CEO EXECUTIVE SERIES!                                                                         23 JULY 2012REVERSE LOGISTIC...
CEO EXECUTIVE SERIES!                                                                                          23 JULY 201...
CEO EXECUTIVE SERIES!                                                                                                23 JU...
CEO EXECUTIVE SERIES!                                                                                      23 JULY 2012hav...
Upcoming SlideShare
Loading in...5
×

Logistics Executive - CEO Executive Series - July 2012

356

Published on

Reverse Logistics – the Opportunities outweigh the Challenges

Complex and disjointed, but Reverse Logistics represents big opportunities for value creation.

Reverse Logistics includes the key processes involved in moving product back through the supply chain to accommodate overstocks, returns, defects and recalls and is defined by the Center for Logistics Management at University of Nevada as “the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal”.

For product returns, Accenture report that on average it takes 12 times as many steps to process returns as it does to manage outbound logistics. The additional steps include activities such as assessing, repairing, repackaging, relabeling, restocking, reselling, recycling and refurbishing, which can result in the cost of reverse logistics being four to five times those of forward logistics.
However, best-in-class practitioners can directly correlate their reverse logistics expertise and systems to positive impacts on Customer Satisfaction, Brand Equity, Competitive Differentiation and Profitability.
Reverse logistics is big business - in the USA it is estimated that manufacturers and retailers are now dealing with $100 billion of products goods being returned on an annual basis. Here in Asia, product returns are destined to expand exponentially, driven by two rapidly accelerating consumer trends – online shopping and the proliferation of electronic gadgets.

Published in: Business, News & Politics
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
356
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
25
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Transcript of "Logistics Executive - CEO Executive Series - July 2012"

  1. 1. CEO EXECUTIVE SERIES! 23 JULY 2012REVERSE LOGISTICSTHE OPPORTUNITIES OUTWEIGHTHE CHALLENGES..... NEWS & EVENTS Complex and disjointed, but Reverse Logistics represents big opportunities for value creation writes Mark Mi#ar, Logistics Executive Group. Upcoming Event Logistics Executive is an official partner of the Asia Manufacturing Strategies Summit 2012. This exclusive event will take place in the Ritz-Carlton Hotel, Millenia, Singapore on 15th – 16th October 2012 and will provide the opportunity to discover the latest news and the best practices for optimizing your manufacturing and supply chain operations. The event is packed full of real life case studies, allowing you to benchmark your business against ‘best in class’ and ensure that you have the tools you need to form a coherent and logical strategy. To register please visit www.asiamanufacturingsummit.com/ register. Logistics Executive Global News Complex and disjointed, but Reverse Logistics represents big Logistics Executive appoints Brian Cartwright as MD, Middleopportunities for value creation. East Reverse Logistics includes the key processes involved in Logistics Executive is pleased tomoving product back through the supply chain to accommodate announce the appointment of Brianoverstocks, returns, defects and recalls and is defined by the Cartwright as Managing Director, Middle East and Africa. Brian has builtCenter for Logistics Management at University of Nevada as “the a solid reputation in the region as aprocess of moving goods from their typical final destination for leading recruitment professional withinthe purpose of capturing value, or proper disposal”. the Supply Chain and Logistics Sector. He had previously worked for Logistics For product returns, Accenture report that on average it takes Executive when he moved to the12 times as many steps to process returns as it does to manage region in 2008 and we are extremelyoutbound logistics. The additional steps include activities such as pleased to be able to welcome himassessing, repairing, repackaging, relabeling, restocking, reselling, back on board as a member of our Senior Management team. Please feelrecycling and refurbishing, which can result in the cost of reverse free to contact Brian directly shouldlogistics being four to five times those of forward logistics. you require any assistance from him However, best-in-class practitioners can directly correlate and his team. Brian’s email address is:their reverse logistics expertise and systems to positive impacts Brianc@LRS.ae© 2012 LRS Group Pty. Ltd. All rights reserved! PAGE 1
  2. 2. CEO EXECUTIVE SERIES! 23 JULY 2012 o n Cu s to m e r S a t i s f a c t i o n , Brand Equity, Competitive Differentiation and Profitability. Re verse logistics is big business - in the USA it is estimated that manufacturers and retailers are now dealing with $100 billion of products goods being returned on an annual basis. Here in Asia, product returns are destined to expand exponentially, driven by two rapidly accelerating co n s u m e r t r e n d s – o n l i n e shopping and the proliferation Graphic 1: Product returns vary by industry sector and type of product, with some of electronic gadgets. typical return percentages by product type. What types of goods are being returned? the for ward supply chain, competitive product – another companies could surely eliminate 39% of all returns. Product retur ns var y by many of these returns – for Ho w e v e r, i n p r a c t i c e , industr y sector and ty pe of example Late Delivery, Missing companies do need to balance product, with some ty pical Pa r t s , Damaged, No t their acceptance of product return percentages by product Functioning – representing some returns in line with their type summarized in graphic 1 46% of returns. philosophies and policies for (see right). Fu r t h e r m o r e , o n e co u l dtheir brand, warranties and Why are products being argue that additional diligence customer service. returned? during the sales and customer The complexity of reverse According to the Reverse service processes may further logistics involves many more Logistics Association, products reduce the volume of products transactions than the forward are returned for numerous that are returned due to No supply chain and the various reasons (as illustrated in graphic Re a s o n , D i f f e r e n t t h a n activities relating to product 2 below) Expected, Not Satisfied with returns will span across many What is interesting about Performance, Did not want functional departments – sales, these reasons for returns, is how Pr o d u c t a n d Fo u n d b e t t e r customer ser vice, finance, by improving processes within warehouse, repairs and transportation. For the majority of these functions, product Not#Func@oning# 23%# returns are likely seen as much Damaged# 16%# more of an annoyance rather Other# 14%# than a priority. However, with No#Reason# 9%# effective returns management Different#than#Expected# 9%# providing tangible opportunities Not#Sa@sfied#with#Performance# 9%# for businesses to reduce costs, Did#not#want#product# 8%# reco ver value and impro ve Missing#Parts# 5%# customer service, appointing Found#be<er#compe@@ve#product# 4%# one senior leader to be Late#Delivery# 2%# responsible for all aspects of 0%# 5%# 10%# 15%# 20%# 25%# product retur ns wil l focus attention and harness the resources to capitalize on the Graphic 2: According to the Reverse Logistics Association, products are returned for opportunities. numerous reasons. Source: Reverse Logistics Association.© 2012 LRS Group Pty. Ltd. All rights reserved! PAGE 2
  3. 3. CEO EXECUTIVE SERIES! 23 JULY 2012 There are typically five key transaction elements of a reverse logistics processing and ecosystem, involving multiple physical product functions within the al locations are organization as well as a number synchronized of outsourced service providers: such that the Customer Service – point of replacement sale outlets, service centre or call product is centre delivered at the same time as the Pr o d u c t Mo v e m e n t – return product is transportation providers co l l e c te d . No t managing the collection and necessarily return of products to a depot, applicable to outbound transportation and every application, delivery of replacement products but particularly Warehousing – centralized relevant in the e- depots for receiving, sorting, commerce and storing, picking and dispatching online shopping Decision – inspection of sectors, the r e t u r n e d i te m s i n o r d e r to synchronized determine their disposition – ie swap can what action is most appropriate significantly reverse logistics is concentrated to maximize asset recover y reduce costs by eliminating one within one clearly defined point potential transportation leg, whilst also of leadership, which has the Disposition – processing the increasing customer satisfaction authority to manage across all returned products, which could because the customer doesn’t the internal silos within your involve repair, return to stock, have to wait for replacement to organization and who is the refurbish, upgrade, recondition, be delivered. central control point for all the salvage components, sell to third Fi v e C r i t i c a l S u c c e s s external partners in the reverse party, recycle or discard Factors logistics eco system. Throughout this For best in class reverse 3.Va l u e – c o n t i n u a l l y s e e k collaborative network of internal logistics, recommendation is for opportunities for value creation and external service providers, businesses to concentrate on – both for your customers and companies need to deploy these five key aspects that will for your company. Well managed integrated and synchronized enable success in capitalizing on reverse logistics operations, with processes, making reverse the opportunities: disciplined processes and logistics a technology intensive 1.Vi s i b i l i t y – l e v e r a g e a committed customer service, will business. However, effective common technology platform engender customer loyalty and deployment of technology can across and throughout your s t r e n g t h e n b r a n d e q u i t y. significantly improve efficiencies reverse logistics ecosystem, Effective and efficient reverse and reduce costs, thereby providing one single view of each logistics operations, together increasing profitability – one r e t u r n e d p r o d u c t ’s j o u r n e y with a diligent approach to asset example being the Synchronized throughout the whole process. reco ver y wil l capture value Swap. Adopt the Control Tower model within your organization that One of the leading best to facilitate centralized can drive profitability and practices in returns information management that competitive advantage. management, the Synchronized enables end to end visibility. 4.Customer Ser vice – the Swap is where one visit by the Collaboration involves an open trigger that activates reverse transportation provider includes approach to information sharing logistics activities is when the both collection and delivery. 2.O w n e r s h i p – e n s u r e customer experiences a problem Leveraging the IT system, the responsibility for all aspects of with your product. Ensure you© 2012 LRS Group Pty. Ltd. All rights reserved! PAGE 3
  4. 4. CEO EXECUTIVE SERIES! 23 JULY 2012have well trained customer service increasing demand for traditional Logistics Executivepersonnel and robust complaints customer service personnel to have www.logisticsexecutive.comhandling processes in order to increased breadth and depth ofminimize pain and inconvenience knowledge about the supply chain Australiafor the customer. Furthermore, and logistics functions – Sydneypersistent but polite probing of combining technical expertise Phone: +61 2 8262 9800the problem early during the with soft skills. Organizations Melbournecustomer complaint interface can therefore need to adjust their Phone: +61 3 9863 9488often result in successful talent acquisition and retention   Asiaresolution, without needing to strategies accordingly, to ensure Shanghaireturn the product – minimising they are attracting candidates with Phone: +86 21 6427 6697down time, enhancing customer the appropriate soft skills, in many   Singaporeexperience and reducing the cases from other industry sectors, Phone: +65 6692 9202amount of costly returns that are and then rapidly training them on Hong Kongno-fault-found. the technical aspects of reverse Phone +852 3125 76545.For ward Fundamentals – logistics. India consistently be aware that Conclusion: Phone +91 22 4090 7053meticulous attention to detail Reverse Logistics may indeed Middle Eastacross key activities in the forward be complex, but the opportunities United Arab Emirates - Dubaisuppl y chain can reduce the outweigh the challenges – Phone: +971 4 361 6275burden on reverse logistics by persevere with overcoming the New Zealandsubstantially reducing unnecessary challenges! Concentrated efforts Wellingtonreturns. on developing the soft skills in Phone: +64 4 496 6730 Customer Service parallel with enabling the As both a key element and a infrastructure, transportation andc r i t i c a l s u c c e s s f a c t o r, t h e technology platforms willCustomer Service component can empower value creation through For a copy of the 2012often become the ke y customer satisfaction and financial Logistics Executivedifferentiator within your reverse results. Learn more about Reverse Global Employmentlogistics ecosystem. Customer Logistics at the RLA Conferences e r v i c e c a n m a ke - o r- b r e a k & Expo in Singapore this 25-27 Report email:successful value creation and September – contact darrylj@logisticsexecutive.comhence companies must deploy due markm@LogisticsExecutive.com ordiligence to the human capital or visit www.rla.org. kimw@logisticsexecutive.comdimension. This results in AUTHOR PROFILE: MARK MILLAR 马克 Mark Millar leverages 25 years global business experience to develop and deliver enlightening and informative Keynote Presentations and to provide Consulting, Education and Advisory services - creating value for clients by empowering superior performance in their supply chain ecosystems. Acknowledged as an industry thought leader, Mark has been engaged by clients as Keynote Speaker, Moderator or Conference Chairman at more than 230 events in 20 countries. Recognised by the Global Institute of Logistics as “One of the most Progressive People in World Logistics”, Mark serves as a Director of Logistics Executive: markm@logisticsexecutive.com© 2012 LRS Group Pty. Ltd. All rights reserved! PAGE 4

×