Forward logistics, or the forward supply chain, is all about getting the product to market. In contrast, reverse logistics, or the aftermarket supply chain, is inclusive of events that move the product at least one step back in the supply chain. That is, reverse logistics is inclusive of activities that move goods from the consumer to the distributor or the manufacturer, and is inclusive of operations related to the reuse of products and materials.
The direction in which the product is moving matters. Companies that attempt to employ the same strategy for their reverse logistics process as they do for their forward logistics process do so at their peril.
The forward supply chain has its challenges. The forward supply chain has risks and it has surprises. However, the forward supply chain is more predictable and more certain than the aftermarket supply chain.
There is a greater level of uncertainty and predictability in reverse logistics. Because of this, when it comes to reverse logistics, flexibility needs to be a key component of your strategy.
Specifically, in forward logistics the product itself, the quality of the product, and the volume of the product are known and are relatively easy to forecast. Likewise, rules and regulations are fairly straightforward and uniform, and the value of the product is known.
When it comes to reverse logistics there are many unknowns. The product, the volume of the product, the quality of the product, and the value of the product are difficult to forecast. Rules, regulations, and restrictions are constantly evolving and vary by state, country and region. Moreover, the visibility and speed at which it is necessary for the aftermarket supply chain to move is vastly different than that of the forward supply chain.
It is important to remember that when it comes to the supply chain one size does not fit all. Incorporating flexibility into your aftermarket supply chain strategy is essential to your success.
Kate Lee is Director of Research and Strategy for Fronetics Strategic Advisors