Reverse Logistics, what is it?

What is reverse logistics? Logistics takes into account all processes related to the product, such as return, recycling, reuse and disposal. The standard logistics function of a company can be complemented with reverse logistics to fully manage all the strategic form between materials and information that can be offered in this service.

Therefore, what can we consider as reverse logistics? Reverse logistics is the “process of planning, implementing and controlling the flow of raw materials, process inventory and finished goods from a point of use, manufacture or distribution to a point of recovery or proper disposal.”

In other words, we can define reverse logistics as the process of transporting goods from one destination to another for the purpose of obtaining value that would otherwise be unavailable.

Reverse logistics in the supply chain comprises all activities related to the movement of materials from a point of origin or collection to the consumer. Treats raw materials, finished products, packaging, containers and other types of waste. This type of process reuses or eliminates at convenience in order to create a process that generates value and utility.

Producer-consumer logistics diagram with orange arrows

Fundamental objectives of reverse logistics

  • Returns: In this section, we discuss a company’s return policy. This is where reverse logistics comes into play, since aspects such as speed and quality of service must be taken into account.
  • Care for the environment: The deterioration of the planet is making the population aware of the growing need for the reuse of materials so that the economy becomes more sustainable.
  • Economy: Thanks to the reuse of materials, there is a new way of obtaining productivity, since raw materials are recycled and incorporated into new production processes.
  • Improved relationship between customers and suppliers

Environment and reverse logistics

Nowadays, society is becoming more and more aware of the need to take care of the environment, therefore, one of the aspects to be taken into account is the recycling and reuse of materials or waste. With this in mind, we can reduce pollution and preserve natural resources.

Companies often promote environmental stewardship in the following ways:

  • Responsible behavior positively influences a company’s protection actions.
  • Customers are increasingly demanding environmentally responsible products.
  • Public administrations promote respect for the environment by applying preventive measures at local, state and national level.

Possible limits to reverse logistics

There are strategic limits that can hinder reverse logistics, such as, for example, product design based on recycling and packaging management.

Design for recycling

Product design is focused on cost-effectiveness and environmental friendliness.

Design guidelines:

  1. Simplify materials: If you reduce the variety of materials, i.e., if you only focus on a few materials, you simplify the recycling process. (For example: plastic, glass…).
  2. Labeling materials: The raw material of the product must be identified, as this is essential for the correct recycling route. Standardized labeling is available.
  3. Ease of disassembly: By applying this type of development to the product, you provide the company with a breakthrough when decomposing a product, which means savings in costs and management time.

Reverse packaging logistics

The packaging design must also be optimized for reverse logistics.

Characteristics of containers and packaging

  1. Labeling: It favors the knowledge of the raw material contained in the container.
  2. Recycled: It must also appear on the label above. It should indicate if the product is susceptible to recycling.
  3. Reuse: There are containers that can be reused, for example, reusable plastic bags versus fabric bags that are not reusable.
  4. Return: In this case, they are containers that can be returned to the producer, i.e. they are reused without any transformation process. In the past, glass containers were returnable, but today they are recycled.

The 3Rs: Reuse, recycle and reduce

Any trade is a waste generator, but due to the consumption boom imposed by capitalism, today’s societies generate even more waste than before.

Therefore, the three Rs rule is used, which considers three elements to reduce the impact of waste on the environment.

  • Reuse: Consider using elements such as containers and packaging on more than one occasion to take advantage of their usability and life span of this product.
  • Recycling: There is a tendency to use products and/or materials that can be reused and incorporated into future production processes.
  • Reduction: Focuses its waste (loss) of materials on those whose reuse and recycling is not possible. Their reduction implies environmental and economic cost reductions.

Recycling symbol with heart shape in green color

Why choose reverse logistics?

As we have already mentioned, the rise of reverse logistics has grown due to the importance of environmental concerns. Consumers are increasingly aware of the need for more personalized products and services.

Advantages

  • Improved customer satisfaction
  • Reduces environmental impact
  • Committed brand image
  • Savings in raw material costs
  • Customer loyalty
  • More competitive after-sales service
  • Cost reduction
  • Generates a new source of income

The goal of any logistics strategy is to deliver an optimal level of customer satisfaction and control end-to-end costs in the supply chain.

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