Clay News | Major Errors With Reverse Logistics That Cost Companies Big
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Major Errors With Reverse Logistics That Cost Companies Big

Major Errors With Reverse Logistics That Cost Companies Big

On the surface reverse logistics doesn’t appear to be a significant issue to stress about.

For most businesses the stock that they send out to customers is kept at their end without a requirement for additional parts, repairs or returns due to a fault or lack of quality.

However, for manufacturers and retailers who strive to make financial gains, expand their reach, improve their brand and limit their exposure to risk, it is a department that requires Pendulum Logistics expertise and detailed attention.

The mistakes and missteps that occur in this section of the company are more prevalent than most managers would like to admit to themselves.

Here we will outline some of the more regular occasions where errors occurred, costing the enterprise over the long run.


Misuse of Automation

Software and technology can be a major timesaver for companies that need to run on schedule and within budget. By having these outlets available and on hand, professional operators can track items in real time, ascertain where stock is held within the warehouse, judge the lifespan of the product and shift items according to their status. This is a key element within reverse logistics but if automation is either too heavily relied upon or not utilized enough, the entire balance of the business model can falter. Such an error occurs with a lack of oversight and failure to understand what role automation should play within the enterprise, offering a value addition that only assists managers without undertaking all tasks.


Lack of Data Awareness

The role of data within the realm of reverse logistics is critical to short, medium and long-term commercial success. Information underpins every successful action that a brand can make. Organisations need to know what types of items are being returned, why it is being returned, who is sending the product back, where from and what fees and costs are involved. By tracking real time data and reading predictive reports on these trends, managers can begin to assess the terrain and make determinations that will seek to minimize risk and improve productivity. The major error that companies make in this setting is just to read reporting at face value, failing to identify these trends and behaviors that require proactive measures.


Failing to Correctly Value Assets

When couriers are called upon to ship labels, stickers and small parts that are cents on the dollar, the equation doesn’t add up. That is money being bleed out of the organisation and it requires managers and warehouse operators to correctly value their assets. This is where the subjects of reverse logistics and economies of scale are important, attributing items to their correct value once they have been fixed, repaired or replaced.


Taking On Too Much Responsibility

Sometimes the best ploy with a business is knowing when to let go and allow a third party to take the reigns. A major error that often occurs in the reverse logistics field is organisations deciding to take on too much of the logistically responsibility off their own accord. Unless there is the labour and warehouse space on hand to handle high volumes of returns, it should really be left to external outlets who can correctly manage repairs and reselling product to ensure that the stock is not entirely wasted. If there is a lack of resources or expertise within this department of the business, it is important that pride and ego doesn’t get in the way to make an informed decision.


Summary

The central lesson that should be learned with reverse logistics errors is not to dwell on them but take onboard the feedback and make proactive measures to address the matter. When organisations are on top of this department they will suddenly find opportunities to cut needless costs and maximise value with their product.