Generally forward and reverse supply chains for a product are carried out by the different firms. When a firm controls the full process of forward and backward supply chain the result is called as a closed loop supply chain.
In closed loop supply chain process the manufacturer of the original products collects the used products from the customer or it can be done through indirect channels representing the original manufacturer's own field service force. Returns can be failed products or may be those purchased and returned simply. In this model, there are two reverse linkages, consumer to retailer and retailer to original manufacturer.
Closed loop systems helps the businesses to know the product failures and also decreases the costs. The close control and rapid recovery provided by a closed loop system allows minimum inventory for field support. Reducing inventory often produces additional benefits for firms like, it simplifies processes of retail and whole sale return which helps in reducing labor cost, reduces undesirable shrinkage and damage from returns, improves the database and visibility of products throughout their life cycle and increases the cash flow.
The benefits provided by the closed loop supply chain are:
In closed loop supply chain process the manufacturer of the original products collects the used products from the customer or it can be done through indirect channels representing the original manufacturer's own field service force. Returns can be failed products or may be those purchased and returned simply. In this model, there are two reverse linkages, consumer to retailer and retailer to original manufacturer.
Closed loop systems helps the businesses to know the product failures and also decreases the costs. The close control and rapid recovery provided by a closed loop system allows minimum inventory for field support. Reducing inventory often produces additional benefits for firms like, it simplifies processes of retail and whole sale return which helps in reducing labor cost, reduces undesirable shrinkage and damage from returns, improves the database and visibility of products throughout their life cycle and increases the cash flow.
The benefits provided by the closed loop supply chain are:
- It reduces the cost of returns, transportation, warehousing expenses and time including the partial or full elimination of small package shipments.
- Increases the value of the salvage merchandise.
- It captures vital information and reliability, maintainability, and dependability of products supported.
- Automating and fully controlling the total returns process.
1 comment:
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