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Reverse Logistics
- 1. REVERSE LOGISTICS Copyright© Ahmed Meyaki IBA 2005
- 2. TABLE OF CONTENTINTRODUCTION WHAT IS REVERSE LOGISTICS The five basic questions Contrast between reverse and forward Categories of revlog networks and destinations DIMENSIONS ACTIVITIES STRATEGIC USE CHALLENGES BARRIERS CONCLUSION
- 3. INTRODUCTION Logistics doesnot end with the delivery of goods to customers Customer awareness; product liability Environmental issues and regulations Economic benefits- reverse logistics accounts for around 4% of total logistics cost of US companies Hence returned goods management Traceability of products Waste elimination JIT Product recalls
- 4. WHAT IS REVERSELOGISTICS ” The process of planning, implementing and controlling the efficient, cost-effective flow of raw material, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing or creating value or for proper disposal”. Rogers and Tibbern-Lemke 1999
- 5. THE FIVE BASIC QUESTIONS Alternatives to recover products, product parts and materials? Who performs activities? How to perform activities? Possibility of integrating revlog activities with classical production and distribution systems? Costs/benefits from environmental and economic points of view?
- 6. FORWARD VRS REVERSELOGISTICS 1/3
- 7. FORWARD VRS REVERSELOGISTICS 2/3 Forward Reverse One to many transportation Many to one transportation Forecasting is straightforward Forecasting more difficult Product packaging uniform Product often damaged Product quality uniform Product quality not uniform Destination/routing clear Destination/routing unclear Disposition options very clear Disposition not clear Pricing is relatively uniform Pricing depending on many factors Standardised channel Exception driven
- 8. FORWARD VRS REVERSELOGISTICS 3/3 Forward Reverse Importance of speed is often recognised Speed often not considered a priority(pharmaceuticals?) Inventory mgt consistent Inventory mgt. inconsistent PLC manageable PLC is more complex Negotiation between parties straightforward Complicated by additional considerations Marketing methods well known Marketing complicated by several factors Real-time info readily available to track products Visibility of process less transparent
- 9. CATEGORIES OF REVLOGNETWORKS Depends on the source of reverse flow: Catalogue/e-commerce customer returns Retail customer returns Retailer returns Manufacturer returns to a supplier Destinations Return to vendor Sell as new Repackage, sell as new Sell via outlet Remanufacture/refurbish Sell to broker Donate to charity Recycle Landfill
- 10. REVLOG ACTIVITIES 1/2Products Return to Supplier Resell Sell via outlet Salvage Recondition Refurbish Remanufacture Reclaim materials Recycle Landfill
- 11. REVLOG ACTIVITIES 2/2Packaging Reuse Refurbish Reclaim materials Salvage
- 12. STRATEGIC USE OF REVLOG Competitive reasons Clean channel Protect profitability Legal disposal issues Recapture value and recover assets
- 13. CHALLENGES Difference inObjectives Between Manufacturers and Retailers Condition of the item Value of the Item Timeliness of response Other challenges: Gate keeping Shortening disposition cycle time Information systems Reasons for returns and how to dispose of
- 14. BARRIERS Importance ofrevlog relative to other issues Company policies Lack of systems Management inattention Finance Personnel Legal issues
- 15. CONCLUSIONS Revlog gainingprominence Companies stand to gain Activities vary according to industry Faces huge challenges and barriers Future trend is towards improvement in systems and technologies
- 16. REFERENCES 1/2 Tibben-lemke R. S (1998) Going Back wards: Reverse Logistics trends and Practices Rakesh, Vinayak (2005) Reverse Logistics: An Important Dimension of supply Chain management De Brito and Dekker (2002) Reverse Logistics: A Framework Haw-Jan Wu, Steven C. Dunn International Journal of Physical Distribution & Logistics Management; Volume: 25 Issue: 2; 1995 Technical paper . Environmentally responsible logistics systems Liz Ritchie, Bernard Burns, Paul Whittle Richard Hey Supply Chain Management: An International Journal; Volume: 5 Issue: 5; 2000 Case study : The benefits of reverse logistics: the case of the Manchester Royal Infirmary Pharmacy
- 17. REFERENCES 2/2 RonaldS. Tibben-Lembke, Dale S. Rogers Supply Chain Management: An International Journal; Volume: 7 Issue: 5; 2002 General review Differences between forward and reverse logistics in a retail environment Rakesh, Vinayak (2005) Reverse Logistics: An Important Dimension of supply Chain management Reverse Logistics Executive council www.revlog.com