We all know that a smooth and streamlined logistics schedule, in which a good reaches it’s customer, is extremely important for supply chains. However, there is a reality that one needs to be ready for and have a game plan for, and these circumstances are when products or goods are returned or recalled back to the supply chain. It could also apply for products that are no longer needed in the market and are sent back to the supplier. The question of what will happen to the products is separate, but an important part of this problem is the reverse logistics or recalling carrier plan of these goods. Getting custom clearance for return products can be a problem too, as the border controls may argue about the reason for it’s return.
There are a number of problems faced if you have a returns policy, which includes
- Immense Backlog: It often becomes difficult to process orders to send out when you are getting return products. All the extra work and hours are required to process and feed in the product codes that have been recalled.
- Processing Costs: When goods re returned, it is possible they might need re-packaging re-processing which also raises the cost and often the need arises to have a separate department dealing only with returns. It also requires technical know how in case of recycling technological equipment or heavy automotive machinery.
- Limited Warehouse Space: Small and medium sized businesses often have limited storage space and if products are returned often, it becomes difficult to store them properly.
- Custom Clearance: Goods like equipment or heavy machinery requires a stringent clearance process by the customs at various city or country borders
However, all is not lost and in fact brand names with return policies have a growing customer base. In this time and age, retail customers who shop online prefer shops that have liberal returns policy. Supply chains face the issue of reverse logistics a lot, as equipment, machinery, hardware can get old in this age of technology and people will want to rid themselves of it. Businesses or supply chains with return policy have better sales and profit returns as well. For supply chains, this concept applies to the removal of such equipment or hardware to make space for new ones. It also means that the reverse supply chain process includes the upgrading or recycling of computer parts or any such machinery.
Here are a few suggestions and solutions for supply chains to deal with reverse logistics:
A Second ROI
Yes, you read that right! It is quite possible to get a repeat return on investment from equipment that you purchased some time ago. Obviously, when a certain technology or hardware or machinery was purchased it was to increase profitability and increase efficiency of work. Once that piece of machinery has given you the maximum profits it could, and it is time to discard it, have a good look at it. There may be some components that are still working, or some copper/metal that can be sold. In other words, you can easily either recycle, sell it as second hand or take out the functioning components and sell those.
Green Movements Win Hearts!
With the ever increasing pollution and plastic that is choking up the world, it is time we gave back and a reverse supply chain strategy should include environmentally friendly tactics to improve profits and customer base. People all over the world, especially your customers, will greatly appreciate you joining the green movement to keep the Earth as clean as possible. Recycling is not only good for our environment but it is also great to improve the perception of the public towards your brand or company’s name. In the end, it will result in a loyal client base and a growing affiliation with more clients who would want to work with a company that is environmentally responsible.
Reverse Logistics Movement Tracking
Whenever heavy machinery or equipment is being returned, it is essential to have a good reverse logistics strategy to ensure that the goods are returned in good condition. That is why it is crucial that you should have a freight forwarding company that agrees to ship the returns products or goods too. Look for a company that provides it’s customers with excellent custom clearance services so that the products do not end up costing way more on the way back.
Working on a reverse logistics strategy is important to any business, in particular those that deal in heavy automobiles, construction equipment etc. Hope these solutions help in mapping out a good reverse supply chain plan with the help of your break bulk cargo shipping provider so that you can maximize on your profits.