Supply chain leaders have faced significant challenges in the past, and in 2020, the supply chain coronavirus crisis has put a spotlight on the need for supply chain resilience and integration. Among these, integrated reverse logistics strategies can make or break successful operations. Failure to consider the ways in which the disruption affects all parts of the supply chain will lead to delays and added costs. Fortunately, supply chain leaders can take several key actions to address these issues and improve the reverse supply chain.
The ability to collect data is almost more important than analyzing it in the logistics space. Everything produces data in the modern world. However, not all supply chains have the capacity or resources to aggregate the massive stores of data available. Of course, more data amounts to increased visibility and therefore, actionability, to prevent disruptions from contributing to higher freight spend. As also reported by Accenture, “To help leaders use insights to respond with confidence, companies should use a logistics control tower to get a real-time view of operations. This will require integrating logistics market information (e.g. truck border crossing times), inventory levels, demand forecasts, and capacity constraints, both internally (e.g. warehouses) and externally, (e.g. carriers and suppliers) to support better and faster decision making. At this point, companies are going for scale rather than scope. It is better to focus on a core set of end-to-end global priorities than get distracted by trying to implement sophisticated functionality in each locality.”
Having this level of access to real-time data can also dramatically improve supply chain performance by keeping all parties informed. Instead of hoping a shipment arrives in time, shippers and carriers, as well as logistics service providers, can work together to plan accordingly.
Comparable to the need to real-time data access, supply chain leaders need to know their current freight spend and its driving forces. Obviously, disruptions are a major factor. But the driving forces of higher freight spend may include increased consumer demands, pressure for faster turnaround time on repairs, and more transparent processes. Remember that customers expect businesses to maintain social and environmental responsibility. As a result, the reverse supply chain needs to consider what happens to products after the interaction with the customer ends. Gathering real-time data goes a long way in building the basic processes to ensure this transparency. Of course, shippers that can quantify the costs of reverse logistics and explain why returns are not necessarily free can go a long way in reducing total costs and encouraging customers to think twice before purchasing a product that may result in a return due to buyer’s remorse.
As companies look to increase accountability and service levels in the reverse supply chain, integrating systems, as part of wholesome reverse logistics strategies, with customer-facing systems and reports will grow in value. Furthermore, the ability to deploy technology to seamlessly share data will help maintain control and transparency in reverse logistics costs. The deployment of technology, particularly those using automation to capture rates and tender freight intuitively, as well as balance spot freight sway, must always trace back to seamless data sharing and increasing visibility.
As companies have grown and moved to proactive management strategies, reverse logistics strategies’ role in trade compliance have grown simpler. Companies are working with out-of-the-box system providers, which leverage a software-as-a-service (SaaS) payment model to reduce total costs. As explained by Eric Johnson of JOC.com, these advancements allow shippers and carriers to manage logistics and compliance needs from a centralized platform. By leveraging the software as a service subscription model, total costs for software development, maintenance, and use are generally lower. At the same time, third-party-based SaaS providers provide an immeasurable level of scalability to an organization. Since the software is built and maintained by a third-party, an organization has a lower cost for managing reverse logistics. In turn, customers are more likely to enjoy the benefits of free returns and low-cost repairs. Meanwhile, the compliance issue remains top of mind for everyone, and using a dedicated system to handle everything eliminates concerns over record-keeping. When time arrives to conduct an audit to ensure that an organization is following appropriate compliance protocols, centralized data storage makes everything accessible and easy to handle.
There are literally dozens of potential technologies that could be added to this discussion. Artificial intelligence, machine learning, Bluetooth, radio frequency identification tags, analytics, and virtually any other system that can connect could improve reverse logistics strategic value. Instead of focusing on that aspect, supply chain leaders should think about the top three commonalities. These include gaining access to real-time data, understanding the current reverse logistics strategies’ impact on freight spend, and the value of connected, third-party SaaS platforms.
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