There is a complexity involved with the reverse logistics process that some companies manage better than others.
If it is incorporated as a key function of the business with the right investment in technology and support networks, it can operate as a major asset and value addition to the brand.
Yet so many organisations across a range of fields struggle to understand its role and fail to institute proactive measures that address the issue head-on.
Goods are always intended to move in one swift direction, but there will always be moments where repairs, lost stock or errors cause an interruption to the conveyor belt.
Let us outline what the most prescient challenges are for enterprises who manage this facet of their business.
Third Party Repair
It is relatively easy and straightforward with a basic transaction when there are two key parties involved – the customer and the business. When a third party repair provider enters the reverse logistics equation, new challenges begin to arise. Items can be lost if there is a lack of tracking software included in each individual stock product and if there has been a warranty issued, that is a matter that has to concerned the distributor or manufacturer at the other end of the transaction. There is always a frustration with the ‘middleman’ in these instances, but it is simply a case of enacting clear communication protocols.
To Automate or Not to Automate?
One of the great philosophical debates on the topic of reverse logistics is based around the concept of automation. The frustration on this point is that there is no simple answer or one-size-fits-all solution that can be offered. There will be a variety of factors at play, from the resources of the organisation, the technology that is available and on site to the nature of the supply chain where storage space and recycling processes all come into play. Automation works to drive efficiency levels and lower cases of human error, but each unique stock item has an individual quality and issue that has to be judged independently. There is a layer of complexity when determining how much damage has been incurred and what protocols have to be utilized to have it back on the shelves and ready to shift back into the market.
Erosion of Loyalty and Brand Value Damage
We have openly discussed many of the tangible elements that are included with reverse logistics and this delivers a major challenge to organisations who have to manage their assets. Yet there is a series of intangible factors that prove equally as challenging for enterprises that need to forge a sound reputation amongst their consumer base and the community at large. Companies that sees stock having to be consistently repaired or where customers return items ends up eroding confidence in the brand and damages the image of the organisation, sometimes irreparably. This is a discussion point that is almost impossible to draw on a balance sheet or design in a pie chart, but it is there nonetheless. Brands can spin and create marketing jargon all they wish, but the greater the strain on resources returning and being spun back into the supply chain, the lower the esteem the business is held in.
The end user is entitled to enjoy protections when it comes to their investment in a brand and if those standards fall short, they are in a position to execute sound practice pertaining to their reverse logistics. This matter is reflective of the organisation and their willingness to respond and listen to the needs of their consumer base. It will work to separate the versatile and skilled practitioners from the poor ones, allowing the market to decide which companies make reverse logistics a priority.