What is Reverse Logistics Management?

Reverse Logistics is 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.

Reverse Logistics is the set of activities that is conducted after the sale of a product to recapture value and end the product’s life-cycle. It typically involves returning a product to the manufacturer or distributor or forwarding it on for servicing, refurbishment or recycling. Reverse logistics is sometimes called aftermarket supply chain, aftermarket logistics or retrogistics.

People also use the term called as “milk run” which means you are planning for a cluster of sites and you collect all the equipment as part of the reverse logistics run.

This is a broad term, but most proactively it is the process of inventory control and distribution. It means identifying when products are out of the way or end their life at the point of sale, then sorting them into the right allocation to ensure that they find their way to the right customer for reuse, recycling/disposal, or whatever else may be appropriate.

Reverse Logistics Management often includes some form of returns management which could serve as an element in reducing risk for retailers through handling returned goods with care and planning returns back onto retail shelves as soon as possible. Extending product lifecycles by encouraging customers to use rental plans can also go a long way in keeping things sustainable and profitable.