Businesses worldwide are trying their best to streamline the supply chain order, but the order becomes a challenge in reverse logistics. The reverse logistics is chaotic and complex because it defies the normal flow of products. Reverse logistics entails the backflow of products from the customer to the supplier, and it becomes challenging for the company to foresee the cost of returns. In forwarding logistics, the cost of supplying is covered by the profits made but in returns, the cost is compensated by the company. Since the products originate from the various points to a common point, high handling and transportation cost are incurred because the routes are not clear compared to the forward logistics.
The quality of goods is inconsistent, and the damage differs with every product; therefore, the product’s packaging becomes a challenge. The uniformity of the product when they are being returned to the supplier and the handling of the products poses another challenge. Once the products reach the supplier, with the sorting and reconfirmation, reverse logistics inventory is difficult to manage and follow for returned products.
In reverse logistics, product attractiveness and value diminish once it is returned to the supplier. The returned products have to go through a turn of refurbishing depending on the level of damage caused. The businesses have to face market difficulties on prices since the returned goods have to be sold at lower than the market price (Royaleinternational, 2021). Therefore, the business suffers an extra loss of the commodity given that it refunds the customer for the product they paid for. It is more challenging since the customer loses faith in the supplier and the product they are supplying. Therefore, giving priority to reverse logistics could help ease the challenges faced.
Reference
Reverse logistics: Why returns create challenges? (2021). Royal International. Web.