This is the first of a two-part series on reverse logistics. We’ll start with the supply chain that begins when products come back, then look at a less obvious question: what if you could decide where a return should go before it even starts moving?

The Supply Chain Nobody Talks About

You order a pair of shoes online, wait a few days for them to arrive, try them on and discover that, despite what the size chart promised, your feet have apparently chosen a different path in life.

So you put the shoes back in the box, attach the return label and hand the parcel to a carrier.

From your perspective, that’s probably the end of the story.

From the retailer’s perspective, it’s the beginning of another logistics process.

The shoes now have to be collected, transported, received and inspected. Then someone has to decide what happens next. Maybe they go straight back into inventory. Maybe they need a repair. Maybe they are better suited to resale through another channel. Maybe they cannot be recovered at all.

There is a name for this part of the supply chain: reverse logistics.

Logistics, in reverse

The basic idea is simple. Traditional logistics moves products toward the customer. Reverse logistics deals with what happens when products start moving back.

That can mean a customer return, but it can also mean a recalled product going back to a manufacturer, a used device being collected for refurbishment, or materials being sent for recycling.

So while the direction changes, the logistics questions remain familiar: Where is the product? Where does it need to go? How should it get there?

The complication is that the destination is often less obvious than it was on the way out.

One product, several possible journeys

Take that pair of shoes again.

When the retailer sends them to you, the journey is relatively predictable. The product has a known SKU, a known destination and, ideally, a known condition.

When the shoes come back, there are suddenly several possibilities.

They could be perfectly resalable. They could have been worn. They could have a minor defect. They might need cleaning or repair. They might be better sold through another channel.

The product is the same SKU, but its next journey depends on what happened to it after it left the warehouse.

That is one of the fundamental differences between forward and reverse logistics: the return journey often has to be figured out as it happens.

Returns are only part of the story

It is easy to think of reverse logistics as simply “dealing with returns.”

But products can move backwards through a supply chain for all sorts of reasons.

A manufacturer might recall a product. A retailer might send excess or damaged inventory back to a supplier. A customer might return an electronic device for refurbishment. A used product might be collected for resale or recycling.

The common thread is that a product is no longer following its original path toward a customer. The supply chain has to decide where it belongs next.

And that decision matters.

In Europe, around 40% of all items of clothing bought online is returned, according to the European Environment Agency. The organization also notes that return processes can involve several locations and take weeks, which can affect the chances of reselling returned products.

So the box arriving back at the warehouse is not really the end of the journey.

It is a new logistics problem.

The part we don’t see

Most of us only see the visible parts of logistics. A parcel arrives at the door. A return gets picked up. Maybe a refund appears in the bank account a few days later.

The less visible part is everything in between.

Products are sorted, inspected, repaired, restocked, resold, recycled or sometimes discarded. Decisions are made about where products should go and what they are still worth.

That is why reverse logistics is more than simply moving products in the opposite direction.

It is about managing what happens after the original sale.

And as products are increasingly expected to have a second, third or even fourth life, that part of the supply chain is becoming harder to ignore.

The question hiding inside the return

The interesting part is that the decision about a product’s next destination often comes quite late in the process.

A product arrives somewhere. Someone looks at it. Only then can they determine what should happen next.

But what if that decision could happen earlier?

What if you could know what to do with a return before the product starts moving?

That would change more than the return process itself. It could change the journey the product takes, the time it spends waiting and, ultimately, the value that can be recovered from it.

And that is where reverse logistics starts to become an information problem as much as a transportation problem.

In the next Log, we’ll look at what happens when you know more about a return before it arrives.