The importance of reverse logistics for retail activity

Abstract

Reverse logistics (RL) refers to a set of programs or competencies aimed at moving products in the reverse direction in the supply chain (i.e., from consumer to producer). It entails more than the mere re-use of containers and the recycling of packaging materials. It is the process of moving a product from the point of consumption to another point for the purpose of recapturing the remaining value, or for the eventual proper disposal of the product. The state of development of RL is analogous to that of inbound logistics between 10 and 20 years ago. The scope of RL has, since, expanded from service parts management to include other areas and has attracted significant attention of a great majority of companies. The reverse logistics process can generate periodic negative cash flows that are difficult to predict and account for, but are important when managing retailer liquidity. Uncertainties surrounding reverse logistics create the possibility that the retailer may be strained in meeting short-run financial obligations or opportunities.reverse logistics, retail activity, product recovery, network design, liquidity