Many supply chains stop measuring success once the product is delivered. While this is sometimes an accurate measure of customer satisfaction and profit, one key metric is missing – reverse logistics. Reverse logistics is the process of bringing a product that has reached the market place and is then returned back to the manufacturing company either for refurbishment or for an attempt to salvage parts. For example, a manufacturer’s product moves through the traditional supply chain network, ultimately reaching the customer. If the product needs to be returned for any reason, the customer would return it. The product would travel in reverse through the supply chain network, and the manufacturer would have to organize the shipping in addition to any necessary testing, dismantling, repairing, recycling, or disposing of the product. The logistics for all of these activities is referred to as reverse logistics.

It can be very costly to have the personnel, facilities, and processes in place to properly oversee reverse logistics programs so many OEMs turn to a contract manufacturer, like RiverSide Integrated Solutions (RIS), for reverse logistics management. At RIS, we know the role of reverse logistics has become even more important in recent years with the continued growth of e-commerce. Over time, physical retailers have been replaced with online ones, resulting in rapid growth in the magnitude of returns and pressuring supply chains to manage product returns successfully. Companies can no longer afford to treat reverse logistics as “the cost of doing business” – there is too much at stake in terms of brand reputation and profitability, not to mention the unnecessary headaches that occur throughout the supply chain when reverse logistics is not optimized.

The good news is that streamlining the way products move back through your supply chain results in huge benefits such as cost reductions, happier customers, and less environmental waste – making your company stand out from the competition. Also, as detailed below, the value of implementing a reverse logistics strategy far outweighs the implementation cost.

· Decreased Costs and Increased Asset Utilization: the reason reverse logistics is so important to companies is the cost benefits associated with it. We all know inventory costs money, and manufacturers should always have the goal “to do more with less”. Minimizing product return, repair and replacement times reduces the inventory requirements, thus, decreasing the capital tied up in inventory. An optimized reverse logistics solution also has the benefit of increasing asset utilization by extending the product’s life via repair or recycling, allowing manufacturers to extract even more value from the product. Additionally, there are often other cost reductions as a result of a strong reverse logistics system such as transportation, shipping, administration, and technical support expenses.

· Greater Customer Satisfaction and Higher Retention: simply put, happy customers are return customers. If a customer has a bad experience with a product, you must make it right. Efficiently repairing or replacing products can directly affect how customers feel about your brand. Also, as on-line purchases continue to grow, customers are expecting returns that are convenient and hassle-free. Having a strong, customer-oriented reverse logistics process says “we go the extra mile”. Effectively managing return orders could be the difference between a one-time customer and a returning one; thus, having a successful reverse logistics system impacts revenue. It is crucial to invest in reverse logistics processes that help maintain high customer satisfaction levels.

· Less Environmental Impact: how many of your products are disposed of improperly? Companies continue to take steps to reduce their environmental footprint, and it has never been more important to implement supply chain programs that are environmentally sustainable. One part of the business with ample opportunity for environmental gains is reverse logistics. Reverse logistics can help you identify ways to reuse, resell or recycle materials that would otherwise end up in a landfill – a win-win solution for the environment and your company’s reputation.

· Supply Chain Transparency: just like any other part of the supply chain, reverse logistics needs transparent monitoring in place to identify issues and take action proactively. OEMs must know why returns are happening – without this knowledge it will be impossible to reduce the volume of returns and optimize the reverse logistics process. Once OEMs have established traditional forward logistics as well as reverse logistics processes in place, supply chain operations will be significantly more transparent across the entire network. This benefit allows you to track logistics performance across the life cycle of a product and better identify opportunities for improvement – adding value across your supply chain. Without this transparency, it is impossible to fully oversee and holistically manage your supply chain operations.

In addition to satisfying the customer’s needs that were not initially met, it is very important for the manufacturer to recapture the value of the returned product. In order for reverse logistics processes to operate smoothly, strict procedures must be in place to handle things like returns management, warranty claims management, return merchandise authorization, and any remanufacturing, reconditioning, or refurbishing activities.

The biggest issues our customers face is having a team and department set up to handle these returns and support in an efficient manner. Since many companies do not have the personnel and resources available to oversee a reverse logistics program, small and even mid-sized OEMs often outsource reverse logistics to contract manufacturers, like RIS, to recapture product value efficiently. Not only do they get top-notch technical and logistical personnel to handle their reverse logistics, but these companies also gain peace of mind, allowing them to focus on product improvements, customer service, and new product launches. At RIS, our refurbishment solutions include:

· Diagnostic testing
· Warranty claims management
· Circuit board component troubleshooting and replacement
· OEM replacement parts procurement

Additionally, the professionals at RIS that specialize in various aspects of the reverse logistics process such as:

• Mechanical Assemblies
• Electronic Assemblies
• Electromechanical Assemblies
• Hydroelectric Assemblies
• Box Builds
• Systems Integration

RIS is an advanced contract manufacturer providing robust solutions in circuit board assembly, product assembly, kitting, supply chain management, fulfillment, distribution, and reverse logistics. We employ more than 300 people and provide services to OEM’s across the world. We operate 3 state-of-the-art manufacturing facilities within the U.S, and as your one-stop-shop we have the capabilities, capacity, quality assurance standards, and resources to provide you with support for all of your manufacturing needs.

With all of the choices in contract manufacturers out there, we know it can be difficult to find someone that not only understands your business model but also has your best intentions in mind. RIS has proven to always be a win-win focused relationship. As your one-stop-shop, we have the capabilities, capacity, quality assurance standards, and resources to provide you with support for all of your manufacturing needs. We understand that supply chain management is difficult and very time consuming, so we urge our customers to utilize us in the fullest capacity. Our total-package solutions include:

· Extensive supply-chain network

· Purchasing and inventory management

· Dedicated Program Manager

· Warehousing and drop-shipping capabilities

· Flexible order fulfillment

· Product assembly: sub-assembly and full product

· Scalability to meet your needs

Contact us today at (507) 523-3220 to see how we can help with your manufacturing project, or click here for a quote.