Success of any business depends to a large extent on the efficiency of the supply chain. According to the Council of Logistics Management, supply chain is “the process of planning, implementing and controlling the efficient, cost-effective flow of raw materials, in process inventory, finished goods and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.”
Reverse supply chain also called as the backward supply chain, is the process of moving goods from their final destination for the purpose of capturing value, or proper disposal. General example of reverse supply chain is the returning of soft drink bottles for reuse.
The process of the reverse supply chain involves the following steps:
Acquisition of products:
Retrieving the used product is the important step in RSCM. The quality, quantity, and timing of product returns need to be carefully managed because it may make the re manufacturing impossible if the company receives lot of returned products of variable quality. Companies often will need to work closely with retailers and other distributors to coordinate collection.
After collecting the products the next step is to transport them to facilities for inspection, sorting, and disposition and it depends on the type of the product reused. For example, bulky products like tires requires very different handling when compared to the pens. Companies should consider the costs and the perishability of the products to be reused.
Inspection and Disposition:
With use of sensors, bar codes, and other technologies the companies can easily test, sort, and grade the returned products. A business should make disposition decisions based on quality, product configuration or other variables. This eliminates many types of logistics costs and helps re manufactured products to market faster.
Companies can’t expect the timing and quality of the retuning products and this makes the reconditioning and re manufacturing processes more complex. Once the products are reconditioned, they are marketed as the new products.
Reverse supply chain process, lately is acquiring great importance in an organization. It is the best cost effective strategy.