Reverse logistics is an inevitable and essential part of running an e-commerce warehouse storage operation. It also represents an opportunity to improve customer satisfaction, boost brand appeal and be more sustainable.
What is reverse logistics?
If logistics is about the flow of goods through the supply chain from manufacturer to end consumer – reverse logistics is the opposite of that.
Reverse logistics involves products moving backwards through the supply chain from customer to distributor, or from distributor to manufacturer. It is the process by which previously sold goods are returned to warehouse stock inventory or properly and responsibly disposed of.
There are many reasons why this may be required. Products may be recalled as defective, be surplus to distributors’ requirements, or have been returned by customers for some reason.
Reverse logistics explained.
Also known as aftermarket logistics or retrogistics, reverse logistics may involve a simple, single step back in the supply chain, or more complex processing aimed at recapturing value and ending the product’s lifecycle, including servicing, refurbishment, and recycling.
Reverse logistics is a complex process because it encompasses a wide range of areas, including.
- Warehouse Stock Returns
- Warranty management
- Warehouse storage management
- Sustainable Packaging
- Unsold goods
- Rentals / leasing
- Repairs and maintenance
Reverse logistics challenges
This complexity inevitably leads to cost and efficiency challenges for warehouse storage and distribution businesses.
Take customer stock returns for example: all customers see is how easy or otherwise it is to request a product return, how quickly a replacement is sent if required, and how long it takes for a refund to hit their bank account. They don’t see all the work involved in processing that return, or all the people involved in managing the warehouse stock to facilitate that return
Any return must first be inspected and assessed, before a decision is made on whether to return that item to warehouse inventory or forward it on for repair, remanufacturing, recycling, or disposal.
Effective warehouse returns management requires warehouse optimization for efficiency, where people and technology work in harmony and where the physical environment storage bins are geared towards the specific demands of retail returns management.
Why is reverse logistics important?
The best reverse logistics operations reduce business costs, recover lost revenue, improve customer satisfaction and improve brand perception.
They can also contribute towards a more circular economy, which has wide-ranging benefits for people and planet.
As e-commerce continues to grow, a straightforward and efficient customer returns process can be a competitive advantage in a crowded marketplace. It can also cost businesses less in the long run, especially in the case of fast fashion where every minute an item of clothing spends off the shelf may mean a lost sale.
Similarly, handling product recalls in the warehouse quickly and efficiently helps to keep them from harming your brand’s overall image.
Meanwhile, refurbishment, remanufacturing and recycling processes may save energy and resources as well as help to reduce the environmental impact of a business’s products at end of life – all of which are important in the drive for greater sustainability, which in turn helps to improve a business’s brand perception.
So, it is perhaps not surprising that many big brands are using reverse logistics to their advantage. Examples include fashion retailer H&M, which allows its customers to donate gently used clothing of any brand in store which is then remanufactured into its own, 100% recycled apparel line.
Technology giant Apple also encourages consumers to return their old Apple devices in return for a discount on its newest models. Old devices are then sent to its manufacturing facilities, where components are reused to make new devices.
Successful reverse logistics
Success in reverse logistics is ultimately about efficiency.
For this reason, retailers are increasingly establishing dedicated warehouse storage hubs to process returns and product recalls, or entrusting them to a 3PL warehouse specializing in handling reverse logistics.
Having a dedicated warehouse space for product returns and rework not only reduces shipping costs but allows a business to drive efficiencies that result in a smoother service and reduced lead times.
PALLITE™ : Warehouse industrial shelving for reverse logistics
The best warehouses for handling reverse logistics are those that are optimized for pick efficiency and, at PALLITE™ , warehouse efficiency is our speciality.
Our innovative warehouse storage solutions allow teams to work faster and smarter.
Our PIX™ range of warehouse shelving units is made from the same durable paper honeycomb cardboard as all our other products, providing strength in a form that is inherently usable and yet sustainable, being 100% recyclable at end of life.
The slot-together design of PIX™ storage bins mean they can be delivered flat-packed and constructed in minutes, without the need for any tools or fixings. They can also be dismantled again quickly and stored away when not in us, as well as moved easily by forklift even when fully loaded.
These features are a particular bonus for warehouse operations handling returns all year round, as it means that they can quickly and easily flex their warehouse space around peaks, and troughs in stock fluctuations.
Our PIX™ warehouse shelving can also be designed to fit specific spaces in a warehouse, while moveable dividers and the option of additional pick bin inserts enables the racking to flex around different sized products. Dividers can be removed for increased pick bin capacity, while multipliers can double or even triple the number of pick faces available per storage unit.
In this way, pick locations can be consolidated into a smaller storage footprint, with SKUs clearly divided and individual products stored more securely.
Consolidating pick faces in this way frees up previously underutilized warehouse floor space that may be dedicated to ecommerce returns and rework. It also reduces picking walk sequences and pick times in order fulfillment.