Companies outsourcing reverse logistics is quickly becoming a new standard. Instead of relinquishing all controls, companies now have an opportunity to add-on reverse logistics management capabilities from within an existing transportation management system (TMS). As a result, the multi-trillion dollar problem of reverse logistics can finally be controlled. Of course, it always helps to understand a few things about the challenges and benefits of outsourcing reverse logistics.
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Challenges in Outsourcing Reverse Logistics Without Visibility
As the volume of returns has grown, the ability to maintain profitability and streamline reverse logistics have declined. More organizations are so focused on trying to fulfill more orders and stay competitive, especially considering the Amazon Effect, that spending extra time on reverse logistics just seems counterproductive. Moreover, companies do experience challenges in managing reverse logistics without the proper visibility capabilities, including:
- Inability to track and assess the real value of returned goods.
- Limited visibility into returns in brick-and-mortar stores and shipped returns.
- Growing demand for free return shipping and faster processing.
- Inability to maintain a consistent returns management process.
- Risks of managing returns that may involve personal or hygiene products.
- Trouble integrating reverse logistics companies’ data and systems within the TMS.
Now, consider how each challenge may be applied to a company outsourcing reverse logistics management. Staff pushback may arise from a perception of lost opportunities. Choosing a quality reverse logistics provider is yet another challenge. Fortunately, outsourcing can hold the solution—provided companies know what to look for in a quality provider.
Companies That Choose to Outsource Reverse Logistics Streamline All Operations
Take a moment to think about modern reverse logistics. They exist in every channel and must transcend all traditional channels. This is the idea behind omnichannel reverse logistics, and since it means casting a wider net for managing returns, streamlining as many processes as possible is essential. Furthermore, outsourcing companies know that the need for transparency in reverse logistics is absolute. So, the best partners will make tracking the full reverse process easier and integrated with existing systems. It all depends on the existing tech stack and whether it can handle another bolt-on system. Fortunately, most modern TMS platforms are built with this in mind.
The Strong Benefits Derived by Companies Outsourcing Reverse Logistics
Companies outsourcing can unlock significant benefits through outsourcing. These benefits are highly like the benefits of outsourcing forward logistics management as well. In fact, the top benefits realized through companies outsourcing the returns and reverse logistics processes include:
- Lower costs than managing reverse logistics in-house. It is important to understand that managing the reverse logistics activities includes labor, equipment, and shipping costs. It is not as simple as moving freight that’s been returned within a single facility.
- Data tracking to manage the product from cradle to grave and ensuring all returns are managed according to business policies. Another side to the benefits of outsourcing involves increased data tracking capabilities, promoting more visibility within the reverse logistics supply chain, and ensuring all returns follow policy.
- Improved access to repair and recycling centers for managing the reverse flow of items. Since reverse logistics includes a degree of replacement, repair, and recycling, having access to a wider network of repair and recycling centers for managing these goods is essential.
- Ability to respond to recalls faster and prevent cross-contamination of returned goods and new merchandise. In the current age, maintaining safe and pathogen-free supply chains is paramount. By separating the reverse and forward flow of logistics, companies can prevent cross-contamination and respond to recalls faster.
- SaaS-based reverse logistics modules that can be bolted onto, if not already included, to an existing TMS. Another opportunity to increase value in outsourcing reverse logistics lies within your leveraging software-as-a-service (SaaS) based platforms that already include reverse logistics management functions.
- Access to a single contact or touch point for managing reverse logistics. As reported by Business Wire, “for businesses to survive, it’s crucial to get the repeat business. Consumers look for hassle-free and easy processes when it comes to reverse logistics. By leveraging the services of reverse logistics companies, firms can easily provide their customers with a single point-of-contact for dealing with issues after the sale. This can boost the customer service level of companies.”
Using a Reverse Logistics-Capable TMS Is the Go-To Solution to Improve Efficiency in Returns and Add Brand Value
Applying a TMS that can handle companies outsourcing reverse logistics in returns management is a must-have in today’s world. Customers will not accept cumbersome returns management practices, and failures within reverse logistics will inevitably cost customers. Fortunately, reverse logistics-capable TMS platforms exist, including the Cerasis Rater. It’s time to bring logistics into the next era of outsourcing and efficiency with a proven platform that can handle both the forward and reverse logistics needs of brick-and-mortar locations, online order fulfillment centers, warehouses, and distribution centers.