Reverse Logistics is often associated with 'returned goods' or even recycling of products, but the gamut of reverse logistics activities include much more than just returns management or recycling. The Reverse Logistics Executive Council defines Reverse Logistics as 'The process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal.'
In order to better understand the process of reverse logistics, let us break down the definition into succinct parts.
The first part of the definition talks about planning, implementing and controlling the process. This implies that the process is an important business function that requires planning and control. It also indicates that a reverse logistics plan has to be implemented by the business. Planning and controlling becomes important when there are resources to be spent and some gains to be expected in return for the investment. Thus, reverse logistics is definitely not an overhead for any business nor a cost center but a business process, a part of the supply chain that requires careful planning and control of activities. Many businesses are now realizing the strategic importance of their reverse logistics function as a key differentiator in competitive markets. A perfect example is that of Canon, which has a well developed toner cartridge return program that not only earns Canon considerable revenue through remanufacturing of cartridges but also earns it substantial goodwill as an ambassador of 'recycling programs'.
Moving on to the second part of the definition which states that it is an efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin. This part explains the direction of the process, drawing parallels with the definition of a supply chain which is often defined as the flow of goods, information and money from the supplier to the end consumer. As a matter of fact, the definition of supply chain merely talks about the forward flow of goods and information whereas, for the definition to be complete it should include the backward flow, i.e. the reverse logistics as well.
SOURCE:
http://wwww.helium.com/items/1470845-what-is-reverse-logistics
In order to better understand the process of reverse logistics, let us break down the definition into succinct parts.
The first part of the definition talks about planning, implementing and controlling the process. This implies that the process is an important business function that requires planning and control. It also indicates that a reverse logistics plan has to be implemented by the business. Planning and controlling becomes important when there are resources to be spent and some gains to be expected in return for the investment. Thus, reverse logistics is definitely not an overhead for any business nor a cost center but a business process, a part of the supply chain that requires careful planning and control of activities. Many businesses are now realizing the strategic importance of their reverse logistics function as a key differentiator in competitive markets. A perfect example is that of Canon, which has a well developed toner cartridge return program that not only earns Canon considerable revenue through remanufacturing of cartridges but also earns it substantial goodwill as an ambassador of 'recycling programs'.
Moving on to the second part of the definition which states that it is an efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin. This part explains the direction of the process, drawing parallels with the definition of a supply chain which is often defined as the flow of goods, information and money from the supplier to the end consumer. As a matter of fact, the definition of supply chain merely talks about the forward flow of goods and information whereas, for the definition to be complete it should include the backward flow, i.e. the reverse logistics as well.
SOURCE:
http://wwww.helium.com/items/1470845-what-is-reverse-logistics
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