Reverse Logistics: From Black Hole to Untapped Revenue Stream

Recognizing that reverse logistics can drive real impact to the bottom line, this is an area of high priority for companies looking to reduce costs, add efficiencies, improve the customer experience and build sustainable supply chain practices. As a result, manufacturers are uncovering the hidden value of returned assets and streamlining return, repair and product reallocation processes.

Once a supply chain afterthought, reverse logistics has evolved into a highly complex endeavor. This is especially true in the hitech/electronics sector, where product lifecycles have dramatically shortened, global service networks create more supply chain complexity, products are highly customized to consumer preferences and sustainable practices are increasingly required.

The primary driver of reverse logistics is the staggering cost of returns. In 2009, retail returns in the United States amounted to $185 billion, equal to about 8 percent of the estimated $2.3 trillion in retail products sold by members of the National Retail Federation.