Reverse Logistics and Returns Management Key to Business Growth and Profitability

Previously, enterprises focused only the forward flow of goods and services. Known as the forward supply chain it was considered as the means of ensuring profitability and industry leadership. Whereas the reverse supply chain, which is the flow of goods and services from the customer to the manufacturer, did not receive the attention and importance that it truly deserved. Reverse supply chain was considered as a headache that incurred more costs for the enterprises. However in today’s hypercompetitive business environment and volatile economic climate, reverse supply chain is attaining greater significance not only as a means to improve business performance and profitability but also to foster strong relationships with customers. Hence, both reverse logistics and returns management are increasingly identified by enterprises as strategically important areas for increasing profits and reducing waste.  


Though the terms reverse logistics and returns management are used interchangeably, there are fundamental differences between the two. Hence, let’s understand the two terms before delving further into the topic. Returns management is the “management of all logistics operations related to returns of products from their original user to their supplier with the intention of a cost effective recovery, while meeting all legal obligations.” Hence, Returns management is that part of supply chain management that includes returns, reverse logistics, gate keeping and avoidance. While, reverse logistics is the “the process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal.” Here is a look at some of the advantages of reverse logistics and returns management.


  • Reverse logistics helps to keep product offering fresh and new

  • A good returns management is the key to excellent customer service

  • Reverse logistics helps to send unsold merchandise back to the manufacturer in order to be taken apart, sorted, reassembled or recycled and thereby minimize overall costs for an organization

  • Reverse logistics helps to increase product lifecycles, improve speed of production, reduce costs (transportation, administrative, and aftermarket maintenance, repair and replacement)


However, in order to fully realize the benefits of returns management and reverse logistics, enterprises must collaborate with good supply chain solutions providers to deal with the returns process in a logical and efficient manner. Here is a look at some of the services offered by a best of the breed solution provider.


  • Detrash and destruction of returned materials (CDs packaging materials, etc.)

  • Date code based warranty assessment

  • Test diagnostics and repair

  • Software and/or firmware upgrades

  • Refurbishment

  • Retail Fulfillment & Repackaging

  • Warehousing and Distribution

  • Legally compliant disposal (i.e. WEEE and SB2050)

  • Web-based inquiry and reporting


Collaboration with best of the breed solution providers take the headache out of dealing with inbound product, particularly product that has been opened and, in many cases, used. This helps to minimize returned inventory and turn it back into cash fast.


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