Supply Chain & Logistics
Supply Chain & Logistics

Developing Robust Supply Chain Software to Help Businesses Reduce Reverse Logistics Expenses

Written by Dave Wood and Seth Burger Posted February 6, 2015 by Carolina
Dave Wood

Dave Wood

Globalization has given way to a complex multi-modal infrastructure of supply chains. With the many links added to the chain, precious cargo runs a higher risk of being damaged. When the cargo is rejected or returned to the supplier they incur a charge when having to apply reverse logistics. To minimize the costs associated with that process suppliers need to employ robust supply chain visibility technology to increase efficiency and reduce harm to precious cargo.

Traceability helps entities efficiently track and monitor all events occurring within the supply chain. Errors can never be fully taken out of the equation, but using supply chain management and visibility technology reduces cargo damage and the costs associated with the reverse logistics by maintaining an efficient supply chain.

With tighter regulations and increasing costs of operations, refining the supply chain is of paramount importance. Although the primary focus of most manufacturers, suppliers, and distributers is to push product to retailers with forward logistics, a reverse logistics intelligence system will help refine the overall supply chain. Software providers must harness contemporary technology to offer entities a Supply Chain Management (SCM) analytics platform to reduce the amount of damaged, recalled, and rejected products. Clearwater International published a report estimating the SCM software market to be worth $13.4 billion by 2017, which represents a strong and growing software segment.

Producing a robust supply chain management software solution starts with providing the architecture for material requirements planning applications, manufacturing software, inventory and warehouse management systems, order processing, and shipping technology. The following lists are the core features the SCM software technology should employ for each link in the supply chain:

Manufacturing and Material Requirements Planning

  • Labor and material capacity requirements planning applications
  • Equipment allocation software
  • Database for supplier, vendor, and retailer information
  • Invoicing and billing presentment modules

Inventory Management

  • Integrate sales platforms with inventory management systems
  • Automation solutions for replenishing, tracking, expiration, and accounting
  • Inventory management solutions with the latest inventory control devices

Warehouse Management

  • Way-finding applications for dedicated and random storage solutions
  • Floor plan simulators to optimize storage space
  • Shipping and receiving management

Order Processing and Fulfillment

  • Aggregation applications to consolidate orders
  • Architecture for efficiently routing orders
  • Backorder management and returns modules
  • Automation solutions for picking, fulfillment, order accuracy, shipping and receiving, return put-away, plus inventory planning

Shipping and Logistics

  • Automation of shipping labels, packing slips, manifests, invoices, and order numbers
  • Tracking systems with RFID and GPS
  • Delivery confirmation and electronic signature capture modules
  • Product returns and reverse logistics

Supply Chain Software Tying these applications together using Radio Frequency Identification (RFID) and Global Positioning Systems (GPS) and integrating that hardware with the overarching Enterprise Resource Planning (ERP) Business Intelligence (BI) database is the best practice for ensuring that all. Radio Frequency Identification tags should be implemented at the initial stages of the supply chain sequence. RFID is microwave technology that is programmed to send pertinent data to the receiver when scanned. By using automated RFID data at shipping and receiving docks data will be uploaded to inherent databases in real time. The tracked data is used to ensure that shipments are on time and products were not harmed during transit. Integrating RFID technology with GPS furthers the scope of business intelligence systems.

Global positioning systems provide real time location based data by satellite. Not only can the GPS data be used in shipping fleet management, it can be used in conjunction with RFID data to give location and situational analyses. Pertinent information of where and when a phenomenon may have occurred to damaged cargo gives better visibility to the supply chain.

The underlying goal is to tie the aforementioned technology into a robust business intelligence and reporting module. When a product is returned by the customer or retailer for whatever reason, the supplier incurs an expense to set up reverse logistics. It will be advantageous to get batch reports generated off the database of all relevant information pertaining to the lot / product in question. Efficiently targeting the core problem is the first step in rectifying the error. Not only can future problems be avoided it optimizes the chain of supply.

Tracking and tracing individualized parts and products from manufacturer to customer is the best way to gain a complete insight into the supply chain dynamics. The ability to trace quality issues through all links of the supply chain protects consumers and brands to minimalize liabilities and reverse logistics cost. Using programmers with specific supply chain management industry knowledge is the best way to help software providers develop a fully functioning SCM software solution that will help companies make their supply chain more efficient, while simultaneously reducing the costs of reverse logistics.


 Chetu, Inc. does not affect the opinion of this article. Any mention of specific names for software, companies or individuals does not constitute an endorsement from either party unless otherwise specified. All case studies and blogs are written with the full cooperation, knowledge and participation of the individuals mentioned. This blog should not be construed as legal advice.

 Chetu's Supply Chain team implements solutions for the Supply Chain Industry. Chetu differentiates itself in providing industry specific expertise combined with its low cost, high productivity model. You can find more information about the portfolio of our Supply Chain experience at:

 Chetu was incorporated in 2000 and is headquartered in Florida. We deliver World-Class Software Development Solutions serving entrepreneurs to Fortune 500 clients. Our services include process and systems design, package implementation, custom development, business intelligence and reporting, systems integration, as well as testing, maintenance and support. Chetu's expertise spans across the entire IT spectrum.

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