Most warehouse and distribution operations have focused on improving order fulfillment cycle times and synchronizing operations with their supply chain partners, with nearly the same myopic attitude: get the product out of the door. This is not a problem until the point that something that was shipped out comes back; only then do the failures in managing the reverse flow begin to reveal themselves.

Because many businesses see the entire concept of Reverse Logistics as cumbersome and unmanageable, they choose to outsource the 'problem' instead of managing it. As a result, an entire industry has developed to process returns. The Reverse Logistics Executive Council, or RLEC, was borne of the rise of this industry, and is regarded as a key source of information for companies that are in the RL business. It begs the question: If someone can turn your cost-center into a profit center, then why aren't you doing it yourselves?

All warehousing and distribution centers are naturally part of the B2B and B2C models. Additionally they are part of someone else's B2B model. Proper understanding of material and data flow within this model is the key to successful Reverse Logistics Management.

Materials come back from downstream customers (B2B and B2C) as either expected or unexpected. Downstream customers may call in prior to sending product back to obtain an RMA; or, they may return the product unauthorized. An upstream supplier might also initiate a reverse movement of material, such as a product recall. In this case, it is the DC that must contact the downstream customer.

As with all warehouse functions, Reverse Logistics Management depends on the proper management of relevant data: shipments, customers, inventory, item characteristics. With control of critical information, warehouse and distribution center management can quickly deploy their associates for tasks such as picking, packing, shipping. Where many operations struggle, however, is in the handling of material that is returned to the facility. DCs are generally not prepared or equipped to manage materials that are returned from downstream customers.