In the sixth episode of our Snack-sized sustainability podcast, Wilf Stoddart discusses reverse logistics.
Tune in to hear what reverse logistics means, how it works and benefits for organisations.
Listen here or read on for an edited transcript.
Welcome to “Snack-sized sustainability”, part of our Simply Sustainability Podcast, brought to you by Clarasys. Each snippet will hear from a Clarasys sustainability expert discussing a key sustainability concept in less than five minutes. So grab a snack and get comfortable.
Today I will be talking you through the term reverse logistics. I will explain the term itself, how it works and its benefits.
But first, imagine you’ve bought a new phone, you’re loving it, and you’re using it every day. You keep it for a couple of years, but then slowly, slowly, the battery starts to get worse and worse. And after three or four years, you can’t make it through an entire day without the battery going flat and you have to constantly look for a charger. You want to look for a new phone and get the newest model, but you feel guilty. It’s expensive, and your old phone will just go to waste.
Well, nowadays you have the option where you can send back your phone and the company will give you money. You can then use that money to buy a refurbished, newer model. Your old phone will then have a new battery placed in it and sold to someone else. And so overall you feel good. The company feels good, the person buying your phone feels good, and most importantly, the planet feels good.
Reverse logistics enables this. It is a form of supply chain management that moves goods from the customer back to the retailer or manufacturer. If logistics means delivery, then reverse logistics means collection.
How does reverse logistics work in practice?
Well, first of all, the customer has to be able to say, “I want to return or drop off the item”. Then there needs to be a mechanism for actually doing that, whether that’s a drop-off point, a collection, delivery, post, et cetera. And once the manufacturer or retailer receives back the product, there’s now a decision to be made. Looking at the condition of that product and the capabilities they have, the product can either be resold, refurbished, remanufactured, or recycled. This allows materials and components and products to reenter the product lifecycle in a circular fashion.
Reverse logistics have been classically used for returns of unwanted or not functioning items, but now it helps a variety of business models. This may look like an online clothing brand offering rental services, cosmetic companies paying for the return of their bottles and containers, or as I mentioned before, phone companies offering discounts on products in exchange for old ones.
Benefits of reverse logistics
There are obvious benefits to this, such as decreasing material costs, improved brand sentiment, reduced waste, and lower environmental impact obviously. But there are additional benefits that are less obvious. For example, the reuse of materials means that components once viewed as waste now have value. That means the value of your product has inherently increased.
The risk on your supply chain is reduced as you have had multiple channels from which you’ve received parts and components. You have a second chance to interact with your customers, providing the opportunity for repeat sales or even upselling and getting to know them even better.
It also increases the efficiency of your own supply chain. As transport returning to your factories or facilities can now transport returned products as well. What’s more, as the government moves to introduce more policies on the sustainable practices of producers, reverse logistics will allow your organization to stay one step ahead.
All of these things are the benefits of implementing a circular economy within your business.
This is a topic we’ve discussed in a previous Snack-sized sustainability episode, which you can find on our website. We’re also working with the University of Exeter and large well-known brands on a research project looking at the intersection of customer experience and circular economy.
I think it’s some really exciting work, so definitely stay tuned.
Thank you for listening to Snack-sized sustainability. We hope you enjoyed it and learned something new. Please do let us know if there are any key sustainability concepts you’d like us to cover. We look forward to welcoming you back on our next episode.
