Reverse logistics is the process involving the return movement of goods away from their final destination for the purpose of capturing value or proper disposal. While conventional logistics deal with the processes and events used in bringing a product or resource to the customer, reverse logistics takes at least one backward step in the supply chain.
The process covers the planning, implementation, and controlling the flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin in a cost effective manner. In 2015, the return delivery costs amounted to around 246 billion U.S. dollars in North America alone and global return costs of over 600 billion U.S. dollars. The reverse logistics process may also include management and sale of surplus or returned equipment and machines from the hardware leasing business.
For example, when a defective item is returned by a customer, the manufacturing firm organizes return shipping, testing, dismantling, repairing, recycling or disposing the of the defective product. In 2015, over 65 million U.S. dollars worth of defective sales products were returned to stores worldwide, while clothing and accessories accounted for the largest share of returned items in 2016. In the United States, some 5.8 million packages were returned in the first week of January, 2016. One of the most important return policy characteristic of online purchases is when return shipping is free or when the customer is able to get a full refund rather than a partial refund or in-store credit.
The main aim of reverse logistics is to optimize and create more efficient aftermarket activities that lead to monetary saving and the sustainable conservation of environmental resources. Thus, reverse logistics is important for use in advanced green supply chain management concepts and practices.
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