Reverse Logistics: Why is its Crucial in the Dairy Industry?

Reducing resource wastage is a crucial goal towards creating a greener supply chain. Reverse logistics reduce waste generated throughout the supply chain and promote manufacturing, refurbishing, recycling, and reuse

- Samarth Setia

When it comes to logistics in the food industry, the primary focus is often on transporting products from farms or factories to retailers. However, there is a crucial aspect that is often overlooked what happens to the shipping platforms and packaging materials that were used to transport these products, as well as any unsold items? 

The research conducted by Assocham and MRSS reveals that in India approximately 3% of its total milk production gets wasted each year. This wastage, combined with the increasing demand for dairy products, poses a significant threat to India's goal of producing 300 million tonnes of milk by 2024.

This is where reverse logistics comes in. Reverse logistics is a process that helps in optimizing operations and increasing value for their customers. It also ensures that materials are efficiently reused, unsold products are appropriately disposed of, and waste and environmental impact are minimized. Hence, it is very essential to understand the significance of the reverse supply chain in the dairy industry and how can it promote sustainability while ensuring food safety.

The Concept

Reverse logistics is the process of returning products from endusers through the supply chain to either the retailer or manufacturer. Whether a customer is returning unwanted items, the product has expired, or the product is damaged, an effective reverse logistics process can help reduce costs and, improve customer satisfaction.

Similarly, in the dairy industry, reverse logistics can help minimize waste and maximize value recovery. For example, a salesperson may dispose of a can of expired milk and not account for it while an undamaged pack of cheese may be re-packaged and sold at discount. With reverse supply chain management, dairy companies can beat this forgery and focus on proper handling, transportation, and disposal or refurbishing of the returned products.