• Sales quota setting procedure-

MEANING OF SALES QUOTAS

Sales quota is the estimated or predetermined volume or valueof sales expected to be achieved by the sales
force over a given period of time. "Sales quotas are sales assignments or goals, they are management
expectations in dollars or units for a specific future period."
What is a Sales Quota?
A sales quota refers to the financial goal (often time-bound) that an individual sales rep, sales team or even
region must reach in any given specific period, usually one month or quarter. Sales quotas are set mainly by
sales leaders and are measured in numerous ways, such as profit, sales or activities. Overall, the better the
sales quota attainment, the better the performance bonus for the rep or team.

• types of sales quota,

6 Types of Sales Quotas That Help Sales Teams Win MORE Deals
1. Revenue Sales Quota
One of the most common sales quota types is based on revenue. The revenue sales quota expects sales
reps to sell enough products or services to earn a specific amount of revenue for that given period. Smaller
companies often set this type of sales quota for the month or quarter, whereas larger companies with longer
sales cycles will set annual revenue sales quotas.
Overall, revenue sales quotas can refer to net revenue, especially in cases where prices are flexible and
upselling is typical or expected. On the offset, while this is a simple type of sales quota, you can customise it
to suit the needs of your company and sales team. However, if your company’s products have a range of
different profit margins, you might use profit quotas instead of focusing on revenue quotas. That’s because
profit quotas incentivise reps to spend time selling items that yield a higher profit.
2. Volume Quota
Volume sales quotas are often set for sales teams to achieve over a year. More so, depending on the nature
of the business, managers may decide to break the volume quota down into regions, products, or sometimes
by the sales professional. This type of sales quota helps incentivise reps to achieve a specific goal whilst also
holding the entire sales team accountable for good attainment.
3. Profit-Based Quota
A profit-based sales quota encourages sales reps to earn a certain amount of revenue by selling a certain
amount of products or services. As a result, this type of sales quota works well for companies with several
target markets and price points to consider.
4. Combination Quota
Exactly as it sounds, combination quotas are just that – a combination of different sales quotas. That’s
because some sales professionals may have more than one quota. For instance, a typical combination quota
may include an activity quota, profit quota and volume quota. As a result, the type of sales quota set-up
provides sales reps with small, achievable milestones alongside a sales roadmap for success – making them
more likely to attain their quota
5. Forecast Quota
A forecast quota is based on the number of sales that sales territories or teams need to achieve in any given
period. Forecast quotas companies decipher the influences on their revenues, where they come from and
how these affect the company. Overall, a forecast quota is calculated based on the historical performance
and the revenue goal it must reach.
6. Activity Quota
Activity sales quotas are based on a sales rep’s sales activity and include activities that are part of the sales
process but not directly responsible for translating into sales. For example, you could task your sales reps to
make a certain number of calls or book a certain number of meetings per month or quarter.
• methods of setting quota.

Methods for setting sales quotas

✓ Quotas based on forecasts and potentials.

✓ Quotas based on past experience.

✓ Quotas based on executive judgments.

✓ Quotas based on salespeople’s estimates.

✓ Quotas related to compensation.

1. Quotas based on forecasts & potentials/ territory potential

For the large organizations, the most common method for setting
quotas is the use of sales forecasts plus market and territory
potentials.
The procedure used includes:-
Firstly, estimate the marketing potential/industry sales forecast for a product line (cosmetic items) for a
geographical area. Secondly, estimate the multiple factor index for each sales territory. (i.e, population and
buying power). Thirdly, the expected industry sales in each territory is obtained by multiplying the industry
sales forecast by multiple factor index. Finally, the company’s estimated market share in the territory is
considered out of the territory market potential in order to come up with sales volume quota for the territory.

2. Quotas based on past experience

Some companies consider past sales only for setting sales volume quotas. They take the past year’s sales
for each geographic units, add an arbitrary percentage, and use the results as their sales volume quotas. On
the other hand, few companies take an average of previous three or five years’ sales of each territory, add a
percentage by which the market is expected to grow, and
thus set sales quota for each territory.

3. Quotas based on executive judgment

Executive judgment is useful for setting quotas when company is new, the product and territories are new or
little market information exists. In these situations the management and executives estimate the total sales
for the coming year by their experience and judgment.

4. Quotas based on salespeople’s estimates

In these situations, companies usually ask their own salespeople to set quotas for one or two years. It is
rarely happened because salespeople either overestimate their abilities to set very high sales quotas, or set
too low sales
quotas to earn high commissions or incentives. They are de-motivated when there set quotas are not
achieved.

5. Quotas related to compensation

Often salespeople are either promoted or not promoted within a company based on their meeting quota.
Quotas represent the bottom line for a salesperson. For promotion, salespeople are usually judged on their
attaining quotas over time. It is also very common to earn extra compensation by reaching sales volume
quotas for total sales, existing products, and new products.

For example: a salesperson may be paid a salary plus a bonus of 1 to 10 percent on all sales over quota.
Typically, the quota for this situation is based on the past year’s sales. If the sales volume was Rs. 500,000
the salesperson would be paid a percentage of all sales over the Rs. 5,00,000, quota.

• Sales audit- steps, procedure.

 Sales Organization Audit
• Comprehensive, systematic, diagnostic and prescriptive tool.
• Assesses the a firm’s sales management process
• Provides direction for improved performance and prescription for needed changes.
• Should be performed regularly,
• Should be conducted by someone from outside the sales organization.
Although it is an expensive and time-consuming process, the sales organization audit generates benefits that
usually outweigh the costs.

What is a sales audit?

A sales audit is an analysis of a company's sales tactics and history. Sales audits help companies consider
their current state so they can make better sales and business strategies. This process includes both sales
and marketing teams and can help professionals understand the company's strengths and weaknesses.
Typically, auditors perform this procedure, though it's possible for sales or marketing managers to complete
an internal sales audit.

Sales audits provide an overview of a company's sales tactics, tools, efforts, inventory and objectives.
Understanding these aspects can help sales professionals reconsider their methods to adopt more efficient
and effective practices. This can help managers within the sales department make more realistic sales goals
and boost company profits.

Who conducts sales audits?

Sales auditors often conduct sales audits. These professionals can be internal employees of the company
for which they're conducting the audit or work on a consultant basis. Sales auditors use their expertise to
suggest ways for the company to improve its practices. To conduct the audit, sale audits may review financial
documents, interview employees, observe sales operations and discover existing sales goals. This
information helps them complete a thorough audit and accurate representation of the company's current
sales process.

How to conduct a sales audit

1. Examine the company's sales practices
Identify the sales practices a company uses, including their sales process, which is a series of steps they
guide a customer through in order to encourage a purchase. To determine if the sales process is effective,
it's helpful to collect data about leads and sales the company makes currently with the process. If the
company's sales team is meeting sales goals, the sales process is likely effective. If the sales team isn't
meeting the sales they project with the sales process, you can analyze further to find any weaknesses or
inefficiencies within the stages of the sales process.

2. Take an inventory of marketing and sales tools

Sales tools help automate routine tasks that the sales team may perform, such as measuring the number of
leads that a landing page helps to acquire. It's helpful to make an inventory of all the marketing and sales
tools the company is using because this helps assess where you can optimize the sales process. For
example, if the sales team is manually scheduling social media posts rather than using a tool to manage the
schedule of their posts, this may be an area for optimization.

Taking an inventory may also help identify overlap, where tools are being used to perform the same tasks.
Choosing the more efficient tool to perform these tasks can preserve the marketing and sales budget.

3. Evaluate the quality of the company's current sales leads

A sales lead is a consumer who shows an interest in a company or its products. Nurturing these leads helps
the sales team to make sales. When you evaluate the quality of the company's current sales leads, consider
factors such as target audience, a form of engagement and customer history. Ideally, a sales lead matches
the target audience demographics closely and engages with the company by signing up for a mailing list or
requesting more information .
A lead that exhibits these behaviors may be more likely to make a purchase from the company than another
lead that doesn't match the target audience and engages only through social media posts. When evaluating
sales leads, it's also important to examine how the marketing and sales teams handle leads and how they
interact with consumers. You may advise practices that build trust and relationships with consumers to
increase sales and the effectiveness of the company sales process.
4. Study sales reports and data
Studying sales reports and data helps gain a better understanding of how this data influences sales decisions.
Determine how the sales team uses the sales reports to make decisions and guide future sales content. The
data may show how the sales and marketing teams measure success and how they use the data to repeat
success.

If it appears the data isn't useful to the team, you may consider changing the metrics to measure success
and gather sales information. Here are common metrics to use for sales reporting:

o Number of sales
o Customer acquisition
o Return on investment
o Average revenue per customer
o Customer retention
o Lead generation

5. Consider sales efficacy and customer service

During a sales audit, it's necessary to examine the collaboration between the sales team and other
departments within the company to ensure that employees are working toward the same goals. The
relationships between sales representatives and customers are also important to examine to ensure that the
company is providing excellent customer service. Good relationships with customers contribute to higher
rates of retention and an increase in sales. Maintaining customer relationships can also help develop
personalized content and products for customers.

6. Create a report
Create a report of all of your findings from the audit. This provides documentation for the sales and marketing
managers to assess their team and process and helps develop strategies to improve sales for the company.
The report may include your own suggestions for how to optimize the sales process, improve the quality of
leads and increase efficiency on the sales team. Try to remain objective in your reporting and provide a
detailed list of the sales data and discoveries you make during the audit.

• Sales person performance analysis (essay question).

Being a sales professional is often very stressful, as there are high demands to meet sales quotas. After all,
if salespeople don’t make their numbers, it not only impacts their goals, but the financial needs of the
companies. Because of this, there is tremendous pressure placed on hitting their sales.
But even though sales numbers are hugely important, they’re not the only way to evaluate the success of
your sales team. If you’re trying to identify which salespeople on your team are the top performers and which
ones might need to make a career change, it’s important to know how to look beyond the immediate numbers
and develop a more nuanced way to evaluate sales reps’ performance.
Final sales numbers are often the most attention-getting stats for sales managers, but there are a lot of other
elements that go into creating those final numbers.
Here are 5 ways you can evaluate sales reps more fairly and effectively and look at the whole picture of what
they bring to your team:
1. Measure process, not just final results

It might sound counterintuitive in such a results-driven business, but more sales teams need to focus on the
overall sales process, and not just the final results. You need to have a “sales funnel” in place that guides
your prospective customers through each stage of the buyer’s decision-making along the entire customer
journey, including these touchpoints:

• The first contact or initial inbound inquiry

• The earliest discussion to assess the customer’s needs

• More detailed relationship-building conversations and discussions about the potential ROI of the
customer buying your solution

• The final sales closing

You should evaluate your reps not only on how well they close deals, but on how well they work through each
stage of the sales process. You might discover that some of your best closers struggle with the early stages
of making a sale, and that some of your salespeople with lower conversion rates in the final stages are great
at qualifying sales leads initially.
Measuring the overall performance of your reps throughout the sales process will help you identify people’s
individual strengths and help your sales team get better as a whole. Unfortunately, many sales teams
currently do not have a consistent sales process in place–according to stats cited by HubSpot, 68% of B2B
organizations have not identified their sales funnel.
2. Promote good prospectors

Most salespeople hate prospecting. They hate making cold calls, and they hate making those first uncertain
steps on the road toward finally closing a sale. This reluctance means that there is an opportunity to find the
salespeople who actually enjoy prospecting and who are good at it, and make prospecting a niche role within
your sales team.
Perhaps you’ve got salespeople who struggle with closing sales or building longer-term relationships, but
who have the right energy level and relentless ability to keep getting on the phone and introducing themselves
to new prospects. Find a way to reward your salespeople who do the parts of the job that most salespeople
don’t want to do.
3. Reward training

Many sales managers believe in the 80-20 rule—the idea that 80% of your sales results come from the top
20% of your sales reps. If this 80-20 rule is true for your organization, it can be tempting to just let your top
sales reps keep doing their own thing and keep selling and selling—but this can be a mistake. Instead of
evaluating your top sales reps based only on their sales numbers, try to capitalize further on their success by
asking them to create best practices and training opportunities that can be shared with the rest of the team.
The best players in sports don’t just rack up great statistics for themselves; they find a way to make other
people on the team get better. It’s the same for sales. Enlist the support of your best salespeople in training
the rest of the team. Find out what they do so well, and replicate that success—and make sure your top sales
people understand that training is part of their job performance evaluation.
4. Recognize teamwork

Is your sales team truly a “team” or just an assortment of individuals? Good sales teams should have a spirit
of friendly competition, but everyone needs to understand that the real competition is outside the organization.
They’re ultimately not competing against each other—they’re helping each other compete against your
company’s competitors. Look for ways to reward sales reps that exhibit and promote good teamwork, whether
that means filling in for someone on a client meeting, or helping a teammate close a big deal.
5. Think about the next deal

We talk a lot about building relationships with potential customers, but what does it really mean? Making a
sale is huge, but what about when it comes time to renew or upgrade? And are your customers likely to refer
you to someone else?
Another important part of the sale is how your customer feels about it afterward. Aggressive salespeople who
will do anything to close the deal can be a huge asset to your team, but if they over promise or disappear
after the sale, it can leave customers unsatisfied. Tracking and monitoring your progress by
repeating customer satisfaction ratings six or 12 months after the sale can be another great way to tell
whether your team is building successful long-term relationships—or just padding short term numbers.

• E-mail commerce and M- commerce.

Ecommerce email marketing is an effective marketing strategy that uses email to promote products of an
online store to existing or potential customers. Emails are one of the most popular means of digital
communication, and that's the main reason why using them for marketing activities can be extremely effective
What is m-commerce?
M-commerce (mobile commerce) is the buying and selling of goods and services through wireless handheld
devices such as smartphones and tablets. M-commerce is a form of e-commerce that enables users to
access online shopping platforms without the use of a desktop computer.

• Intermediaries function

Channel Intermediaries: Definition

How does a consumer go about purchasing a product? Do they knock on the door of the producer? Most
products are purchased from channel intermediaries, whose main purpose is to deliver product from the
manufacturers to the end users. The purpose of a channel intermediary is to move products to consumers,
whether business or consumer. Some intermediaries take title, or ownership, of the product from the
producer. This means that they can set the price and control the final method of sale. This would be an
example of a retailer.
When Ninja Corp first decided to launch their product line, they had to determine which channel
intermediaries they would need to effectively reach their target market. This lesson discusses physical
distribution through the channel intermediaries.

• vertical, horizontal, hybrid, channel conflict, channel management.

Definition: Channel conflict can be explained as any dispute, difference or discord arising between two or
more channel partners, where one partner’s activities or operations affect the business, sales, profitability,
market share or similar goal accomplishment of the other channel partner.
As we know that every manufacturing company needs to plan its distribution and marketing
channel appropriately, to ensure market captivity and customer satisfaction along with growth and
profitability.
In the process of the constant supply of products in the market, several channel partners and intermediaries
join the supply chain of the brand. Any clash and disturbance among these trading partners can be
considered as a channel conflict.
Types of Channel Conflict

The channel conflict can be classified majorly into the following four categories depending upon its flow and
the parties involved:
1 Vertical Level Conflict

In the vertical level conflict, the channel partner belonging to a higher level enters into a dispute with the
channel member of a lower level or vice-versa.

For instance, channel conflict between dealers and retailers or wholesalers and retailers.

2 Horizontal Level Conflict

The conflict among the channel partners belonging to the same level, i.e., issues between two or more
stockists or retailers of different territories, on the grounds of pricing or manufacturer’s biases, is termed as
horizontal level conflict.

3 Inter-type Channel Conflict

These type of conflicts commonly arise in scrambled merchandising, where the large retailers go out of their
way to enter a product line different from their usual product range, to challenge the small and concentrated
retailers.

4 Multi-channel Level Conflict

When the manufacturer uses multiple channels for selling the products, it may face multi-channel level conflict
where the channel partners involved in a particular distribution channel encounters an issue with the other
channel.

Conflict Magnitude

The level to which the conflict is considered critical or needs the attention of the channel leader, i.e.,
manufacturer, is known as its magnitude.

The magnitude of conflict can be determined through the proper analysis of the change in market share and
the company’s sales volume in a particular area or region.

Causes of Channel Conflict

What are the reasons responsible for a channel conflict?

Following are some of the key reasons for which the organizations need to face channel conflict:
o Role Ambiguity: The uncertain act of an intermediary in a multi-channel arrangement may lead to
disturbance in the channel of distribution and cause conflict among the intermediaries.

o Incompatible Goals: When the manufacturer and the intermediaries do not share the same objectives,
both work in different directions to meet their ends, this results in channel conflict.

o Marketing or Strategic Mis-Alignment: Sometimes, two-channel partners promote the manufacturer’s

product in a different manner, which created two different images of the same product in the consumers’
mindset, which creates conflicting brand perception.

o Difference in Market Perception: The manufacturer’s understanding of the potential market and
penetration into a specific region or territory, may vary from the perception of the intermediaries, which
can create conflict and reduce the intermediary’s interest in capturing that particular market.

o Change Resistant: When the channel leader plans to modify the distribution channel, the intermediaries
may or may not accept this change. Thus, it may result in a condition of discord or non-cooperation.

o Improper Geographic or Demographic Distribution: If the sales territory has a narrow consumer base,
and the channel leader allows many selling partners, they tend to lose interest soon because of low profit
and limited sales.

Consequences of Channel Conflict

Now that we know about the causes of such conflicts, we must also understand how dangerous these may
prove to be for an organization.

Given below are some of these outcomes:

o Price Wars: Due to channel conflict, the partners compete with each other on the grounds of price, and
therefore, the consumer may defer the purchase searching for the best deal.
o Customer Dissatisfaction: If there exists a channel conflict, then the distributors or retailers may show
much interest in the company’s products and resist to assist the consumers, which results into their
resentment towards the brand.
o Sales Deterioration: Conflicts can adversely affect the sales of the products due to the decline in
distributors’ interest and an increasing number of consumers shifting to competitors’ products.
o Distributors Exit: For the manufacturers, it is essential to retain the distributors or partners to increase
product sales. When there is a channel conflict, the chances of various distributors leaving the channel
increases.
o Poor Public Relations: The unsatisfied distributors may negatively publicize the brand and its products
as a result of manufacturer’s unhealthy public relations with them.
Channel Conflict Management

It is a universal fact that the conflicts cannot be eliminated, though these can be handled smartly to reduce
its negative impact on business.

Following are some of the ways to manage the channel conflicts:

Mediation, Arbitration and Diplomacy

To resolve a dispute, the manufacturer can adopt the strategy of intervention where a third person intervenes
to create harmony. The other option is arbitration, where an arbitrator listens to the argument of the parties
involved in a conflict and declares a decision. Or, the parties can resort to diplomacy where the
representatives of both the parties conversate and find a solution.

Co-optation

The manufacturer should hire an expert who has already gained experience in managing the channel conflicts
in other organizations, as a member of the grievance redressal committee or board of directors, for
addressing such conflicts.

Dealer Councils and Trade Associations

To handle the horizontal or vertical conflicts, the manufacturer forms a dealer council where the dealers can
unanimously put up their problems and grievances in front of the channel leader. To bring in unity among the
channel partners or intermediaries, they can be added as members in trade association which safeguards
their interest.
Superior Goals

Establishing a supreme goal of the organization and aligning it with the individual goals or objectives of the
channel partners, may reduce the channel conflicts.

Regular Communication

The channel leader should take regular feedback from the channel partners through formal and informal
meetings to know about market trends and dynamics. Also, the channel partner’s issues and conflicts can be
addressed through frequent interactions.

Legal Procedure

When the conflict is critical and uncontrollable by the channel leader, the aggrieved party can seek legal
action, by filing a lawsuit against the accused party.

Fair Pricing

Most of the channel conflicts are a result of the price war, and therefore, these can be resolved by ensuring
that products are equally priced in all the territories and a fair margin is provided to the channel partners.

• Logistics management,
What Does Logistics Management Mean?
Logistics management is a supply chain management component that is used to meet customer demands
through the planning, control and implementation of the effective movement and storage of related
information, goods and services from origin to destination. Logistics management helps companies reduce
expenses and enhance customer service.
The logistics management process begins with raw material accumulation to the final stage of delivering
goods to the destination.
By adhering to customer needs and industry standards, logistics management facilitates process strategy,
planning and implementation.
Logistics management is the governance of functions that helps organizations plan, manage and implement
processes to move and store goods.
Logistics management activities typically include inbound and outbound transportation management, fleet
management, warehousing, materials handling, , logistics network design, inventory control, supply/demand
planning and management of third-party logistics services providers.
Logistics management functions
To varying degrees, logistics management functions include customer service, sourcing and procurement,
production planning and scheduling, packaging, and assembly. Logistics management is part of all the levels
of planning and execution, including strategic, operational and tactical.
Further, it coordinates all the activities, and it integrates logistics activities with other functions, including
marketing, sales, manufacturing, finance and information technology.

1. Logistics Management :
Logistics Management, as name suggests, is a part of that helps business or companies to deliver better
service to their customer and help them to properly manage flow of goods as well as control over inbound
freight.
2. Distribution Management :
Distribution Management, as name suggests, is a management that mainly focuses distribution of products
and stream line supply chain to ensure optimum utilization of resources and materials required for production
at lowest price.
Difference between Logistic Management and Distribution Management :

Logistics Management Distribution Management

It mainly focuses on control and management of It mainly focuses on activities related to movement of end
flow and storage of goods and services or product at each and every step starting from production
products into and out of company. line to customer.

It simply handles physical movement of product and

It simply handles distributing products i.e. supply
deliver right goods to right customer on time at correct
chain activities.
place.

Logistic management is more efficient and is Transport management is less efficient and is responsible
responsible for fulfilling customer demands. for maintaining stable prices.

It deals with order processing, customer service,

It deals with packaging, flow of information,
inventory control, packaging and materials, etc. and is
material handling, production, transportation,
important part of business cycle for both distributors and
inventory management, etc.
wholesalers.

Types of logistic includes supply, distribution. Types of distribution includes supplying distribution,
production and reverse logistics. carriers, cargo planes, sales and distribution, etc.

Process of logistic management includes

planning, implementing, controlling efficient, Process of distribution management includes analyzing
effective forward and reserve flow as well as and planning movement of goods or products.
storage of goods and services.

Its main objective is to deal with physical placement of

Its main objective is to meet fulfill customer
necessary goods to large number of customers that are
demand on time and in cost-effective manner.
living at different locations.

Its benefit includes increase customer service,

Its benefit includes increase improving enterprise time
create visibility into supply chain, increases
management, easy inventory monitoring, saves cost, etc.
efficiency, saves cost.
• supply chain management
What Is Supply Chain Management (SCM)?
Supply chain management is the management of the flow of goods and services and includes all processes
that transform raw materials into final products. It involves the active streamlining of a business's supply-side
activities to maximize customer value and gain a competitive advantage in the marketplace.
SUPPLY CHAIN FUNCTION
The functions of a supply chain include –
1. Purchasing
The first function of supply chain management is purchasing. In the manufacturing process, raw materials
are required to produce goods and products. It is important that these materials are procured and delivered
on time so that production can begin. For this to occur, coordination with suppliers and delivery companies
will be required to avoid any potential delays.
2. Operations
Demand planning and forecasting are usually required before materials can be procured, as the demand
market will dictate how many units to be produced and how much material is required for production. This
function is important in supply chain management as organizations must accurately forecast demand to avoid
having too much or too little inventory that will lead to losses in revenue. Therefore, demand planning and
forecasting must be tied in with inventory management, production, and shipping to avoid such mistakes
3. Logistics
Logistics is the part of supply chain management that coordinates all aspects of planning, purchasing,
production, warehousing, and transportation so that the products will reach the end-consumer without any
hindrances. It is helpful to have adequate communication between multiple departments so that products can
be shipped to customers quickly and at the lowest cost.
4. Resource Management
Production consumes raw materials, technology, time, and labor. Resource management ensures that the
right resources are allocated to the right activities in an optimized manner. This will ensure that an optimized
production schedule is created to maximize the efficiency of the operations. When calculating the available
capacity, you should consider the capabilities of each resource and determine whether they can perform the
work that is scheduled on it. This will ensure that you are not over-promising orders and that your production
schedule is feasible and accurate.
5. Information Workflow
Information sharing and distribution is what keeps all of the other functions of supply chain management on
track. If the information workflow and communication are poor, it could break apart the entire chain. Many
disruptions that arise in supply chains can be prevented by increased visibility and communication. Having a
consistent system that is used by all departments will ensure that everyone is working with the same set of
data and will prevent miscommunications and time spent updating everyone on new developments.

LEVEL OF SUPPLY CHAIN MANAGEMENT

1 OPERATIONAL LEVEL
Daily and weekly forecasting to figure out and satisfy demand Production operations, including scheduling
and detailed management of goods-in-process Monitoring logistics activity for contract and order fulfilment
Settling damages or losses with suppliers, vendors, and clients Managing incoming and outgoing materials
and products, as well as on-hand inventories
2 TACTICAL MANAGEMENT
Procurement contracts for necessary materials and services Production schedules and guidelines to meet
quality, safety, and quantity standards Transportation and warehousing solutions, including outsourcing and
third-party options Inventory logistics, including storage and end-product distribution Adopting best practices
in comparison to competitors
3 STRATEGIC PLANNING
Choosing the site and purpose of business facilities Creating a network of reliable suppliers, transporters,
and logistics handlers Long-term improvements and innovations to meet client demands Inventory and
product management throughout its life cycle IT programs and systems to make the process more effective

• reverse logistics.

Reverse logistics is the process of moving goods from their final destination back to the supplier. It
can be used for products that are defective, surplus, or returned by customers. Reverse logistics
helps companies reduce costs, recover lost revenue, and improve customer service.

For instance, In the beverage industry, companies are using reverse logistics to keep their tap
containers from being wasted. The process starts with producing beverages in bulk and then bottling
or canning them for retail sale when they’re ready. This requires many steps, including planning
transportation, managing shipping loads, and cleaning the containers.

There are 5 main steps in the reverse logistics process:

• Process the Return: When a consumer wants to return an item, they should be able with a
process that includes providing identification and signing for the package. The company will
then authorize your refund or replace any faulty goods in order of what’s been ordered from
them before being sent back out again.

• Deal with Returns: To ensure that your products are both returned and recycled efficiently,
you should consider using a centralized processing center. The first step in returning an item
is inspecting it for any damage or stains on the exterior of whichever container was used
when shipping

• Keep Returns Moving: Sending repairable products to the repair department might help you
reduce your daily waste.

• Repair: After inspecting the returned item/equipment and assessing whether or not it can be
fixed, it should be moved to the repair area.

• Recycle: Selling any sellable components should be attempted if feasible.

Successful Example
Apple
When it comes to an effective reverse logistics system, Apple is a shining example. Consumers who return
to an Apple shop to purchase the most recent model are offered discounts on the new product in exchange
for the return of their previous model.

Apple then takes the old models and returns them to their respective manufacturing facilities. Using this
approach, Apple is able to reuse components from earlier models in future products, allowing the company
to be more environmentally responsible while also saving money on manufacturing expenses.