The current year has been anything but ordinary. Supply chains are trying to fulfill more e-commerce orders, and out-of-stock SKUs have become almost expected. Meanwhile, the massive surge in demand continues to push forward another aspect of logistics—reverse logistics. Reverse logistics costs further contribute to higher total cost of ownership within the supply chain and lead to additional complexities in managing products. Supply chain leaders need to start thinking about how they will handle the coming surge of returns, the demands of peak season, and the next disruption. Why? The answer is obvious; demands show no sign of stopping. So, let’s kickstart the conversation with an in-depth view of how software-as-a-service (SaaS) platforms and SaaS-based reverse logistics transportation management system (TMS) trends can help.
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Challenges of Managing Reverse Freight With Legacy Systems
The challenges of managing reverse freight with legacy systems mirror the problems with limited visibility and flexibility within forward logistics. According to Mackenna Moralez of Supply & Demand Chain:
“Reverse logistics also plays a big role because the broken part will need to be returned for remanufacturing processes. Procurement and strategic sourcing are applied to make sure the best price is achieved, and data and analytics are utilized to make decisions and changes to optimize the vehicle and driver setup. Think about a telematics device, but instead of being used for route optimization, it’s optimizing for performance.”
Organizations need a way to capture, track, and enable transportation management optimization. That’s where SaaS-based reverse logistics can really make a difference.
SaaS-Based Reverse Logistics Offers Top Benefits to Increase Revenue Reclamation
Utilizing a SaaS-based reverse logistics platform offers top benefits to increase opportunities to recapture revenue, especially in the spare parts supply chain. A past study on reverse logistics optimization via SaaS, published by Supply Chain Brief, found remarkable ROI, including.
- Increased demand forecast accuracy improvements from near one-third to almost 99%.
- Decreased spare parts inventory by 52%, saving millions in revenue through reduced carrying costs, unused components and more.
- Reducing the total cycle time by 70% or more.
- Increasing the percentage of on-time same-day shipping for completed repairs.
While these gains may not seem like major changes due to the limited number of returns, it’s important to think about the customer service side of the conversation. Proper reverse logistics management amounts to happier customers, and depending on the product in question, healthier customers. How?
Consider this; health equipment repairs literally have life-saving uses. By repairing them, health facilities can devote more resources to improving patient care and keeping costs under control. In turn, customers are healthier and more likely to return for continuity of care. The same standard can be used to justify improved processes through SaaS-based reverse logistics capabilities. In addition, using SaaS platforms allows for unmatched scalability, evergreen software that grows and adapts to the changing needs of the business, and a single source of truth. Imagine the potential now, considering the full view of reverse logistics and traditional, forward logistics within a holistic transportation management system, such as the Cerasis Rater. That’s the big takeaway; unified TMS capabilities must include a strong focus on all reverse logistics processes, not just those that are involved in the sale of a new product.
Best Practices in Deploying SaaS Capabilities to Manage Reverse Logistics
Supply chain leaders that wish to deploy SaaS-based reverse logistics may be unsure of where to begin. Remember that any new software implementation will be difficult and may result in some resistance among employees. So, following these best practices can streamline implementation, avoid extra costs, and help prevent onset of resentment between staff and management:
- Use next-generation connectivity resources, i.e., application programming interfaces (APIs), to unify your tech stack.
- Benchmark organizational needs, provisioning system resources as necessary without losing control of costs.
- Leverage a hyperconverged architecture to identify and mitigate risks in real time.
- Take advantage of outsourced logistics service providers (LSPs) to process returns.
- Collect and analyze shared data from supply chain partners, including carriers, forwarders, brokers, 3PLs, or others.
- Use data to track and measure reverse logistics performance.
- Apply analytics-driven KPIs to hold carriers, shippers, and supply chain partners accountable within the TMS.
- Work with your staff to understand their needs and problems, as well as providing proper training for all new reverse logistics software, modules, or functions.
- Work with an expert consultancy service, such as the in-house guidance afforded to all GlobalTranz shipper and carrier clients.
Achieve Operational Excellence With SaaS-Based Reverse Logistics and a Winning TMS
The world is changing, and customer expectations will only continue to grow. Supply chain leaders need to leverage a SaaS-based reverse logistics platform that can compile data from within and outside of your organization as part of a TMS, such as the Cerasis Rater, to maximize value. Request a demo of how GlobalTranz can help your brand success in both inbound and outbound logistics.