Reverse logistics practices and organizational factors

This is an excerpt of the original article. It was written for the May-June 2018 edition of Supply Chain Management Review. The full article is available to current subscribers.

May-June 2018

Last month, I was in Atlanta at the Modex trade show. In one sense, it is a tribute to the automation technologies managing today’s distribution networks. And, I’m not only talking about automated materials handling systems, but also the software and NextGen technologies such as robotics, wearable technologies, including smart glasses and augmented reality solutions and sensors enabling the Internet of Things. In another sense, all of these solutions are coming together to drive fulfillment. With the increase in e-commerce, getting the right product to the right customer at the right time has never been more important.

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For many organizations, reverse logistics provides a way to quickly and efficiently obtain returned products for repair, disposal, recycling or refurbishment. For that reason, it is in an organization’s best interest to conduct reverse logistics as efficiently as possible to keep customers satisfied and occupy minimal resources.

Data from APQC’s Open Standards Benchmarking in logistics indicates that a majority of organizations (over 82%) have implemented a returns management process as part of their logistics activities. Nearly half of organizations have implemented formal returns management extensively; what’s more, many have determined that it makes more sense to outsource returns management than to execute the process in house.

Accordingly, APQC has found that most organizations (about 75%) in our survey have implemented the use of third-party logistics (3PL) providers or other external agencies to manage their returns. However, the degree to which organizations use 3PLs varies. About 41% of organizations use 3PLs to some extent, and one-third of organizations use them extensively.

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