Question #1
Why should companies be focused on the integration of their forward and reverse logistics chains?
Answer
Question #2
According to the authors Weeks, Gao, Alidaeec & Rana (2010) how does the strategy employed in
business affect the product route efficiency of reverse logistics and profitability?
Forward and Reverse Logistics Integration
Business organizations are optimizing their supply chain by enhancing the
efficiency of the process of taking products to the marketplace. However, reverse logistics is
becoming a significant component of logistics operations as it incorporates customer experience
in decision-making. Integrating reverse logistics is not only cost-effective for businesses, but it
also delivers tremendous added value to the customers’ overall experience of company brand if
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the returned product is smartly handled. Integrated supply chain plays a significant role regarding
product price and features, which enhance the brand image and fulfill customers’ expectations.
Integrating forward and reverse logistics is vital for businesses in enhancing performance and
customer satisfaction when it comes to product returns. Integrated logistics will provide strategic
solutions for forward and reverse logistics’ processes, and technology plays an essential role
regarding inbound and outbound logistics such as tracking and tracing products. Integration of
logistics ensures the channel’s efficiency and maintains customer service and determining
shipment time as well as optimizing profitability and route schedules (Kumar, Kumar, Brady,
Garza-Reyes & Simpson, 2017).
Integrated forward logistics and reverse logistics ensure a logistical flow of
products, especially products that customers returned for repair or replacement. It enhances
proper follow up towards customers and satisfying the increasing demands of customers as well
as making them more informed. Besides, the integrated system ensures that better use of
technologies and reverse logistics expertise ensuring improved services to customers as well as
gaining and retaining more customers. Thus, integrating forward and reverse logistics ensures
logistics managers have greater control of costs, march with competitors and create a competitive
advantage for the company. Therefore, the integrated logistic process offers customers closed-
loop solutions such as a sufficient flow of Internet sales, replacements, and repairs. Also, an
integrated reverse and forward logistics model results in reduced total costs such as fixed costs
for opening warehouses, transportation and variable costs for storing products in warehouses.
Besides reduced total costs, an integrated reverse and forward logistics tend to create a more
straightforward, efficient, profitable supply chain network. Therefore, integrated forward and
reverse logistics ensures the processes of controlling, planning and executing logistics activities
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are cost-effective and efficient from the point of production to consumption to the origin point in
order to ensure proper disposal and recapture value.
Product Route Efficiency of Reverse Logistics and Profitability
According to Weeks, Gao, Alidaeec and Rana (2010), “the strategy employed in
business affect the product route efficiency of reverse logistics and profitability.” According to
their study, it is evident that strategies employed by the business impact the reverse logistics
product route efficiency and profitability. This is because reverse logistics create competitive
advantages for firms in the intensely competitive business environment and therefore, companies
should adopt the best strategies that will ensure route efficiency and improved profitability.
Besides, logistics managers should view reverse logistics as a tactical move which can create
strategic advantages and improve overall competitiveness over long-term in the supply chain by
typically seeking to reduce costs and enhance efficiencies. Strategies adopted by business help
reverse logistics’ efficiency, which in turn leads to enhanced goodwill and customer satisfaction
through recapturing of value and proper product disposal. Thus, every strategic decision by
management should be geared towards reducing costs in reverse logistics as well as enhancing
route efficiency and increasing company profitability.
Besides, lack of adequate and formal policies or strategies inhibit the
effectiveness of reverse logistics. Therefore, reverse logistics success depends on establishing
creative solutions that enhance route efficiency and profitability. Logistics strategies should
create new opportunities that will enhance the process of corporate decision-making and create
competitive advantage. Strategies in logistics affect route efficiency and profitability
significantly because the routes determine shipment times, schedule’s efficiency, and levels of
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customer service. Besides, they also affect profitability by potentially optimizing route
schedules. Also, it incorporates information support in the area of product routing and
transportation. Strategies will also affect operations and how products are routed.
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References
Kumar, V. N. S. A., Kumar, V., Brady, M., Garza-Reyes, J. A., & Simpson, M. (2017).
Resolving forward-reverse logistics multi-period model using evolutionary
algorithms. International Journal of Production Economics, 183, 458-469.
Weeks, K., Gao, H., Alidaeec, B., & Rana, D. S. (2010). An empirical study of impacts of
production mix, product route efficiencies on operations performance and profitability: a
reverse logistics approach. International Journal of Production Research, 48(4), 1087-
1104.
