Reverse Logistics Challenges During The Pandemic (Research Paper Sample)

Introduction
The Covid-19 pandemic caused significant disruptions on the global supply chains because today’s supply chain systems are highly globalized and interconnected. For instance, American firms rely heavily on outsourced production outlets in far flung locations such as China to sustain their supply chains. When the pandemic struck, most countries imposed far reaching containment measures, including lockdowns and reduced working hours. These measures had the impact of slowing down or completely halting the global supply chain systems. According to a 2021 report by Ernst & Young LLP that was based on the experiences of nearly 200 senior-level supply chain managers, just a paltry 2% of firms around the globe were prepared for the impact of the pandemic on global supply chains while 57% of the firms reported having been adversely affected by supply chain disruptions during the pandemic (Harapko 2021). In some instances, reverse logistics were rendered impossible due to unavailability of transportation and shipping agents who were diverted to transport essential medical supplies and humanitarian aid needed in the most pandemic stricken countries. The experiences of most global firms during the pandemic suggested the need to adopt technologies and techniques to prepare for disruptive events rather than avoid them because such disruptions are inevitable in an interdependent and highly interconnected global supply chain environment. One of the proposed mechanisms to adapt global businesses to supply chain disruptions experienced during the pandemic is the use of diverse reverse logistics techniques to proactively respond to the bullwhip effects of increased or sustained demand in the face of slowed or highly disrupted production processes.
Reverse Logistics Challenges During the Pandemic
Reverse logistics concerns planning, control and implementation of efficient and cost effective movement of products or materials from the end consumer backwards to the manufacturer, producer or supplier with aim recapturing value. It involves monitoring the life cycle of a company’s products after they have been delivered to the end consumer to establish how the expired products can be reused to create value. In most instances, supply chains are impacted directly by the reverse logistics involving return of delivered products from the end consumer. The return of goods already delivered to the end consumer can be highly challenging in a stalled or highly disrupted supply chain as was the case during the Covid-19 pandemic (Sanjoy, Kumar, et al 316). The main challenges experienced during the pandemic included slowed shipping of the returned products, slowed or lack of quality testing for returned products along the supply chain to identify and fix the error, problems with documentation due to unavailability of relevant personnel and the slowed operations relating to dissembling recycling or repairing of the returned items to restock the products.
The immediate impact of Covid-19 on global supply chain systems was to cause a major shift of shoppers from the physical stores to the digital e-commerce platforms, leading to an increase in e-commerce shipments to diverse retail customers across the globe. The shift to the e-commerce platforms presented unique challenges to customers who wished to return unwanted purchases to the manufacturers in the absence of third party logistics agencies. While most businesses shifted to e-Commerce sustain their supply chain operations during the pandemic, its disruptive effects on planning, distributions and operations in nearly all industries presented serious reverse logistic challenges (Patale and Zohair). Key among these included increased costs associated with returns management against constrained budgets. A shift to e-commerce during the pandemic requires businesses to invest in new technologies, new product handling facilities and complex transportation models. Increased e-Commerce purchasers presented an increased returns or unwanted purchases nightmare as customers increasingly purchased products without the opportunity to physically inspect them. Secondly, the disruptive nature of the pandemic meant halted returns or returns made after the expiry of the time allowed for the returns. Yet in other instances, reverse logistics was hampered by the unavailability of return to vendor channels due to operational and financial constraints.
Notably, most companies were not prepared for the pandemic and had their usual budgets highly constrained. Secondly, lockdowns and movement restrictions in leading production centers such as China disrupted the global transportation routes, adversely impacting forward and reverse logistics. Additionally, the closure of physical stores exerted immense pressure on the global e-commerce coupled with insurmountable demand on data centers as customers across the globe directed all their orders to the online vendors. As regards reverse logistics, the increased number of online orders have led to a corresponding increase in the number of returned orders. As the crisis pandemic heightened, some returned orders could not be delivered as products were quarantined to minimize exposure to the virus. The stringent product handling and safety protocols equally created major challenges in sustaining the global supply chain system by slowing down processing and delivery of orders hence the bullwhip effect. To continue operations in against these challenges, companies around the globe had to adopt new approaches of processing and transporting orders during the pandemic.
Businesses across various industries have also had to grapple with broader challenges such as some partners in the supply chain falling into bankruptcy, which completely disrupts reverse logistics and at times makes it impossible for customers to return unwanted purchases. Besides, many industries experienced massive layoffs, disintegration of supply chain networks and difficulties in sustaining mutual relationships that are necessary to support reverse logistics and robust supply chains. Thus most industries have struggled with restructuring their supply chains and sustaining the requisite vertical integration for reverse logistics. Overall, industries were unable to sustain reverse logistics due to sudden closure of operations by supply chain partners and inadequate preparedness to sustain operations during the pandemic. Additionally, prolonged lockdowns in major production centers implied difficulties in adjusting the production capacity to meet the recovering demand due to the bullwhip effect after the pandemic. These coupled with prolonged demand disruptions and slowed reconfiguration of supply chain processes have compounded the challenges associated with reverse logistics.
Reverse Logistics Techniques and Strategies to Reduce the Impact of Supply Chain Disruptions due to Covid-19 Pandemic
The challenges posed to business organizations due to disruptions occasioned by the Covid-19 pandemic can be mitigated through proactive planning and effective execution of the supply chain plans. To respond effectively to the increased product returns occasioned by the bullwhip effect occasioned by the Covid-19 pandemic would be to create strategic plans that are responsive to the varying demand situations. This may come in the form of contingency plans rather than relying on the usual operational or supply chain management plans. Through contingency plans, an organization adjusts the capacity to handle returned orders on a day to day basis (Ivanov and Das). Part of the response strategy is to work with existing partners on the e-commerce space to create trust and ensure faster processing of the returning orders. New partners can also be avoided because unlike the old partners, they may lack the requisite experience at handling the returned orders. Some of the proactive strategies that companies could adopt to minimize the impact of these disruptions include:
Digital and Industry 4.0 Vigilance
The adverse effects of Covid-19 disruptions on supply chain systems across various industries emanated from an apparent lack of technological readiness to respond and mitigate the disruptions. Advanced digital technologies such as additive manufacturing, blockchain and artificial intelligence have not been fully integrated into the supply chain systems across diverse industries. Proactively integrating these technologies into the supply network would enable high-end traceability, ensure robust forecasting of demand and ensure efficient returns management hence eliminating the uncertainties experienced during the pandemic. Most companies introduced digital manufacturing and distribution networks during the pandemic to accurately predict demand, produce optimally and minimize return orders and ensure robust and more resilient supply chains.
On demand manufacturing and accurate prediction of customer needs and preferences is equally an effective way of managing reverse logistics risks and configuring available organization resources to respond appropriately to the unforeseen consequences of the pandemic on supply chain systems. Besides, information-driven supply chains aimed at making the supply chain a closely integrated system bringing together the supplies of raw materials or parts, the transporters and the customer to increase customer fulfillment and reduce wastage associated with reverse logistics. Digital supply chain networks of the future will eliminate excessive production by introducing visibility into the diverse needs and challenges at every phase of the system by generating signals instantaneous demand signals. This has proved quite helpful during the pandemic where for instance, a supplier in the United States needs to keep up with increasing demand while the production ...