strategic Planning Process
Value Innovation Strategy


© 2012-2024 Copyright. Flevy LLC. All Rights Reserved.