Just like how taking the product to the ultimate customer is a step-by-step process, managing the reverse also is. The process by which the sold products are again sent back to the company is called reverse logistics. The following are the 5 Rs of this process.
Of the many products sold by the company, some of them come back as returns. A customer may return the product due to various reasons. The reverse logistics flow begins with returns from customers. Products may be returned because of defects, non-compliance with the requirement, damages, or the product may have been purchased on the wrong assumption. There has to be a separate set of processes in each company to handle returns. Receiving, inspecting, and testing the products returned should be part of the process. Return material authorization should also be done.
Here, the retail reverse logistics is not initiated by the customer but by the company. This is done when the product has to be recalled due to any potential hazard or to comply with any updated government regulations. Faults in electronic components or batteries become a reason for recall most of the time. Here too, a process should be in operation in each company to manage the recalls effectively.
All returned and recalled products are not disposed of. If the products are not hazardous, they can be repaired and sold again as refurbished products. Those components which are functional can be put to effective use to create a new product at a lower cost than the original. An effective reverse logistic process helps you in achieving this successfully.
If the customers returned products not because of defects, but just because it wasn’t the intended product, then it can be repackaged and sent back to inventory. A facility for repackaging should also be available.
When the products returned can no longer be used, they must be scrapped in an environment-friendly manner. Recycling of hi-tech devices helps companies minimize waste.