Reverse Logistics essentially refers to a supply chain working in reverse; goods moving upstream from a buyer to a seller. Frequent scenarios include returns from e-commerce and retail, as well as components for refurbishing and remanufacturing. After receipt, products can be resold, re-enter the supply chain as refurbished, or disposed of.
Considering that roughly 20% of everything purchased is returned, customers will return nearly $1 trillion in merchandise annually by 2027.
Traditional Approach & Challenges
The goal of an effective Reverse Logistics supply chain is to get the returning asset back to the point where it can be repurposed, repaired, or reused (with minimal cost and waste.) To do this effectively, its critical to understand return rates across products, the cost of gathering and shipping returns, and the potential value which could be recovered.
Given that Reverse Logistics have unique complexities which are’t easily handled through current tools and automation, companies frequently end up outsourcing the work to third parties. While less effort, this approach provides limited transparency and makes it difficult to track profitability.
In addition to leaving profits and value locked into the supply chain, this incomplete view of Reverse Logistics also limits the data that goes into forecasting efforts, further perpetuating inaccuracies.
Rather than trying to forecast which products will be returned, SCAS learns to optimize Reverse Logistics for any and all available products at a given time.
For retail environments where returned products are relatively easy to resell with minimal restocking costs, SCAS effectively accounts for returned products when autonomously setting inventory levels across various storage locations along the supply chain. This empowers retailers to maximize recouped value out of returned products.
For manufacturing & services, SCAS leverages its continuously developing capabilities to recover maximum value from each product, autonomously managing inventory.
By harmonizing Reverse Logistics with inventory management, SCAS helps ensure that each product is exactly where it needs to be, when it needs to be there, at cost that maximizes its overall value to the supply chain and the business.