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What is Reverse Logistics and Why It Matters

Published on: June 15, 2020

While customers are rapidly turning to eCommerce brands for all their shopping needs, the speedy delivery is the expectation of every online shopping experience. As a consequence, brands have begun to develop new technologies and experimental supply chain designs to increase shipment volume, accelerate same-day delivery, and satisfy customers while trying to reduce costs. Unfortunately, one of their most significant expenses and challenges is same-day, last-mile shipping.

Reverse logistics, also known as return management, requires the appropriate measures to promote the flow of materials back from the point of consumption to the point of origin. This flow is an essential component of order fulfillment since returns due to damage, errors, or dislike involve the disposal or reintegration of the replaced products. Reverse logistics can require various stages of planning, implementation, and management of products.

Let’s Talk Last-Mile Delivery

The last mile of delivery is the final stage of a product’s journey from the moment the purchase is made until it reaches the consumer’s doorstep. It represents a key to service quality and customer satisfaction. Last-mile delivery is the most costly and time-consuming feature of the shipment cycle. Transportation planning is a major part of last-mile delivery and is becoming more critical than ever as online orders grow. The retailers and their supply chain partners need to provide excellent service to gain a share in the market and to build brand loyalty for consumers.

Increased Returns and Reverse Logistics

The growth in online shopping and last-mile delivery options has led to more returns. It has enhanced the demand for reverse logistics operations, which must be handled in scale. Although product returns and reverse logistics can be estimated overtime, their rates, regular preparation and optimization are challenging. Reverse logistics calls for complicated coordination with many other functional areas, including driver transportation, store operations, and inventory management. This coordination is critical for maintaining operational effectiveness, a strong supply chain, and providing loyal customers with a satisfactory, timely return experience.

The scope of the reverse logistics cycle can only increase as follows:

  • Same day and next day delivery volumes rise.
  • Companies build and develop creative last-mile delivery technologies, including multi-fleet solutions and crowdsourcing.

Technology Solutions to Increase Last Mile Logistics

With the growing economy of the gig, many customers already understand the concept of local crowdsourcing services through online platforms. The location-based crowdsourcing framework allows customers to open an application for a free ride, to book a hotel to stay, to order a meal at the office, or to send flowers to a special person. The crowdsourcing concept has been widespread for some time now in delivery and food distribution. Also, retailers have noticed their low start-up expenses, asset-light services, and enriched customer experience to make their last mile deliveries better. Retailers, logistics providers, and customers can interact with the local couriers directly through the use of crowdsourcing technology for deliveries using their own transportation. Companies can get orders online more quickly, and consumers can get their items when and where they want it.

The Challenges of Last Mile Deliveries

Consumers demand more from their delivery experiences than ever before. Companies have understood the need to improve their last miles to succeed both in the long and short run. The fundamental challenge consists in sustaining a positive return on investment by maximizing the consumers’ delivery experiences while reducing related costs. Delivery is now a revolution, a trend that has redefined retailers, with consumers looking for better, faster, smoother, and more affordable delivery, regardless of their sector or type of purchase. Today, a vital factor of success for many firms is their ability to perform in the last mile.

Optimize Your Last-Mile Delivery Operations

The most reliable delivery and service experience in the last mile improves conversion rates, purchase activity, and brand fidelity. However, managing such an operation faces several last mile delivery challenges.

Every company that delivers products or services must understand the following:

  • Increase customer satisfaction to encourage and maintain retention.
  • Communicate last-mile deals to complete the checkout
  • Control associated costs with the last miles to retain a positive ROI
  • Build efficient processes and ecosystem visibility. All these objectives require the use of technology to ensure success. The best approach should suit the current processes and structures, while helping to address the needs of all private parties in your last-mile ecosystem, from management at the headquarters, to distributors and drivers.

The Benefits of an Efficient Reverse Logistics System

Companies implementing an effective workflow in reverse logistics can gain several benefits such as:

  • Reduced costs: You can decrease the value of returns in advance and correct the return order (administration, shipping, transportation, tech support, quality assurance).
  • Faster service: This applies to the delivery of the goods initially and the return/refunds of the products. Quickly refunding or replacing goods helps to restore the trust of a consumer in a brand.
  • Customer retention: Error management is just as critical as sales. You need to make it right if a customer has a bad experience with your product. Fulfillment blunder can build opportunities for education. Learn how to maintain your customers satisfied and involved with your business-even after a mistake has been made.
  • Reverse logistics policies can also provide a comprehensive advantage through reducing waste and ecologically responsible and friendly practices.

The Bottom Line

In all sectors, reverse logistics is an essential component of most supply chains. The performance of reverse logistics is remarkable.

While dealing with the supply chain may seem fascinating, the truth is that reverse logistics can be just as exciting, insightful, and worthwhile.

Let's talk today, so you can deliver smarter tomorrow!

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