The importance of reverse logistics for retail activity
Author:Preparator univ. drd. Mihaela Moise
JEL:D30, L80, Q27, Q56
DOI:
Keywords:reverse logistics, retail activity, product recovery, network design, liquidity
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.