How The Mismanagement of Reverse Logistics Affects a Business

woman checking an inventory

Manufacturing and commercial experts have all risen up the ranks of their business in the knowledge that the management of reverse logistics given by Pendulum Logistics is paramount to success.

This is a domain where companies can prepare and plan for items to return the other way and recycle or repurpose them for additional use.

From computers and IT technology to plastics, metals, woodworks, power tools, chemicals, paintings, windows and anything of use for a resident or commercial client, having a sound framework to work through this process is fundamental.

Yet it is rarely discussed how much of an impact oversight can have in this realm, seeing companies chase their tale and fail to grasp the negative spiral of events that occur from mismanagement.

Let us explain what those events will look like.

Slows Down Production Process

A backlog of production that arises from poor reverse logistics practices will see the entire system slow to a halt. When items have to be fixed or assessed under warranty, expert practitioners have to divert their attention away from the next program and ensure their customers have an investment that is protected. The essential goal of a manufacturer or developer is to maximise and optimise resources so that a business is doing more with less. When there is a production process that is filled with returns and inquiries, that is when attention becomes diverted and the company grinds to a stop.

Illustrates Poor Business Planning and Leadership

It takes leadership and foresight to be successfully managing reverse logistics. When there is a void of those characteristics, damage will inevitably occur and that will impact the standing of the company, the level of investment from corporate partners and the money flowing in from consumers. Poor leadership and vision speaks to a toxic workplace culture where oversight is part and parcel of a regular week, allowing individuals to make errors without consequences and failing to institute sound practice. That will ultimately be the downfall of any organisation.

Higher Carbon Footprint

Reverse logistics management will see companies bring back the woods, plastics, metals, digital equipment and glass before recycling them for additional use. When that system falters and fails to function correctly, more resources are needed to fix the problem and that ultimately increases the carbon footprint of an organisation. It will be felt in the short-term on the balance sheet, but poor environmental practice reflects poorly on the company and puts an added strain on the local environment.

Spiraling Costs

Nothing impacts a business like a balance sheet that is spiraling into the red. The poor management of reverse logistics sees extra costs thrown in and that will eventually become an unsustainable practice. That will be due to the increase in production to account for lost, damaged or compromised stock and the increase in the use of couriers and transport systems to fix the original mistake.

Loss of Customers

Customer satisfaction can be gauged through a number of categories, from customer service to the quality of the item and the durability of the purchase, it is a subjective exercise at its core. For those businesses who struggle to get on top of their reverse logistics responsibilities, they will see their brand reputation hampered beyond repair. The word will quickly spread that the organisation is not fit to handle returns and repairs as a lack of transport infrastructure or warehouse diligence breaks down the entire system. Consumers vote with their feet and their money, and when an enterprise sees this issue escalate to an unmanageable position, they will walk away to a brand that is on top of their game.