You might have been hearing more buzz around reverse logistics and wondering just what are the differences between forward and reverse logistics.
First, forward logistics are those that fall into the traditional definition of logistics. But those traditional logistics processes don’t include the logistics of handling returned goods. Those are reverse logistics.
How Forward and Reverse Logistics Differ
We don’t have space here to go into the details of each different type of logistics. Every business is different and their logistics are different too. In fact, if your supply chain management system doesn’t include reverse logistics, it might be best to begin with an overall view of the concepts before getting into the details.
- Forward Logistics are used to manage the forward movement of goods from raw materials to the consumer. Value is added to the product as it passes through each step along its route to the end user.
Forward logistics become more divergent the further away they are from raw materials. In other words, while raw materials can sometimes only be found in a rare few places in the world, end products must get into the homes or places of business of every customer.
Customer demand dictates the rate of forward logistics and inventory is kept at each stage to manage variances in that demand.
- Reverse Logistics are those used to manage the ‘reverse’ movement of goods, from the end user to the manufacturer, or even back into raw materials through recycling. Reverse logistics must be convergent, collecting used product from many points and transporting them back to one or more manufacturing locations.
The speed of reverse logistics is entirely based on supply. Many product returns can make them busier and faster, but a lack of product returns can make the logistics stop entirely.
The value of a product going through reverse logistics declines at each stage as costs rise due to the added materials handling requirements.
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