A majority of logistic services in India deal with the process of delivering the product to the customer. But reverse logistics involves moving the product from the customer to the distributor or manufacturer. The reverse logistics process usually involves returns, recalls, repairs, recycling and disposal. According to Allied Market Research’s Reverse Logistics Market report from 2018-2025, the reverse logistics sector is expected to reach $603.90 billion by 2025.
In an ideal scenario, the supply chain should end when the final product has reached the customer. But this is not what actually occurs. A customer might have many reasons to return products and it is the responsibility of the company to organize the logistics to pick up the product from the customer and deliver it back to the distributor or manufacturer. With an increase in e-commerce sales, companies have started realizing the importance of well-organized reverse logistics as it can help increase the company performance and customer relations.
Safexpress, a market leader in supply chain and logistics, has expertise in effectively managing the return of goods with various processes and documentation in place to make it easy and timely for all parties involved. The REVLOG system provided by Safexpress is a platform designed to automate the process of return request by dealers or partners. This platform enables to provide all parties involved a transparent view to keep track of the entire reverse logistics process.
Benefits of good reverse logistics
Good reverse logistics impact both the customer experience and the bottom line of the company. By establishing good reverse logistics, you not only invite repeat orders, but also improve customer satisfaction and their loyalty to the brand. Prior to the growth of e-commerce, reverse logistics in India was largely unorganized. With major e-commerce players like Amazon and Flipkart preferring an organized provider, this segment has seen a bunch of new companies in India focusing on reverse logistics.
By monitoring the flow of reverse logistics, companies can understand the volume of products being returned, percentage of sales getting affected due to the returned products, reasons behind the products getting returned, and finally enable you to determine whether any financial value of the product can be regained by selling its various components or as scrap material. An effective reverse logistics system can reduce operational costs, provide faster service in case of refunds or replacement of goods, and customer retention.
Challenges faced in reverse logistics
Reverse logistics is an area which presents great operational challenges due to the large volume and processing costs. Reverse logistics in India need to be more efficient and cost-saving in nature to enhance supply chain optimization. Reverse logistics can be complex and time-consuming to implement, and for many companies, lack of competency or resources may act as a hindrance. Many such companies have outsourced their reverse logistic services, which help them to improve quality, cost savings, inventory management and customer experience.
Although the reverse logistics industry is growing, companies have to deal with unpredictable returns and recalls of products from different locations, thus making this kind of logistics difficult. Reports suggest that a reverse logistics supply chain can require up to 20 percent more space than an outbound supply chain. Companies have started utilizing artificial intelligence to best determine return rates and route optimizations to optimize reverse logistics.
With the help of these new and emerging technologies, reverse logistics can be made more efficient and economical. A reverse logistics process, after proper implementation, can lead to a 25 percent reduction in the returns processing costs, 10 per cent increase in productivity and 2 to 5 percent increase in net profits, along with significant growth in customer satisfaction and retention.
In Conclusion
Logistic services in India need to involve a synchronized supply chain, which will include forward traditional logistics, inbound logistics and reverse logistics, in order to achieve greater transparency in operations and reduce costs without compromising on customer service.
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