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The Other Side of Logistics – Impact of Reverse Logistics on Spend Management & Supply Chain

May 16, 2017

The discipline of Reverse Logistics is as important to a business’s bottom-line as the usual management of procurement, logistics and spend analysis. In an ideal world, products would move from the manufacturer’s production lines, onto the subscribed for logistics solution and reach the customer. Herein, the product will perform splendidly, exceeding its expected life cycle, and the customer will have no cause to complain.

Unfortunately, we live in an imperfect world wherein things get damaged, may not perform upto their expected abilities and will need to be replaced or discarded. In such instances, the reverse logistics cycle is activated wherein the manufacturer will have to engage a logistics service to pick up the problem product from the customer before repairing, replacing or refurbishing the same. This is an unavoidable part of the modern sales cycle, has a telltale impact on the company’s spend management, yet isn’t given the prominence or optimized for peak performance.

Why must manufacturing companies invest handsomely in their own reverse logistics efforts? While this activity might seem like a critique on the company’s engineering and customer service standards, this really is an opportunity for understanding and growth if the process is executed right.

1) Improving Customer Satisfaction

True, the product has failed to live upto expectations, but herein is a chance to assuage the lingering bad taste in the mouth. Customers are eager for faster turnarounds on their repairs and greatly appreciate a company that will attend to their concerns in time and in a dignified manner. Infact, situations like these offer your company a chance to shine in the customer service department- an overwhelming majority of your customers appreciate a concerned and timely response.

2) A Cost-Effective Source of Ready Customer Feedback

Examination of the nature of complaints, spend analysis, probability of customer retention and other data pertaining to the return will help you identify the problems in your product and the overall manufacturing process. This ‘setback’ can be used as a platform to correct the inherent issues and develop a more robust product, aided by better spend management and streamlined production process.

3) A Chance to Improve the Supply Chain

The keyword here is data, pertaining to entire product or part specific replacements that will help the manufacturer improve the manufacturing process, the product itself, and the various components and systems involved in the manufacturing cycle, ergo, the supply chain. This insightful data will also help the manufacturer forecast the need for raw materials, and avoid wastage at all levels of the process- thus, saving valuable funds as part of the company’s spend management procedures.

Data & Analytics from SpendEdge- Simplifying Procurement & Spend Analysis

The key to a robust reverse logistics platform is the form in which data is generated from the inherent systems and how this information is utilized to streamline and improve the overall logistics and reverse logistics endeavors. Ultimately, analytics driven from this data is utilized to perfect the supply chain and inculcate such seamless features as- real time information on products, service schedules, locations, servicing specialists and associated spend analysis that helps service the customers in quick time, without wasted efforts, time and resources.

With a competent grasp on the aforementioned data, and the drawing of rich insights from the same, companies can greatly improve their procurement and logistics regimen. SpendEdge can help here, drawing from its experience as a global procurement intelligence leader and helping you bridge that tantalizing link between customer satisfaction and profitability.

For More Information on reverse logistics process flow, 3PL companies, transportation and logistics, and logistics analytics: 

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