Reverse Logistics

A reverse logistics operation is considerably different from forward logistics.

Reverse logistics is the movement of products, materials and information in the opposite direction for the purpose of creating value, or for correct disposal.

When the costs associated with it become too high, reverse logistics can be a significant drain on profitability (Mckeller, 2014).

Reverse logistics is the process of moving goods from their point of consumption to the appropriate point, or link, in the supply chain for the purpose of recapturing any residual value through re-manufacturing or restoration, or correct disposal. Reverse logistics is not only concerned with recycling, redesigning or the reduction of energy use and pollution but also includes processing returned goods due to damage, seasonal inventory, restocking, salvage and recalls.

It must establish convenient collection points to receive the used goods from the final customer or remove assets from the supply chain so that more efficient use of inventory and/or material overall can be achieved. Packaging and storage systems are required that will ensure that most of the value still remaining in the used good is not lost due to careless handling.