Skip to main content
Back

Recovering Lost Profits by Improving Reverse Logistics for High-Tech Manufacturers

Executive Summary

It is no surprise that almost every company is looking for ways to increase sales, decrease costs and reduce risks. But in such tough economic times, the easy cuts have been made and all of the simple process improvements have been put in place. Enter reverse logistics, an often overlooked process that can help companies reduce waste and improve profits. 

Reverse logistics is defined as the processes of receiving returned components or products for the purpose of recapturing value or proper disposal. Reverse logistics processes and plans rely heavily on reversing the supply chain so that companies can correctly identify and categorize returned products for disposition, an area that offers many opportunities for additional revenue. It is much more than simply counting defective items returned by customers. Also, it is much more complex than outbound shipping in that customers and/or consumers initiate a return, making it an inbound shipment process that is less predictable. The science of reverse logistics includes return policy administration, product recall protocols, repairs processing, product repackaging, parts management, recycling, product disposition management, maximizing liquidation values and much more.

And yet reverse logistics seldom receive much attention — that is, until something goes wrong. Many executives go out of their way to avoid dealing with returns because it can be ugly and is thought of as nothing more than a cost of doing business. What many fail to realize is that the average manufacturer will spend 9% to 15% of total revenue on returns, according to a 2010 Aberdeen Group study. They are often unaware of the impact returns management can have on their customers, their resources or their bottom line. In fact, improving reverse logistics can help a company increase revenue up to 5% of total sales.

If ignored, critical reverse logistics functions can cost companies millions in lost profits due to damaged customer relationships and external liabilities that could have an enormous impact on their business. Effectively managed, however, reverse logistics can enable organizations to find hidden profits, improve customer satisfaction and minimize liabilities.  

Download the White Paper

Article Highlights

  • Reverse logistics is the process of recapturing the value of returned products or properly disposing of them
  • Improving reverse logistics can help increase revenue up to 5% of total sales

Visit UPS on Facebook

Visit UPS on Facebook
Orlando tractor-trailer driver Ginny Odom just celebrated 40 accident free years... 10:00 AM Oct 23rd Read Full Post
Visit UPS on Facebook
Sometimes a simple package becomes a special memory. Visit http://bit.ly/UPSmemo... 3:00 PM Oct 21st Read Full Post
Visit UPS on Facebook
Have you always dreamed of visiting Napa Valley in the fall? Well, here's a chan... 4:00 PM Oct 20th Read Full Post

Follow UPS on Twitter

Follow UPS on Twitter
RT @Inc: Mark your calendars! Register for a free video chat 10/29 @12pm ET with the @Refinery29 founders http://t.co/oHbWdMhV1e (Sponsored… 8:50 PM Oct 23rd Reply RT
Follow UPS on Twitter
#UPSjobs RT @MoeBaddourah: JOB alert! @UPS to hire 370 people in Columbia area for holiday rush. #sctweets http://t.co/ObM2BqsN5f 8:46 PM Oct 23rd Reply RT
Follow UPS on Twitter
@HITshrink Steven, +26% healthcare logistic execs say they’ll outsource their SC vs 2013. What do you think? http://t.co/BbWNLEGcOy 8:00 PM Oct 23rd Reply RT

Subscribe to Email

Please send me UPS email containing video, whitepapers and webinars on ways to use logistics to help businesses grow and compete.

Subscribe