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Reverse Logistics In Supply Chain Management - Explore the Link Between Them

Nov 30, 2023 | 4 min read

Reverse logistics in the supply chain is a crucial aspect for achieving the highest efficiency. Recently, businesses have likely spent a lot of money and time streamlining their supply chains. Businesses may soon give just as much importance to reverse supply chain management.

Reverse logistics managed by ai powered supply chain management software helps to recovers value and optimizes resource utilization by reselling goods through online market stores or brick-and-mortar stores. It also contributes to sustainable management by recycling or donating goods that cannot compete in the market. 

Now, what is a reverse supply chain?

It’s a series of various activities needed to retrieve a used product from your customers. After the retrieval process, you can refurbish, resell, or dispose of the product. From small businesses to e-commerce giants, the reverse supply chain has become a critical part of business. To have smooth business operations and optimize reverse logistics, efficient inventory planning software is the right fit for every business. 

The Rise of Reverse Logistics in Supply Chain Management  

  • The emergence of e-commerce has played a pivotal role in driving this surge, enabling online shoppers to make purchases without experiencing the product in real time and resulting in higher return rates. Businesses increasingly need better return management strategies to resolve the financial strain from hefty return orders. 
  • Return management requires that organizations address many expensive operational hurdles, including meeting appropriate customer expectations, navigating reverse supply chain difficulties, considering process ownership, and handling data limitations. 
  • Nonetheless, many businesses believe introducing an effective return policy to their company is a worthwhile decision to offset costs. Prioritizing supply chain optimization is very important these days. That is why maximizing return profitability is something that should not go unnoticed because loyal customers tend to have the highest return rates. 

Additional obstacles to handling reverse logistics include:

  • Return collection: End customers choose various channels to return the products, like emails, drop-offs, and pick-ups. 
  • Inspections: once the returnable product is picked up, the relevant teams inspect the product thoroughly and decide whether to resell or dispose of it.
  • Re-manufacturing: if possible, the returned products go through inspections for repairs or reconditioning for a sellable condition.
  • Disposition: if the product is not in a usable condition, then there is no way but to dispose of the product in an eco-friendly way.

Businesses need effective reverse logistics methods to handle returns, repairs, recycling, and disposal. To tackle and monitor this process efficiently, you need to upgrade your business with inventory management software for optimum handling of returnable products. 

There are additional best practices that organizations should employ to reduce returns altogether. 

  • They can provide detailed product reviews and feedback to help customers make informed decisions. Your rate of returns also allows you to plan ahead for the future once you have good historical data on your returned products. An agile inventory forecasting software can utilize that information to accurately predict future sales. 
  • However, these techniques are not sufficient to find the root cause of increasing return rates. One of the best ways to reduce the return rates is to enhance the overall customer experience by delivering high-quality and long-lasting products, accurate product handling descriptions, and competitive pricing. 
  • With the inventory management software, collecting data from your returns can improve product development and marketing campaigns for future sales. Acute analysis of that data enables you to identify trends such as bestselling products, slow-moving products, return rates, seasonal fluctuations, and overall product performance. 

Next Frontier for Reverse Logistics: AI-Enabled Supply Chain Management Software 

Achieving business excellence in this fast-paced world is getting more difficult at every step. In situations like this, advanced technologies like artificial intelligence and machine learning can really help your business leverage that extra edge over your competitors. 

Instead of focusing only on your future sales and profit margins, businesses can apply return supply chain optimization to their business and turn their focus on the reverse supply chain to complete the whole circle. A multi-faceted supply chain management software can enable you to deliver an optimum customer experience and appropriate decision-making processes. 

What Should Businesses Focus on When Crafting a Reverse Supply Chain Process? 

  • Cost-savings: technologies like machine learning algorithms can analyze data such as customer purchase history, product reviews, and buying information to target the right shoppers. As a result of this practice, companies can avoid unwanted returns and reduce extra shipping, stocking, and processing costs.
  • Better customer experience: businesses can proactively reach out to customers who show potential high risk of returning items, offering personalized solutions and addressing any queries before an issue arises. Interacting with your customers sooner and providing an alternative enables brands to improve the overall shopping experience and nurture customer loyalty. 
  • Streamlined reverse logistics: organizations can locate which products customers will most likely return. They can efficiently manage storage, return disposal, and transportation by utilizing inventory planning software. This will minimize costs, reduce waste, and streamline processing. 

Boost your Supply Chain Performance with Avercast

Avercast’s Inventory Management Software provides complete visibility into your inventory movements. From forecasting to accurate reporting on your inventory stock availability, you can access minuscule detailing for better decision-making and enhanced inventory optimization. To learn more about our solutions, schedule a demo or talk to an expert.

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