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Home » Defining Differences Between Reverse and Forward Logistics Operations

Defining Differences Between Reverse and Forward Logistics Operations

April 2, 2013
Industry Week

Take an easy example - a registration system for a flexographic press. Let's say a technician is dispatched to replace a system at a customer site. A brand new system might have a value of $5,000. In forward logistics, cost is a simple number. But what happens when the engineer in the field swaps out the good assembly for the defective one? Now, he is supposed to send the defective one back so that it can be repaired. But the defective system doesn't have full value. It is not worth $5,000, because it doesn't work. But it is not worth $0 either because the company might be able to change one little sub-component and make it a useful unit for the repair pool.

Software that handles reverse logistics has to take into account the useable status of the item and track the unit on a basis that is valued at less than full cost but more than zero cost. That is just one small example of some of the interesting characteristics of a reverse logistics operation that really isn't the same as forward logistics.

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Keywords: supply chain management, elements of reverse logistics, disposal of returned items, supply chain returns, reverse supply chain, logistics services, logistics & supply chain

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    Logistics Logistics Outsourcing Reverse Logistics Technology Supply Chain Finance & Revenue Management Business Strategy Alignment Global Supply Chain Management Pharmaceutical/Biotech
    KEYWORDS Business Strategy Alignment disposal of returned items elements of reverse logistics Global Supply Chain Management Logistics logistics & supply chain Logistics Outsourcing logistics services Pharmaceutical/Biotech Reverse Logistics reverse supply chain SC Finance & Revenue Management Supply Chain Analysis & Consulting Supply Chain Management supply chain returns Technology
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