Reverse Logistics Is Arguably The Current Buzz Word Of The Logistics Industry. As The Battle To Remain Profitable In A Challenging Economic Climate Rages On, Supply Chain Experts Are Looking At Reverse Logistics Strategies To Reduce Waste, Improve Customer Satisfaction And Reap The Financial Rewards
What Is It?
Reverse logistics can be defined as “the process of planning, implementing and controlling backward flows of raw materials, in-process inventory, packaging and finished goods, from a manufacturing, distribution or use point, to a point of recovery or point of proper disposal” (source: Reverse Logistics Executive Council). Remanufacturing and refurbishing activities can also be included in this field, as well as managing sales of surplus/ returned equipment and machines from the hardware leasing business. With typical logistics practices bringing the product towards the customer, the nature of reverse logistics is aptly named as the product is moved back through the supply chain to gain maximum value.
Why Are People Doing It?
Many companies focus on reverse logistics to enhance customer experience, protecting their brand and retaining customer loyalty. It is becoming increasingly important to keep customers satisfied with products and services not only before and during, but also after the initial delivery. There is relevance also within the projects sector however whereby industrial suppliers provide their goods to a customer, ship the goods back after completion of the project, and then re-use them for another project for another customer. It is worth noting here that this also motivates more cross trade in the project sector.
The increasing demand for businesses to consider the environmental impact of their operations has been another motivation for reverse logistics. As consumers, we are becoming more concerned with corporate energy consumption, emissions and supply chain carbon footprint. Rising public interest in ‘corporate responsibility’ saw M&S implement Plan A in 2007 pledging to ‘help protect the planet by sourcing responsibly, reducing waste and helping communities’.
Many companies overlook reverse logistics due to the perceived cost of managing the process, however, some statistics suggest that reverse logistics costs can be less than 4% of the total supply chain. Refurbishing, repackaging and reselling parts are often untapped revenue opportunities, avoiding excess inventory carrying costs and helping companies to reduce costs.
The environmental benefits of recycling or refurbishing products are obvious. For many supply chain managers, however, the beauty of reverse logistics is that you can not only gain maximum value and increased revenue from every product, but also add some ‘sustainable’ and ‘environmental’ kudos to your corporate image. Win-win?
How Does Tuscor Lloyds Do It?
For Tuscor Lloyds reverse logistics has been an increasing part of the service offered by our projects team. Many of our clients are utilising reverse logistics processes in their supply chain, focusing on the benefits of aftermarket care and complete life cycle support.
Specifically for our oil and gas clients, we offer quotations for delivering the same piece of equipment to different destinations around the globe. We have also been involved in numerous return shipments, at times even transporting cargo to the client and bringing back materials/equipment in the same delivery. This requires Tuscor Lloyds specialist import/ export knowledge in managing hidden costs in the reverse supply chain.
Do you need to discuss reverse logistics solutions for your business? Contact our team today to get your cargo moving:
Telephone: +44 (0) 161 868 6000
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