Reverse Logistics

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A presentation on Reverse Logistics

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  • The sheats are clear and gives good indication of RL, but can be more in detail info is very general
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Reverse Logistics

  1. 1. REVERSE LOGISTICS Copyright © Ahmed Meyaki IBA 2005
  2. 2. TABLE OF CONTENT <ul><li>INTRODUCTION </li></ul><ul><li>WHAT IS REVERSE LOGISTICS </li></ul><ul><ul><li>The five basic questions </li></ul></ul><ul><ul><li>Contrast between reverse and forward </li></ul></ul><ul><ul><li>Categories of revlog networks and destinations </li></ul></ul><ul><li>DIMENSIONS </li></ul><ul><li>ACTIVITIES </li></ul><ul><li>STRATEGIC USE </li></ul><ul><li>CHALLENGES </li></ul><ul><li>BARRIERS </li></ul><ul><li>CONCLUSION </li></ul>
  3. 3. INTRODUCTION <ul><li>Logistics does not end with the delivery of goods to customers </li></ul><ul><li>Customer awareness; product liability </li></ul><ul><li>Environmental issues and regulations </li></ul><ul><li>Economic benefits- reverse logistics accounts for around 4% of total logistics cost of US companies </li></ul><ul><li>Hence returned goods management </li></ul><ul><ul><li>Traceability of products </li></ul></ul><ul><ul><li>Waste elimination JIT </li></ul></ul><ul><ul><li>Product recalls </li></ul></ul>
  4. 4. WHAT IS REVERSE LOGISTICS <ul><li>” 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”. </li></ul><ul><li>Rogers and Tibbern-Lemke 1999 </li></ul>
  5. 5. THE FIVE BASIC QUESTIONS <ul><li>Alternatives to recover products, product parts and materials? </li></ul><ul><li>Who performs activities? </li></ul><ul><li>How to perform activities? </li></ul><ul><li>Possibility of integrating revlog activities with classical production and distribution systems? </li></ul><ul><li>Costs/benefits from environmental and economic points of view? </li></ul>
  6. 6. FORWARD VRS REVERSE LOGISTICS 1/3
  7. 7. FORWARD VRS REVERSE LOGISTICS 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. 8. FORWARD VRS REVERSE LOGISTICS 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. 9. CATEGORIES OF REVLOG NETWORKS <ul><li>Depends on the source of reverse flow: </li></ul><ul><ul><li>Catalogue/e-commerce customer returns </li></ul></ul><ul><ul><li>Retail customer returns </li></ul></ul><ul><ul><li>Retailer returns </li></ul></ul><ul><ul><li>Manufacturer returns to a supplier </li></ul></ul><ul><li>Destinations </li></ul><ul><ul><li>Return to vendor </li></ul></ul><ul><ul><li>Sell as new </li></ul></ul><ul><ul><li>Repackage, sell as new </li></ul></ul><ul><ul><li>Sell via outlet </li></ul></ul><ul><ul><li>Remanufacture/refurbish </li></ul></ul><ul><ul><li>Sell to broker </li></ul></ul><ul><ul><li>Donate to charity </li></ul></ul><ul><ul><li>Recycle </li></ul></ul><ul><ul><li>Landfill </li></ul></ul>
  10. 10. REVLOG ACTIVITIES 1/2 <ul><li>Products </li></ul><ul><ul><li>Return to Supplier </li></ul></ul><ul><ul><li>Resell </li></ul></ul><ul><ul><li>Sell via outlet </li></ul></ul><ul><ul><li>Salvage </li></ul></ul><ul><ul><li>Recondition </li></ul></ul><ul><ul><li>Refurbish </li></ul></ul><ul><ul><li>Remanufacture </li></ul></ul><ul><ul><li>Reclaim materials </li></ul></ul><ul><ul><li>Recycle </li></ul></ul><ul><ul><li>Landfill </li></ul></ul>
  11. 11. REVLOG ACTIVITIES 2/2 <ul><li>Packaging </li></ul><ul><ul><li>Reuse </li></ul></ul><ul><ul><li>Refurbish </li></ul></ul><ul><ul><li>Reclaim materials </li></ul></ul><ul><ul><li>Salvage </li></ul></ul>
  12. 12. STRATEGIC USE OF REVLOG <ul><li>Competitive reasons </li></ul><ul><li>Clean channel </li></ul><ul><li>Protect profitability </li></ul><ul><li>Legal disposal issues </li></ul><ul><li>Recapture value and recover assets </li></ul>
  13. 13. CHALLENGES <ul><li>Difference in Objectives Between Manufacturers and Retailers </li></ul><ul><ul><li>Condition of the item </li></ul></ul><ul><ul><li>Value of the Item </li></ul></ul><ul><ul><li>Timeliness of response </li></ul></ul><ul><li>Other challenges: </li></ul><ul><ul><li>Gate keeping </li></ul></ul><ul><ul><li>Shortening disposition cycle time </li></ul></ul><ul><ul><li>Information systems </li></ul></ul><ul><ul><li>Reasons for returns and how to dispose of </li></ul></ul>
  14. 14. BARRIERS <ul><li>Importance of revlog relative to other issues </li></ul><ul><li>Company policies </li></ul><ul><li>Lack of systems </li></ul><ul><li>Management inattention </li></ul><ul><li>Finance </li></ul><ul><li>Personnel </li></ul><ul><li>Legal issues </li></ul>
  15. 15. CONCLUSIONS <ul><li>Revlog gaining prominence </li></ul><ul><li>Companies stand to gain </li></ul><ul><li>Activities vary according to industry </li></ul><ul><li>Faces huge challenges and barriers </li></ul><ul><li>Future trend is towards improvement in systems and technologies </li></ul>
  16. 16. REFERENCES 1/2 <ul><li>Tibben- lemke R. S (1998) Going Back wards: Reverse Logistics trends and Practices </li></ul><ul><li>Rakesh, Vinayak (2005) Reverse Logistics: An Important Dimension of supply Chain management </li></ul><ul><li>De Brito and Dekker (2002) Reverse Logistics: A Framework </li></ul><ul><li>Haw-Jan Wu, Steven C. Dunn International Journal of Physical Distribution & Logistics Management; Volume: 25 Issue: 2; 1995 Technical paper . Environmentally responsible logistics systems </li></ul><ul><li>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 </li></ul>
  17. 17. REFERENCES 2/2 <ul><li>Ronald S. Tibben-Lembke, Dale S. Rogers </li></ul><ul><li>Supply Chain Management: An International Journal; Volume: 7 Issue: 5; 2002 General review Differences between forward and reverse logistics in a retail environment </li></ul><ul><li>Rakesh, Vinayak (2005) Reverse Logistics: An Important Dimension of supply Chain management </li></ul><ul><li>Reverse Logistics Executive council www.revlog.com </li></ul>

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