Reverse logistics isn’t a new concept, yet it’s often overlooked by small and midsized companies due to cost and complexity. We’ve discussed the high level benefits of reverse logistics before and wanted to revisit the topic from a post-pandemic perspective. The world has changed dramatically over the last few years with regards to buyer behavior, new types of companies entering the supply chain, shifting customer expectations, and the tools to support this new economy.
First, let’s level set with a common definition for reverse logistics. The Reverse Logistics Association (RLA) defines it as all activity associated with a product/service after the point of sale. While this is a broad definition, it’s a good starting point. This means reverse logistics touches fulfillment, warehouse, customer support and operational teams that get involved after the sale has been made. With the current challenges in the global supply chain, providing a seamless customer experience post-sale has become more difficult for physical products.
With additional complexity in global supply chains and consumer habits, many companies choose to simply eat the cost of a returned item or are forced to credit cancelled orders. What is the financial impact of poor reverse logistics on companies? The staggering number below shows a huge jump in losses from $350B to $550B in the US from 2017 to 2020, according to Statista. This number will likely increase significantly after the 2021 holiday season is finished, given the dramatic changes to supply chains and consumer behavior.
How Cloud Technology Empowers Reverse Logistics
As a business leader, what is a prudent strategy for better reverse logistics? Clearly there is a massive financial incentive over the competition for companies that take a better approach. One opportunity, especially for companies still on legacy software systems or using Excel spreadsheets to manage inventory, is to adopt cloud technology for better customer relationship management (CRM) and enterprise resource planning (ERP) in a single system. Utilizing cloud-based CRM and ERP in unison gives business leaders the ability to track inventory in real time, across the supply chain, and provides better insights for customer support interactions.
Who provides such a solution? That’s where we come in. Ascent Solutions is a team of distribution and manufacturing technology enthusiasts that made the decision 15 years ago to build a leading ERP system natively on the Salesforce platform. We help customers of all sizes reap the benefits of CRM and ERP in a single source of truth system for more effective order management, inventory control, demand planning, warehouse management and reverse logistics, which we call Operations 360 on Salesforce.
Benefits of Cloud Technology to Improve Reverse Logistics
- Single Source of Truth. A single cloud ERP + CRM system connects the front office with the back office for increased visibility into supply chain bottlenecks and potential shipping/fulfillment issues for customer orders.
- Real Time Visibility. The ability to quickly locate inventory is critical for successful reverse logistics. Cloud technology enables companies to track serialized and non-serialized products down to the truck and palette locations.
- Data Driven Customer Support. Customer service reps (CSRs) are also able to see inventory location and bottlenecks in real time, which enables them to more effectively communicate order statuses that can potentially save a poor customer experience and returned order.
Ultimately, reverse logistics is critical because it maintains an efficient flow of goods. The process reduces costs, creates value, decreases risk and completes the product life cycle.