Research & Trends: Reverse Logistics: Shipping Goods Upstream

By Sean Alexander and Lee Holman, IHL

To the uninitiated, "reverse logistics" sounds like one of the myriad of buzzwords that had its origin in the boom period of retail supply chain technology investment in the late 1990s. While the term itself might have come into greater use during that time, the fact is that some forms of reverse logistics have been around for decades; we just called them something different. Case in point, remanufactured auto parts are a $100B business in the United States, and that industry got its start during WWII. Currently, some 90% to 95% of replacement automobile starters are remanufactured. The process starts with a consumer removing their defective starter. They then go to the local auto parts retailer, purchase a remanufactured starter, and offer the starter they removed as a core exchange. The retailer then sends the core exchange to a remanufacturer, where it is refurbished to like-new condition, ready for sale once again. In a very real sense, reverse logistics is the movement of goods in the exactly opposite intended direction through the supply chain, a salmon swimming upstream, so to speak.

Used with permission from Integrated Solutions For Retailers magazine.