Describe what a reverse supply chain is and why more attention as of late is being directed toward this area.

Question

What will be an ideal response?

Answer 1

Reverse supply chain is the process of capturing value from and/or properly disposing of merchandise returned by customers and/or stores.

Two reasons more attention is being directed toward reverse supply chain systems are the growth of sales through Internet channels and the increasing interest in environmental sustainability. First, the percentage of returned merchandise is much greater for purchases made through the Internet channel compared to the store channel. Because the percentage of merchandise returns bought through the Internet channel is as much as four times greater than for merchandise bought through the store channel, the growth in Internet sales is going to significantly increase the number of returns and the cost of processing them through the reverse supply chain system.

Second, the efficiency of reverse supply chain systems affects environmental sustainability because packaging and shipping materials are processed through the reverse logistics system. When retailers reduce transportation costs by consolidating shipments to stores, DCs, and FCs and optimize the disposal of returned merchandise, they reduce harmful emissions, energy usage, and their costs