Reverse logistics: Learn from your returns

The best practice in reverse logistics is to prevent product from coming back in the first place. Since that’s unlikely, it’s important to understand why goods are returned and learn how to capture the greatest value from the process.

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Reverse + logistics = reverse logistics. Sounds like a basic equation, one that would imply that reverse logistics is simply the supply chain moving backward. But if you ask Shibesh Banerji, principal consultant at Tompkins Associates (800-789-1257, http://www.tompkinsinc.com), he will tell you that the process isn’t so simple. In fact, Banerji and his colleagues prefer the term service supply chain to represent the scope of reverse logistics.

The service supply chain starts the moment a product is sold to a consumer and lasts right up until the end of its useful life, explains Banerji. “There was a time when we would receive a returned item and dump it. Nobody really cared what happened afterward. An OEM or retailer would wash their hands of the item and move forward.”

Not anymore. That practice is changing, and there’s a lot more focus on moving backward. Suppliers and retailers are paying attention to returns whether they like it or not. “Reverse logistics is like a diet—you know it’s good for you, but it’s hard,” says Don Derewecki, assistant vice president at TranSystems (201-368- 0400, http://www.transystems.com).

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About the Author

Lorie King Rogers
Lorie King Rogers, associate editor, joined Modern in 2009 after working as a freelance writer for the Casebook issue and show daily at tradeshows. A graduate of Emerson College, she has also worked as an editor on Stock Car Racing Magazine.

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