Managing Reverse Logistics for a Seamless Journey

The global reverse logistics market was valued at $635.6 billion in 2020 and is projected to reach $958.3 billion in 2028 as it becomes a critical element of customer experience. There can be no doubt that reverse logistics is transforming our ecosystem, with companies large and small seeing the benefits and necessity of delivering this vital part of the supply chain.??

From Return to Reuse

While forward logistics involves moving goods from point A to point B, reverse logistics involves moving goods back from point B for the purpose of return, reuse, refurbishment, disposal, or recycling. Customer expectations, sustainability and legislation are just some of the reasons why companies are implementing reverse logistics strategies – which with careful implementation, are driven by vision, foresight, planning and careful execution.

Reverse logistics significantly impact industries that deal with consumer products – especially those with high return rates or complex supply chains. Retail, electronics and fashion are just three industries that require efficient returns management in order to maintain customer satisfaction while minimising operational costs.

Many other industries require specific reverse logistics strategies. The automotive industry deals with product returns, such as defective parts, warranty claims or end-of-life recycling. Healthcare providers require proper disposal and recycling for expired or recalled products, pharmaceuticals and devices which must comply with safety and regulatory standards. Likewise, the food and beverage industry require efficient reverse logistics to manage product recalls, expired or damaged goods, or unsold products, with proper handling vital in order to minimise waste and ensure product safety.?

The Power of Reverse Logistics in Driving Sustainability

Reverse logistics is now playing a role in more industries than ever before – and some of the key drivers include sustainability and government legislation. For example, some tire, battery and disposable camera manufacturers are encouraging customers to return products after they have been used for recycling. This not only requires a streamlined reverse logistics strategy; it also necessitates effective communication on a business-to-consumer level. Kodak, for example, remanufactures single-use cameras, and over the past decade has recycled more than 310 million cameras in 20 countries. Bosch, meanwhile, has built a successful business selling power hand tools that have been remanufactured. These examples showcase that reverse logistics can support both sustainability and profitability.

Building Loyalty Through Reverse Supply Chain

?It is also important to understand that reverse supply chains can empower customer loyalty. For example, clothing companies that offer a cheap and effective returns policy often achieve high volumes and exceptional customer satisfaction. Knowing it is quick and simple to return a product that doesn’t fit makes a customer more likely to buy it in the first place. Returns and exchanges can be a golden opportunity to build a long-term customer relationship.??

Leveraging Technology for Optimal Returns

?Existing processes help deliver effective reverse logistics – and with the onset of artificial intelligence (AI), those systems will only be enhanced.?AI will help to automate the entire lifecycle of the logistics journey, providing up-to-the-second data to enable better tracking, faster processing and increased efficiency.?For example, thanks to AI, we will be able to pinpoint exactly when a product has been utilised and organise for it to be returned for recycling and, eventually, resale.

In addition to handling product returns, AI will help to deliver sorting and classification, categorising products based on their condition, the reason for return, and the appropriate disposition process, such as refurbishment, recycling or disposal.

Big data, IoT, AI and new technology will help to keep costs to a minimum. Improved inventory management, reduced processing time and optimised transportation networks will all help to drive down costs. There is an expectation across the supply chain to deliver more quickly and more cost-effectively than ever before – and new technology will help us to achieve this.

?A joined-up approach is key

The companies that have been most successful with their reverse supply chains are those that closely coordinate them with their forward supply chains, creating a closed-loop system. For example, they make product design and manufacturing decisions with eventual recycling and reconditioning in mind. Again, Bosch is a good example. It builds sensors into the motors of its power tools, which indicate whether the motor is worth reconditioning. The technology dramatically reduces inspection and disposition costs, enabling the company to make a profit on the remanufactured tools.

To establish a reverse supply chain, companies need to educate customers and establish new points of contact with them, decide which activities to outsource and which to do, and in general figure out how to keep costs to a minimum while discovering innovative ways to recover value. It may also have to meet stringent environmental standards. Simply, they need to think about product acquisition, reverse logistics, inspection and disposition, and reconditioning, followed by distribution and sales.

Business as usual for several sectors

?Reverse logistics has long been embedded within some industries – including major events and sporting tournaments. During the FIFA World Cup Qatar 2022? – when GWC was the Official Logistics Provider – we worked closely with FIFA, the host country, participating teams, commercial affiliates and the media, among others, to carefully oversee the reverse logistics mandate. A huge number of items delivered to Qatar for the tournament needed to be returned to their point of origin, from the FIFA World Cup Winner’s Trophy? to footballs, media equipment, LED screens, medical supplies, kits and much more. This meant reverse logistics was built into the customer experience from day one – in order to provide a positive and seamless journey.

Driving Efficiency with Integrated Reverse Logistics

At GWC, we are proud to offer fully integrated logistics services and have invested heavily to deliver this – offering services including freight forwarding, customs clearance, storage, distribution, venue and reverse logistics. We understand the demand for reverse logistics and have experienced professionals to deliver every type of solution across different industries.

As the reverse logistics mandate continues to grow, we look forward to partnering with companies in Qatar, regionally and across the globe to deliver the most effective solutions to help them grow their businesses and increase customer satisfaction.?