Any manufacturer appreciates forward logistics in their supply chain as it indicates the growth of the company. Equally, any manufacturer will be discouraged when goods are returned from customers for repairs, replacements, or whatever reason. Nevertheless, companies need to understand that reverse logistics occur, so part of running a business involves ways of dealing with logistics in a cost-effective and efficient manner.
All the activities of a manufacturer after the product has reached the consumer are reverse logistics and include the reusing of your product, correct disposal methods, and value of expired goods. But, how do you measure the amount of returned goods and their flow into the chain supply? Below are four important metrics to consider:
In a company with multiple products, you need to look whether the product returns are the same. You also need to look at the volume of returned goods. ReverseLogix notes that a large volume of the same type of goods indicates that you could be dealing with a bigger problem. Having a reverse logistics software will give you real-time updates and insights into these products.
You could be making huge loses in your company’s market potential value when you do not manage the reverse logistics well. Proper monitoring and utilizing of product failures is a great way to turn failed products into profits.
Percentage of Sales
Sales are among the things that any manufacturer seeks to keep a record to track the profits of the company. You should then determine the percentage of the product returns from the total sales.
The State of Returned Goods
What is the reason for the product returns? Can you notice any trend in the returning of goods? Returned goods allow you to detect what the problem, minimize errors, and improve quality assurance. Correcting the problems minimizes chances of product returns in future.
Many companies will consider the shipping and delivery of their product to a customer as the end of their supply chain. In some instances, a company could receive goods from the consumer. A reverse logistics system is essential for dealing with reverse logistics.