Reverse logistics describes the process by which a business may get items back from a customer. For instance, if a product is defective, reverse logistics are used to figure out how the customer can deliver the product back to the manufacturer. Reverse logistics are used by automotive, electronic and computer businesses, among others.
With reverse logistics, companies are able to retrieve faulty products and refurbish them. Therefore, raw materials are not wasted and thrown away, and the cost of manufacturing can decrease. Even if the collected product is unusable, it can be recycled by the company itself. This will give the scrap value back to the company, but also ensure these parts are properly recycled. This adds to the environmental impact of a business.
Customer satisfaction is very important for businesses. When a customer knows he can return a product to the company in exchange for a new one, he will be more confident in that company. Therefore, by maintaining proper reverse logistics, a company can increase customer satisfaction while keeping costs down. If a company is transparent about processing, it can increase satisfaction even more, as a customer will know exactly what is required to return a product.
With reverse logistics, a company can save money, but the customer will save money in the end, as well. Refurbished or repaired products are often sold at lower costs than new products, even though they are in perfect working order. This is especially true in the computer industry, where refurbished products and spare parts are increasing in popularity. Many computer companies have accommodated this need by providing more refurbished products.
Reverse logistics can complete the loop in the cycle of a product, ensuring that a company has complete control over their product. Without reverse logistics, a company is unsure of what might happen to their product after it is sold. With proper reverse logistics, a business retains control over what happens to their product. This can include even having a customer return a product when it no longer functions, such as with printer ink, so it can be recycled properly.