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Bill Stankiewicz Verstrepen


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Best Regards,

Bill Stankiewicz
Vice President and General Manager
Shippers Warehouse of Georgia
Office: 678-364-3475
Sustainable Consumer Packaged Goods member
CPG Branding and Forum Member
Please consider the environment before printing this e-mail
“Change doesn\'t start on the surface. It\'s generated from consciousness.”
Deepak Chopra

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Bill Stankiewicz Verstrepen

  1. 1. Eye For Transport Amsterdam September 27th, 2007 Workshop Reverse Logistics Workshop Reverse Logistics in the hi-tech & electronics industry © Flanders Institute for Logistics Jordaenskaai 25 B-2000 Antwerpen Belgium 1 VIL © 2007
  2. 2. Flanders Institute for Logistics (VIL) Reverse Logistics Workshop 2 VIL © 2007
  3. 3. What is reverse logistics? The reverse logistics process covers the return flow of materials from end customer towards manufacturing site: Reverse Physical flow Logistics Admin flow Workshop Financial flow Reverse flows are characterized by their extremely variable nature: Volume Quality Quantity Value Throughput times 3 VIL © 2007
  4. 4. RL trends in hi-tech/electronics Time is money: very fast devaluation of products Trend towards pan-European or global service networks Huge potential for 3PL’s Use of RMA (capture each return asap in the process) Reverse Logistics High importance of ICT for sorting /routing / SLA management Workshop / customer contact High percentage “no trouble found” (up to 40%) Return policy is essential (gatekeeping/filter the influx) Technical product knowledge needed from 3PL (e.g. I-Pod) B2B: credit check is important part of the process Reverse logistics and after sales are becoming profit centers Etc… 4 VIL © 2007
  5. 5. Is this your company? Our customers are returning too many products! Our “no fault found” rate is 40%! Reverse We have too many intercompany returns! Logistics Workshop We neve see any credit from our OEM suppliers! Our salesforce isn’t playing by the rules! There is no transparency - We have no information or reports! Our returns situation is an accounting nightmare! Our returns process will always be out of control – Let’s accept this as a fact of life…? 5 VIL © 2007
  6. 6. Methodology: DMAIC (Six Sigma) 1) Define Reverse Logistics 2) Measure Workshop 3) Analyse 4) Improve 5) Control 6 VIL © 2007
  7. 7. Define: perception of unimportance (no process owner) Reverse Logistics Workshop “The returned-goods dock of a warehouse is a window VIL © 2007 to mistakes in engineering, sales, manufacturing and logistics.” 7
  8. 8. Measure: returns from end customers 6.00% 9.0 8.0 5.00% 4.77% 4.77% 7.0 4.00% 6.0 CI Reverse % of tu rn over 5.0 GS Logistics 3.00% HE TOT Workshop 2.42% 4.0 1.92% 2.00% 3.0 1.17% 2.0 1.00% 1.0 0.00% 0.0 BE60 NL60 LU60 BENELUX GB60 DK60 IT60 ES60 PT60 IBERIA NO60 SE60 FI60 NORDIC CI GS IN HE NDT BG End customers are returning 3-6 % of total turnover and orderlines 8 VIL © 2007
  9. 9. Measure: return reasons 60 50 Reverse Logistics 40 Workshop % of companies 30 20 10 0 Transport Not happy Delivery error Quality defect Cancellation No reason Late delivery Bad FC & Return after Commercial damage with product of sale overstock use Return reason 9 VIL © 2007
  10. 10. Analyse: return value as % of turnover Reverse Logistics Workshop 10 VIL © 2007
  11. 11. Analyse: share of RL in total logistics workload Reverse Logistics Workshop 11 VIL © 2007
  12. 12. Analyse: detailed process map (IDEF0) Reverse Logistics Workshop 12 VIL © 2007
  13. 13. Analyse: returns pipeline (Pareto) Pareto Analysis of Return Orders 100,00% 80% of return orders account 90,00% for 20% of total return value Reverse 80,00% Logistics Exactly 20% of return orders account for 80% of total Workshop 70,00% return value Cum. Return Value 60,00% 50,00% 40,00% 30,00% 20,00% 10,00% 0,00% Cum. % of Return Orders 13 VIL © 2007
  14. 14. Analyse: time-stamp analysis Reverse Logistics Workshop 14 VIL © 2007
  15. 15. Analyse: root causes (Ishikawa) Reverse Logistics Workshop 15 VIL © 2007
  16. 16. Improve: take action Combat “no fault found” Separate RC from DC Select and measure necessary KPI’s Publish monthly return reports Reverse Logistics Educate salesforce and customers Workshop Gatekeeping / reduce the influx (return policy - RMA) Document returns (photos) Interface different ICT systems Correct master + data (I/C pricing) Automatic accounting procedures (write-off) Organizational discipline: prevent problems at the source It’s not rocket science! (e.g call center headsets) Etc… 16 VIL © 2007
  17. 17. Control: elements of a total RL make-over systems/ cost model KPI legislation/ rules Reverse infrastructure Logistics Workshop partners company/ product packaging HR/skills product process/ transport flows 17 VIL © 2007
  18. 18. Checklist product High value density Serrato category Volume & weight Warehouse space needed (#pallet places) Seasonality (Christmas) -> forecasting? Reverse Statistics (MTBF) Logistics Workshop LT service contracts: B2B slow movers/spare parts needed (often >10 years) Top-5 return reasons (incl. no fault found!) Technical porduct knowledge needed High specialisation: “lock-in” of customer Inventarize 2nd hand/grey channels Play the recycling market (gold, silver) Risk management: Theft Environment (e.g. batteries) Fast product depreciation VIL © 2007 Cannibalisation (e.g. ink cartridges) 18
  19. 19. Checklist infrastructure (warehouse) Keep “clean” and “dirty” flows separate: brownfield or greenfield ERC? # inbound docks > # outbound docks Automation potential is low Low and wide racks (manual picking, lots of buffer inventory) Use mezzanines (lots of slow movers/high value density/spare parts) Reverse Logistics Large reception area: FIFO per country/product Workshop Repackaging area Scattered desks & PC-islands (inspection/testing) Separate inventory areas for phase-outs & spare parts (slow movers), packaging, refurbished items, swap stock Separate guarded area for scrapping/shredding (containers) Theft risk: fencing, badge access, CCTV, night guards, “Fort Knox” area for refurbished items ERC economies of scale/consolidation potential: high 19 VIL © 2007
  20. 20. Checklist ICT/KPI’s/reporting Identify KPI’s and collect historical data: # returns/product # returns/return reason # returns/customer Return rate/country Reverse Credit note amount Logistics Workshop Re-return rate # returns processed/day Cost/returned item Document throughput times (time stamps/SLA’s) Visibility of flows (web-enabled tracking & tracing) Open systems: interface/integrate with customer ERP (B2B) Call center: SLA contract management software needed Develop in-house ICT competente <-> find an ICT partner 20 VIL © 2007
  21. 21. Checklist HR/skills Seasonality/peak loads: enable flex work Product training & technical skills (e.g. I-Pod) FTE admin/floor ratio: ca. 1/3 Reverse Logistics Responsibility & accuracy (sorting/routing/scrap decisions) Workshop Knowledge of languages (RMA - English, French, German) ICT skills (SAP, Excel, Outlook) Procedural accuracy Dexterity, concentration, sharp eyesight Routine activities: socially beneficial employment (e.g. scrapping of ink cartridges) Job enrichment for outbound warehouse employees “Is reverse logistics female ?” 21 VIL © 2007
  22. 22. Checklist rules/legislation WEEE Recupel: volumes reporting Vlarem II: limits the volume of “scrap inventory” allowed Reverse Logistics Workshop Shredding: OVAM + tax certification Sarbanes-Oxley: valuation of refurbished inventory ISO14001 (environmental compliance) TL9000 (B2B telecom) ISO 18000: health & safety (dangerous compounds) Customs and export (crossing EU borders) Pallet fumigation (USA/ASPAC) 22 VIL © 2007
  23. 23. VIL maturity model for RL: where are you? Reverse Logistics Workshop 23 VIL © 2007
  24. 24. A complete VIL research report with 3PL roadmap for action will be available in the fall of 2007. Reverse Logistics Workshop Questions? 24 VIL © 2007
  25. 25. Reverse Logistics Workshop © All Rights Reserved Flanders Institute for Logistics (VIL) Jordaenskaai 25 B-2000 Antwerpen (Belgium) T: +32 (0) 3 229 05 00 F: +32 (0) 3 229 05 10 25 VIL © 2007