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Why E Commerce Companies Need to Invest More in Reverse Logistics

What is reverse logistics?

Reverse logistics in ecommerce refers to the return process involved wherein the goods are moved from their point of consumption back to their point of origin. Two key reasons for using reverse logistics in e commerce could be either for disposal or for recapturing value. Making the purchase as well as the return process easy and hassle-free plays an integral part in ensuring customer satisfaction. This consequently results in repeat purchases and loyal customers. To ensure this, several companies are now even hiring third-parties to handle their reverse logistics processes.

Benefits of reverse logistics in e commerce

When it comes to an e commerce business, placing the order is one part of the customer’s encounter with the company and order fulfillment is the other. Online shoppers often don’t shy away from returning products that don’t meet their expectations and making them jump through hoops in order to get their money back on a dissatisfying sale is a great way for e commerce companies to lose their business forever. Here are some of the key benefits of reverse logistics in e commerce:Contact US

Customer retention

In the modern world, having a functional and efficient logistics system is imperative to thrive in the e commerce market. A major drawback of e commerce business is the lack of tangibility of products, and customers often tend to bank on the pictures/videos displayed on the e commerce site. Once the product reaches the customer it might not match the customer’s expectations. One of the key benefits of reverse logistics is that customers would choose the company that offers them the safety net of being able to return products without too much of a fuss.

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Reverse Logistics Services Provider Leveraged SpendEdge’s Supply Chain Risk Analysis to Curtail Inventory Costs and Improve Forecasts

Supply Chain Risk Analysis Engagement Overview

The reverse logistics services provider wanted to proactively address the growing complexities of their global supply chain. To gauge the performance of their supply chain, the reverse logistics services provider approached SpendEdge to devise a comprehensive approach to supply chain risk analysis. During the course of this engagement, a detailed quantitative risk analysis of the supply chain was carried out to help accurately forecast inventory.

The supply chain risk analysis solution allowed the client to integrate risk prioritization as a core strategy in their current risk management system. request proposal Additionally, the reverse logistics services provider redesigned their risk management system to uncover risk factors and devised robust proactive risk mitigation strategies.

About the Client

A leading reverse logistics services provider based out of the United States.

Business Challenge

The client was facing difficulties in gauging the performance of their supply chain and managing risks across their business units.

How did SpendEdge Help the Client?

Step 1: Developed a framework to gauge the impact each factor involved in the supply chain

This step involved the quantification of the supply chain activities and their contribution to the flow of materials both in monetary and physical terms. This helped the client to evaluate the importance of each factor impacting the overall performance of their supply chain.

Step 2: Mapped the supply chain activities

This phase involved the identification of activities, resources, establishments, and regulatory requirements that are required to create a flowchart to obtain an overview of the supply chain activities. It also offered the client details on the flow of materials and products throughout the supply network.

Key questions answered in this supply chain risk analysis engagement include

Benefits of the Engagement

Our supply chain analysis solution helped the reverse logistics services provider to determine the impact of factors affecting the supply chain and deliver the service offerings more quickly and efficiently to the end-users. The supply chain risk analysis engagement also offered superior visibility into the supply chain processes by establishing a cohesive relationship between all tiers of the supply chain.

Why incorporate supply chain risk analysis solutions?

Supply chain risk analysis helps in the identification of supply chain activities or processes that can be bypassed to curtail inventory costs and improve forecasts. It also aids businesses to optimize their supply chain processes and reduce redundancy while assisting in the creation of enhanced value-added services.

Our Findings

Supply chain risk analysis incorporates a wide range of functions that may seem intimidating even to a well-established reverse logistics services provider. However, it can be effectively modeled by dividing them into several strategic areas. A supply chain risk analysis engagement that aims to determine current real-world practices in supply chain risks indicates a radical takeoff from conventional models.

To know more about our supply chain risk analysis solutions for reverse logistics services providers

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4 Ways to Save Big Bucks by Banking on Reverse Logistics Companies


Logistics undoubtedly plays a vital role in improving customer satisfaction. If your logistics and supply chain does not fare well in ensuring on-time delivery at the best prices to the final customer, then customer loyalty and the success of your company ultimately goes for a toss. With the growing need for businesses to invest in new opportunities for logistics and supply chain development, several companies are turning to new capabilities such as reverse logistics.

Though reverse logistics is a relatively new concept, it is gradually becoming a full-fledged operation for most businesses. It deals with the processes for inverting the flow to deal with returned parts, materials, and products from the consumer back to the producer. Most often, this includes repair, damage, warranty recovery, value recovery, redistribution, product recalls, service or product contract returns, and end-of-life recycling. 

The million-dollar question that companies have to ask is whether they should rely on in-house reverse logistics or outsource it to a third party who has expertise in the function. A significant drawback of managing this function in-house is that it takes away time from focusing on the core functions of the business. Here is why outsourcing the task to reverse logistics companies can prove to be more beneficial for your business:

Benefits of Banking on Reverse Logistics Companies

Improve the company reputation

A strong reputation or goodwill in the market is key to repeat business and increasing revenues in the long run. Customers expect a hassle-free and easy process when it comes to reverse logistics. By outsourcing the function, companies can provide their customers with a single point-of-contact for dealing with all repairs, warranty replacements, or other needs after the sale. Consequently, this boosts the customer service level of the company especially when you have a dedicated team or person working on all reverse logistics needs.

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Focus on the core functions

Managing reverse logistics not only requires additional capital and time but also requires space. Companies will have to store products that are being repaired or sacrifice warehouse space for products that are awaiting recycling. This is where reverse logistics companies come to your rescue. They bear the costs associated with storage, management, and fulfillment of all reverse logistics processes, which lets the company focus on its key functions and operations.request proposal

Easier inventory management

When a company outsources its reverse logistics, it helps them to attain better inventory management levels. By relying on third parties, companies can focus on their actual inventory and not worry about SKU numbers, storage, and transport of reverse logistics. As a result, there will be fewer errors or delays in shipping new products to consumers and meeting ever-decreasing delivery windows. Also, companies cannot track what products consumers are more likely to return to based on malfunction. This translates to the fact that the concept of predictive inventory management and forecasting for reverse logistics could eat away the company’s profits. But with outsourcing, this burden is transferred on to another company.

Better flexibility

In the current dynamic market scenario, the ability to quickly respond to changes is a critical factor for success. Especially in this era where customers are armed with the power of social media and the internet, they can change their opinions and decisions almost immediately. Hence, modern businesses need to be flexible to meet these changing consumer demands. As reverse logistics companies are built on the changing business of its partners, it can help companies increase their flexibility without increasing their budget.

Want to know how reverse logistics can benefit your business?

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SpendEdge’s Spend Analysis Assists a Renowned Reverse Logistics Provider Achieve Substantial Savings by 15%

Overview of the logistics industry

In the recent years, the logistics industry is witnessing robust challenges in terms of high operation costs, low margins, and a shortage of talent. To address these challenges, prominent organizations are planning to streamline their service capabilities to improve delivery performance and increase customer satisfaction levels. With the rising demand for one-stop solutions, businesses are entering mergers and acquisitions to tap potential markets and enhance their functional capabilities. Moreover, the growth of reversed logistics space can be attributed to factors such as robust GDP growth, globalization, and increasing foreign direct investment.

Some of the factors curtailing the growth of the reverse logistics space are:

  • Tracking warranty: As reverse logistics involves the process of replacing commodities directly from the customers, it becomes difficult for the companies to track the warranty of the products. In the case of third party repair by an OEM, it becomes essential for businesses to track those secondary warranties and generate appropriate claims for the warranty service offered.
  • Improving efficiency: As the reverse logistics space is witnessing relentless competition with the presence of a considerable number of competitors, it becomes essential for the businesses to leverage technological capabilities to streamline their work and deliver efficiency. With the help of advanced software, the company at large can become much more productive and offer seamless and reliable services to the customers.

The Business Challenge and Our Journey

The client, a renowned reverse logistics provider, wanted to accurately classify the spend and gain better visibility into their overall process. With the help of industry best practices, the client wanted to efficiently streamline their process to identify critical savings opportunities in an easy manner. Moreover, through a robust spend analysis solution, the client further wanted to gain accurate, consistent and timely insights into the spend and accelerate their decision-making process.

To identify and calculate the market trends of commodities, the procurement experts at SpendEdge carried out extensive research comprising interviews and discussions with prominent stakeholders in the reverse logistics space. To identify the potential bottlenecks, the experts also compiled information across a wide array of reliable sources trade shows, industry forums, and company presentations.

The spend analysis solution offered by SpendEdge assisted the reverse logistics provider to compare the spend with that of the industry peers and gain substantial savings. Moreover, the solution also helped the client identify bottlenecks in terms of fraud and non-complaint activity and prioritize savings opportunities.

Fundamental questions answered in this spend analysis solution include:

Sp- spend analysis

The Results

During the course of the engagement, the reverse logistics service provider was able to identify and prioritize sourcing opportunities and devise an effective spend management strategy. In addition, with the help of the spend analysis solution, businesses leaders can monitor performance on the KPI’s and gain granular insights into the spending trends and buying activities. The solution also helped the reverse logistics client understand the products specification including the quality, availability, and service requirements.

To know more about our spend analysis solutions

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2018: New Year, New Trends – Where is the Transportation Industry Heading?

Today, the importance of transportation is far greater than getting people and goods from point A to point B. Advancements in technologies have enabled the logistics and transportation industry to improve the quality of their services. Global businesses and international trade rely highly on the transportation services to move the flow of goods within the economy. Virtually everything around us from the clothes we wear to the device we use is sourced from multiple locations across the world. As every component has to be transported to different players across the supply chain, the overall cost keeps on increasing due to shipping charges and other value-added activities. As a result, the transportation industry is constantly on the lookout for ways to contain this cost. So what are the top trends in the highly competitive transportation industry for 2018?


Self-driving trucksSE_Demo2

Last year, the hype was all about self-driving cars and its ability to seamlessly drive around cities without any mishaps or accidents. This year though, the concept has evolved to bigger vehicles – self-driving trucks. A combination of AI and myriad sensors can correctly evaluate road conditions and learn how drivers behave under specific conditions. Additionally, vehicle-to-vehicle (V2V) communication systems can share learned information and improve the AI driving pattern. As a result, such self-driving trucks can potentially become better drivers than human themselves. Tesla recently announced Tesla Semi an all-electric truck with Tesla Autopilot, which allows semi-autonomous driving on highways.

Blockchain in logistics

One of the major problems faced by the transportation industry is the difficulty to effectively look at performance history and trace the flow of goods. Blockchain’s ability to provide security and transparency efficiently solves this complication as a logistics company can quickly recall the product back to its origin in case any damage is there. Additionally, if a potential customer wants to buy a used car, he may not have any information in the previous condition of the vehicle. However, with blockchain, all parties involved in the transaction can have a clear view of the past records. Another interesting use case of this technology can be to estimate the cargo space for specific shipping orders. The data can be used to calculate the shipping costs, after which automatic contracts can be executed when certain conditions are met and consequently stored into the blockchain network.

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Benefits of Warehouse Management System

A modern-day warehouse has to deal with large volumes of goods flowing in and out of it. The warehouse also has to manage recording item details, where it is stored, where it is to be sent among others. Manual systems may not be able to cope with such large volumes of data which has to be processed and retrieved instantaneously. This is where a proper warehouse management system (WMS) can contribute to increasing the efficiency of warehouse and in turn contribute to the company’s supply chain. A warehouse management system can be a standalone application or a part of an ERP system which enables centralized management of tasks SE_Demo2regarding inventory tracking and processing. Numerous have elevated the capabilities of warehouse management system to perform data-intensive tasks and incorporate RFID and voice recognition technology to enable automation.

Benefits of warehouse management systems

Space savings

Reducing the amount of clutter and properly organizing stocks can lead to savings in warehouse space. A warehouse management system allows the warehouses to properly organize the goods in such a manner that they take up less space. Enabling accurate stocking, slotting, and pulling of orders gives in-depth insights to companies in how much stock is needed so that they can procure only the required amount and avoid overstocking.

Reduces equipment wear and tear

Warehouses are filled with stocking and moving equipment including trucks, pallet jacks, forklifts, and carts. The more these equipment are used in a single day; the more vulnerable they are to wear and tear decreasing the life expectancy of the equipment. Increasing the machine idle time will ensure that the machines last longer. So, a warehouse management system can increase the machine idle time by eliminating the need to stock, pick and reset unnecessarily. They do so by reducing redundant picking routes, managing inventory optimally, and decreasing the per-equipment cost of shipping.

Reduces security vulnerabilities

Security is of the utmost importance in a warehouse. There might be instances of pilferage and theft within the warehouse by employees, which can be easily manipulated by changing stock numbers in a record keeping system. An effective warehouse management system will keep up-to-date records of inventory and provide authorized access to specific users. Instances of tampering can be easily identified with user-specific logins. Furthermore, automated systems like RFID can effectively eliminate such activities by keeping real-time information on inventory levels.

Increases customer satisfaction

A proper warehouse management system keeps accurate track of inventory levels and reduces errors in order fulfillment process. Eliminating such errors means that wrong deliveries are avoided, which would result in dissatisfied customer and increased costs in terms of reverse logistics. It results in goods getting delivered in proper condition to the correct customer each time, which increases the customer satisfaction levels and decreases the number of customer complaints.

Boosts workforce productivity

A typical warehouse is a very busy place with workers hustling and bustling to receive, stock, and dispatch items. A typical worker would have to move around a lot making multiple trips to the same place and also making additional trips to rectify errors. A warehouse management system reduces such errors and ensures optimal stocking so that workers would have to move around less within a warehouse. Additionally, it also reduces overexertion and allows workers to pick up more items in less time thereby increasing efficiency in order fulfillment. This may also result in the organization needing lesser workforce due to higher productivity gains saving them in labor costs.

For more information on benefits of warehouse management systems (WMS), warehouse control systems, inventory management software, facilities management, WMS solutions, and logistics and supply chain management:

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4 Little Changes to Obtain Big Savings in Shipping Cost

Companies can get competitive in terms of cost at a product level but face challenges maintaining the prices when shipping costs are taken into consideration. It is one of the biggest expenses for numerous small businesses. Depending on the nature of business and contract negotiation, shipping cost is either borne by the buyers or sellers. Regardless, since it accounts for a significant percentageSE_Demo2 of the product cost, companies are looking for measures to reduce and realize savings on the shipping costs. Here are some of the ways to trim the shipping costs to remain competitive in the marketplace:

Negotiation with Multiple Carriers

All shipping companies have pricing schedule based on volume, product type, and distance. It would be unwise to explore rates of multiple shippers constantly. Shipping needs of businesses may change over time and so may the pricing. Another place where small businesses can save money is while negotiating shipping volumes. Although service providers may affix a fixed rate for volume shipping, businesses can negotiate to lower the shipping rates for a fixed volume.

Reduce Shipping Errors

Majority of the money spent on the shipping cost of wasted in correcting shipping orders delivered to the incorrect location. Such errors not only increase the shipping cost but also increase the overall shipping time thereby reducing customer satisfaction and repeat business. Since small businesses may not be able to afford real-time wireless warehouse management system and bar-coding solution, it is necessary to double check all shipments against the original order to make sure the address is validated.

Using Packaging Provided by the Carrier

Proper packaging is essential to ensure that shipments reach the destination safely and intact. To ensure safety and for branding purpose, companies might want to use their own packaging which can incur an additional dimensional fee if the size exceeds regulations set by individual carriers. Additionally, companies can make simple packing mistakes such as using the wrong-sized box, using weak or compromised box, use wrong packing material, or poor taping job. Using packaging provided by carriers not only eliminates the extra-dimensional fees but also ensures that packaging job is proper. Companies can save as much as 10%-20% of the shipping cost this way.

Consider Hybrid Services

Many carriers are now offering hybrid services like FedEx SmartPost and UPS SurePost which can cost half as much as standard delivery options. Such services reduce the transit time, minimizes handling and maximizes cost savings. These services reduce the delivery cost by collecting packages from you and shipping them to the post office that is closest to the destination. The post offices then use local mailman to make the final delivery. Although it can lead to substantial cost savings, it can slow down the delivery time.

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A Futuristic View of the Logistics Industry

What will the future of logistics industry look like? Will it be as easy as ABC when the teleportation technology is finally ready? That may stand true in a very far future, but the technologies and developments at present doesn’t look to disappoint the logistics industry either. A number of disruptive technologies including IoT, autonomous vehicles, blockchain, robotics, and predictive analytics are impacting how the logistics industry will function in the near future. Such unprecedented change in technologies is bound to drive the supply chain to be leaner, faster, and automated. That’s a huge sigh of relief for procurement professionals who are having sleepless SE_Demo2nights due to increasing overheads and pressures to meet customer expectations.

The Future of the Logistics Industry

Underground Freight Networks

Today, the majority of the consumer commodities such as water, gas sewage, and oil are transported through underground pipelines. In the near future, delivery of the consumer goods may follow the same path. Some countries in Western Europe are already testing out ways to transport consumer goods through automated subterranean networks. For instance, in Belgium, the University of Antwerp started working on a project “Underground Container Mover” that would transport large 40ft containers along a 21km long conveyor belt carrying 5,500 shipping containers each day. Such systems would enable a constant flow of goods without the worry of traffic and accidents.

Autonomous Fleet

Fuel and vehicle costs are not the only major cost components for goods transportation in the logistics industry. The vehicle has to be manned by drivers and delivery personnel, which incurs costs. Also, drivers and delivery personnel can only perform a certain amount of deliveries in a day. So the companies in the logistics industry are looking at autonomous fleet solutions to solve such issues. One of the most popular solution in this regard is drone delivery which has been optimistically looked upon by Amazon. Autonomous vehicles are also making its way in the warehouse in the form of vision-guided fully autonomous mobile robots, which can automatically process orders and move inventory across the warehouse.

E-Brokerage Platforms

Digitization has highly influenced the logistics industry. The growth in e-tailing and connectivity technologies have brought in new solutions for the logistics industry. Digitization in trucking has forced traditional freight brokers to revamp their business model towards mobile freight brokerage solutions. Companies are looking to implement uberization of trucks in order to utilize empty spaces and contribute towards the sharing economy. In the future, apps may be able to match truck drivers with shippers requirement on routes, rates, and schedules. Such apps can also automate the delivery dispatch, status change, load-finding, and driver payment processes. The end result would be savings in operating and fuel costs by improving asset utilization.

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Undeniable Benefits of Warehouse Automation

Automation is the most trending topic in the 21st century as all industries are embracing the technology to attain multi-fold productivity gains. Automation has been widely used in the manufacturing industry to reduce human efforts and errors. However, other business areas and industries are already looking at automation to be the gamechanger, one such area being warehouse automation. Warehouse automation includes the use of control software and radio data terminals to make simple decisions on storing and indexing items. Additionally, automation can also be used in a warehouse with robots, automated cranes, sorting machines, andSE_Demo2 conveyors. So how can warehouse automation benefit the organization?

Benefits of Warehouse Automation

Increase Efficiency

The efficiency of warehouse highly depends on quickly identifying where every product is located. Previously, warehouse staffs relied on manual indexing systems to find where each item is located which took a lot of time. With warehouse automation retailers can instantly locate any of their inventory eliminating all possible human errors. Additionally, centralized data systems keep managers and other personnel connected continuously with real-time access to data on inventory and shipments. Such systems usually use barcodes and RFID to track each SKU’s, their origin, location, and destination.

Eliminate Errors

Mistakes made in the warehouse not only increases waste and reduce efficiency but also decreases the customer satisfaction when wrong products are delivered. Additionally, if the product is lost or misplaced, retailers not only lose the price value of the goods but also potentially lose business with customers. Also, they will have to allocate valuable personnel time to deal with the mistake and compensate for the error. Bar-code and RFID technology can display all information of a package including who, when, and where to deliver. In addition to that, such technologies can be programmed to sort each item automatically based on where they are to be shipped.

Reduce Physical Footprint and Energy Usage

Since RFID technology allows real-time tracking of goods in a warehouse, a company can maintain low levels of inventory efficiently. Additionally, using warehouse automation technology such as AS/RS minimizes storage space and maximizes inventory handling efficiency. Lower warehouse footprint typically requires lower energy to light, heat, and cool the facility. Also, energy use in moving product from point A to point B is also drastically reduced due to smaller distances.

Reduce Staffing Requirements

Adopting warehouse automation eliminates the need to hire too many employees unnecessarily. Since all tasks of checking in products, sorting, and dispatching are automated, fewer employees are sufficient. Firstly, it reduces the chances of work-related injuries as dangerous jobs are taken care by automation. Additionally, it also saves costs and decreases the carbon footprint of the overall operations.

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Optimizing Material Handling to Maximize Warehouse Efficiency

Companies usually invest considerable sums in setting up massive warehouses. As a result, warehouse spaces are costly, and companies can incur huge costs regarding carrying, handling, and storing within a warehouse. Companies are constantly figuring out ways to optimize warehousing operations to increase cost savings. With the advent of technology, automation, and data analytics, SE_Demo2companies have a variety of options to streamline the material handling process to utilize the warehouse space effectively. So how can companies effectively increase cost-savings by effective material handling to optimize warehousing space?

Accurate Forecasts and Inventory Management

Accurate forecasting is critical to a successful inventory management. Even a small percentage difference in forecasting can result in excess inventory, which takes up additional warehouse space and freezes up the inventory capital. Its high time for companies to abolish the traditional spreadsheet-based forecasts and opt for sophisticated solutions, which account for multiple factors for forecasting. The current ERP solutions take in historical data, seasonal trends, promotional activities that are processed by algorithms to generate a more accurate forecast. A precise forecast figure assists the company to hold just the right amount of stock increasing customer service levels and minimizing stockouts.

Maximize Space Efficiency and Layout Design

The most obvious way to increase warehouse storage space would be to expand horizontally by adding more square footage. In recent times, as land becomes a scarce resource, storage facilities are looking to increase the holding capacity per square footage by expanding vertically. Designing an efficient warehouse layout with right industrial storage systems can ensure maximum carrying capacity and thereby improve operational efficiency. Additionally, by analyzing the materials that need to be stored and the material flow, efficient layouts can be created to minimize travel time, ease inventory tracking, and minimize the chance of losing the small items.

AS/RS Warehouse Storage Solutions

An automated storage and retrieval system (AS/RS) can maximize warehouse space by storing large volumes of material in a small footprint and help eliminate errors. These solutions can drastically reduce the travel time in the warehouse, which results in optimized operational performance. A modern-day warehouse execution system (WES) can encompass warehouse management functionality, material handling equipment (MHE) control, warehouse control system functionality, business intelligence and integration with host ERP systems.

Advanced Warehouse Material Handling Equipment

Companies looking to improve their warehouse productivity should look to adopt advanced warehouse material handling equipment as it results in better productivity and improve safety.  When purchasing such equipment companies should analyze the suitable loads that will be carried with considerations for margin of safety. Other factors to consider in the purchase process includes the width of aisles, turn spaces, vehicle features, and turning radius.

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