Executive Briefings

The Realities of Reverse Logistics

Irv Grossman, vice president of the Supply Chain Operations Practice of Chainalytics, offers guidance on how companies can stop thinking of reverse logistics as an inevitable burden, and begin approaching it strategically.

Many companies continue to view reverse logistics as an "inevitability," says Grossman. What they should be doing is taking a strategic approach to this critical link in the supply chain. He advises businesses to identify where the process went wrong - was it the product itself, the size, the color or possibly a bad customer experience? Such an approach offers "an opportunity to mine the data, learn and provide a better customer experience," he says.

New technology and developments in electronic commerce can help. They generate a substantial amount of information that can be used to improve the fulfillment experience. A full understanding of the social media phenomenon can be especially helpful in divining customer trends and preferences.

Companies can reduce the volume of returns somewhat by engaging in such techniques as including a toll-free number in the original packaging, to provide customer help up front. They can also tighten policies in order to avoid fraud. (Or, for that matter, loosen them to win more customers.) Again, the key is accessing the data and making optimal use of it. In some cases the retailer will relay data to the original design manufacturer, to resolve potential issues far up from the chain. That approach can be especially valuable at a time when product lifecycles are shrinking drastically. "You have to see the information early, and get it at the point of contact," Grossman says.

The drive for sustainability and green supply chains is becoming an increasingly important aspect of reverse logistics. Grossman cites a United Nations statistic that some 50 million tons of electronic waste are created every year. According to the Environmental Protection Agency, just 8 percent of high-tech devices are making their way back through the sustainability cycle. Grossman says companies must work harder to improve that record, in part through the "de-manufacturing" of items and the extraction of rare earth materials, which can be otherwise difficult or expensive to obtain.

To view video in its entirety, click here


Keywords: supply chain, supply chain management, reverse logistics, global logistics, logistics management, transportation management, logistics services, retail supply chain, supply chain planning

Many companies continue to view reverse logistics as an "inevitability," says Grossman. What they should be doing is taking a strategic approach to this critical link in the supply chain. He advises businesses to identify where the process went wrong - was it the product itself, the size, the color or possibly a bad customer experience? Such an approach offers "an opportunity to mine the data, learn and provide a better customer experience," he says.

New technology and developments in electronic commerce can help. They generate a substantial amount of information that can be used to improve the fulfillment experience. A full understanding of the social media phenomenon can be especially helpful in divining customer trends and preferences.

Companies can reduce the volume of returns somewhat by engaging in such techniques as including a toll-free number in the original packaging, to provide customer help up front. They can also tighten policies in order to avoid fraud. (Or, for that matter, loosen them to win more customers.) Again, the key is accessing the data and making optimal use of it. In some cases the retailer will relay data to the original design manufacturer, to resolve potential issues far up from the chain. That approach can be especially valuable at a time when product lifecycles are shrinking drastically. "You have to see the information early, and get it at the point of contact," Grossman says.

The drive for sustainability and green supply chains is becoming an increasingly important aspect of reverse logistics. Grossman cites a United Nations statistic that some 50 million tons of electronic waste are created every year. According to the Environmental Protection Agency, just 8 percent of high-tech devices are making their way back through the sustainability cycle. Grossman says companies must work harder to improve that record, in part through the "de-manufacturing" of items and the extraction of rare earth materials, which can be otherwise difficult or expensive to obtain.

To view video in its entirety, click here


Keywords: supply chain, supply chain management, reverse logistics, global logistics, logistics management, transportation management, logistics services, retail supply chain, supply chain planning