Mexico as a “Reverse Logistics Hub” in North America

There is a term that is not known to many people, except if you are in the logistics business, this term is “Reverse Logistics”. What is reverse logistics? The normal logistic or forward logistics of any product goes from row materials, to components, and finally to assembly. Check the graphic below.

 

Well, reverse logistics is the system by, for different section of the value chain, the inventory, defective, or scrap can be reuse, remanufactured or disposed properly. Reverse logistic goes from the very consumer to the fist raw materials manufacturer.

Nevertheless, the term is relatively new, such activity were around or performed already by some industries. Reverse logistics had been around in some industries for the past 100 years, but it is recognized that the term “Reverse Logistics” was first coined by James R. Stock in 1992. That is why it seems new for many people. Before 1992, there were terms such as Repair, Recycling, Reclamation, Salvage and Reuse to name the action by which some industries recapture products that did not fit the value chain.

Now, why I comment now about this term or activity? Well the reason is that, with the advancements of the e-commerce there are more activity for reverse logistics in much more industries than before. Think about the millions of garments, shoes, electronics, and many other products been sold through internet these days, and then think what happened if you decide not to use it, or the product was not the one you wanted? Then you give it back and goes to a reverse logistics system that the seller has in place.

The issue here is that form most of the products the forward logistics and production systems are very automated, but on the reverse way, the activity requires more human labor. Humans to inspect, evaluate, check, decide how to repair, clean, repack, etc. Then there is the issue of how the product will be back into the market as salvage, repaired, overhauled or clean & repack item.

This activity is labor intense and, for the case of North American, there is one country that can provide the labor cost necessary to make this reverse logistics possible and achievable, Mexico!

ONILOG has the knowledge, Mexican permits, and professional people to perform this activity in a timely manner, with cost advantage to make your reverse logistics system a success story.

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