Integration of Forward and Reverse
Value Chains
Moving Forward in Reverse…
by Jeroen Weers
The business of logistics has its origins rooted in the armed forces: where troops needed to be pushed forward to enemy lines,
the arms, equipment and provisions needed to follow. The mobilisation of these troops and their supplies were a forward
logistics operation, unless you were on the losing side and needed to reverse your manoeuvre. To undertake logistics studies on
this would not demonstrate a lot of faith on the military strength of your army, so it was a subject often sidelined in army
strategies.
The same could be said for the 20th century approach to logistics. Large product manufacturers focussed entirely on optimising
forward logistics, studying how best to push products into the marketplace as efficiently as possible. Because manufacturers
believed in the product, they did not expect to see many of them return, so Reverse Logistics became the stepchild of many
business logistics operations.
For the last decade, however, companies have started to realise that Reverse Logistics is an important part of the logistical
chain. Not only can it be extremely cost effective for businesses, it also delivers tremendous added value to the customer’s
overall experience of a brand or company if a product return is handled well. And herein lies the key to establishing a
professional reverse logistics, or returns service.
Today’s customers are very demanding. We all know this. With the help of the internet, people know what the market has to
offer in terms of price and product features. While price plays an important role in what product a customer is likely to buy, the
customer will also be equally observant of the product’s brand image. It needs to suit their identity and anticipation. A product’s
brand image, carefully constructed with the help of many marketing dollars, should therefore match with the customer’s
expectations.
A customer willing to pay premium price for a product that will heighten his status or image, will also expect premium service.
In this light, the after sales service, of which reverse logistics is a key part, becomes a vital component for businesses large and
small, wherever they are based across the world.
The power of the internet and people’s shopping habits have only served to make the point more evident. Comparing and
purchasing products on line is as normal as going to the stores for a purchase. Internet sales are increasing exponentially every
year and now count for more than 10% of worldwide sales. When a product is bought on the internet, returning the product to
the store is not an option. Here mail solutions play an important role. Goods are sent to the customer via parcel mail, and if the
customer wants to return it, they will do that via the mail as well.
But what if the purchase is done on a foreign website? How would you return the product then?
Businesses that think ahead outsource their logistics to companies who can provide one international mail solution for the
forward logistics as well as the reverse logistics process. The product is sent via international parcel mail. Within the shipment,
information is included about what a customer should do if something needs to be returned – either via a receiver pays or sender
pays return label. All the information regarding the outbound and inbound logistics (fully track & traceable) is gathered in one
IT system.
It might also be the case that a customer needs to return a faulty product for repair or replacement. This means that the repaired
or replacement product needs to be forwarded to a customer again. In this case, an IT system that provides the information of
the inbound and outbound shipment is essential for a good follow up towards the customer and to close the case, once the issue
has been resolved.
Customers are getting more demanding and better informed. Maybe it’s time you thought about making better use of the
technologies and reverse logistics experts who will enable you to better serve and inform your customers and win their hearts
and minds. Integrate your forward and reverse logistics value chain, take greater control of your costs, and steal a march on your
competitors today.
Jeroen Weers is Development Manager RML for Spring Global Mail. Spring Global Mail is the world’s largest independent
mail company and has more than 10 years’ experience in reverse logistics. Combining Parcel solutions for forwarding goods
and Spring’s innovative Reversed Mail Logistics solutions, Spring Global Mail is able to offer its customers a closed loop
solution for e.g. internet sales and repair / replacement flows. www.springglobalmail.com/returns