Logistics is a world of jargon and complicated terms. Forward and reverse logistics are two sides of the same coin that often seems to trouble the uninitiated. Reverse logistics has become an important aspect of the E-commerce trend to maximize customer satisfaction and also, at the same time, promote recycling.
Forward logistics is more straightforward. The forward movement of product from point A to B. Forward logistics doesn’t involve the transit of returned goods from the customer back to the merchant. So let’s take an in-depth look at what the distinction is between forward and reverse logistics.
What is Forward Logistics?
As mentioned above, it is the forward movement of the product from point A to B. In this movement, there are different cycles. Sometimes point A and B mean the movement of raw materials to the manufacturer, and then they change from manufacturer to merchant, and then finally merchant to the end customer. There are different types of forwarding logistics in supply chain operations. These services include direct order fulfilments, hub services, shipping, and pick & pack services.
Each step of the way in a forward logistics cycle, the value of the product increases. The farther away the product is from the raw material, the more its value also increases. Businesses try to maximize their profit margins by tightening up the chain and closing in on the distance between the raw material and the end customer. Sometimes the raw material is found rarely but has a market everywhere in the world. Those items end up being expensive.
What is Reverse Logistics?
Reverse logistics, as it sounds, does the reverse of what forward logistics does. It is the movement of product from the end consumer to the point of origin. The point of the backward travel of the product is proper disposal, recycling for remanufacturing, or simply refurbishing a defective product. The speed of reverse logistics is directly correlated to the rate of supply.
A good reverse logistics process in place makes the entire chain busier, faster, and cost-effective. A lack of good reverse logistics at home can hurt your company too. It has the opposite effect, as it makes the chain bogged down and costlier since there is a waste of recycling.
When it comes to reverse logistics, it is very different from establishing regular forward logistics. Few challenges need to be addressed. So let’s look at some key talking points regarding the difference between forward and reverse logistics.
Forecasting: The Company controls the flow of products and in a forward logistics process. It is easy to forecast the movement of products when all the decisions are in your hands. But in reverse logistics, you depend on your scattered list of customers to make those decisions.
Packaging Quality: In forward logistics, you care about the packaging and do it in bulk for all products. Your packaging process is standardized and passes quality and durability tests. Whereas in reverse logistics, your customers package it themselves without much regard for the product because they don’t own it anymore.
Reverse Destinations: The flow is easier to control once a big shipment scatters every step of the way. In reverse logistics, you have to deal with the opposite of that by gathering all the products from a scattered customer base and get it to one location. It gives you a lot more pieces to manage, making it a hassle.
Inventory Management: Reverse logistics face a lot of trouble when it comes to managing the inventory of gathered products. They have a lower value, and the pricing is unknown. Sometimes they also come in condition to be refurbished. It is very difficult to stock products effectively.
All these factors and more make reverse logistics a very different but necessary part of an operation. In general, supply chain management has a lot of ebbs and flows, which can be a mouthful for companies just looking to get better at their business. Working with a Third-Party Logistics company such as ARK India is a safe bet in such a case. We have services for supply chain management solutions to help you reach your customers on time and efficiently!