The Role of Reverse Logistics in a Circular Economy

Serving Manufacturers, Retailers, and Service Solutions Providers
OFFICIAL MAGAZINE OF THE
Edition 93
Reduce Your Lifetime Buy
(LTB) by 10X

2 Reverse Logistics Magazine | Edition 93 www.RLmagazine.com
Issue 12 Volume 5
The Rise of Refurbished Electronics’ Marketplaces
By Varun R. Thakur, Senior Marketing Manager, Amazon Renewed
Mobile carriers have been making a push to encourage consumers to trade-in
their older generation phones, offering lucrative offers on newer models. While
customers don’t give much thought to where the traded-in phones end up, a
wave of companies involved in cleaning, repairing, testing, inspecting, grading,
repackaging, and reselling are cropping up.
ARTICLE
PAGE 16
The Top 5 Characteristics of Successful Repair Depot
Operations for Product-Based Service Businesses
By Tom Devroy, Senior Product Evangelist, Service Management, IFS
Managing reverse logistics and depot repair, or all operations related to the reuse
of products and materials, is a growing challenge for B2C and B2B manufacturers,
retailers and service organizations.
ARTICLE
PAGE 26
PAGE 20
The Emerging Circular Economy and Necessity
of Reverse Logistics
By Chris Cloutier, Director of Sustainability for CoreCentric Solutions
Developing a circular economy is a growing movement aimed at reducing the
environmental impact of products that are manufactured, sold and used. The
reverse logistics industry is not only essential to the evolution of a circular economy,
it has important lessons to offer this burgeoning movement.
ARTICLE
PAGE 30
Reverse Logistics and Circular Economy Values - A Comparison
By Adrienna Zsakay, Founder of Circular Economy Asia Inc.
A key component for the efficient functioning of the Circular Economy (CE) lies in
Reverse Logistics (RL). However if company’s interested in transitioning to the CE
to extract additional economic value from their material assets (products) believe
the current Reverse Logistics systems they have in place will be enough, they may
have to think again.
ARTICLE
CONTENTS
PAGE 10
Reduce Your Lifetime Buy (LTB) by 10X
By Ken Ueltzen & Mark Anderson of Cokeva, Inc.
It is critical to control the cost of service support, especially high dollar mission-
critical parts. OEMs are already investing in large inventories of spares to cover
diverse locations. Further expense can come when the part(s) is no longer
manufactured and a lifetime buy (LTB) is necessary to ensure spares availability
through several years of the service support life.
ARTICLE
Reverse Logistics and Learning Repurposing
from Your House Cat
By William Oliver Hedgepeth, Transportation and Logistics Ma,
at American Public University
Reverse logistics is easily confused with the recycling bin that sits beside your
trash can. The bin’s recyclable contents are picked up by a green truck that looks
suspiciously like your trash truck. But reverse logistics (RL) is so much more.
ARTICLE
PAGE 38

At a recent family reunion, my parents brought
their 8mm projector and showed my siblings
and their grandchildren some VERY OLD family
videos. Wow technology has come A LONG
way...but in one of these videos that took place
in 1972, my brother is opening a Christmas gift.
He ripped the wrapping paper off, and there
was this plastic ball toy, with some cardboard
packaging on the back of it. My mom lifted one
tab, and out fell the ball, and my brother was immediately able to
play with the toy. Wow packaging has also come a long way! When
my children get toys these days, it takes several minutes, and often
tools, to get the toy out of the packaging. There’s often layers of plastic
within cardboard, with tape, tabs, twist ties, stitches and even screws,
and all usually within a thick clam shell that takes scissors, a box cutter
or razor blade to get through.
Of course there are a few reasons for this intense packaging. 1. Security: unfortunately theft is an issue for retailers, and
having complex packaging helps prevent items from being easily stolen. 2. Marketing: giving the consumer the opportunity
to see the whole toy and try it before they buy it is usually desired by the buyer. And 3. Shipping: Often these toys are
manufactured overseas and need to be shipped by boat, then truck, and handlers and need to be kept safe from being
damaged en route.
So what’s the answer?
I’ve recently come across two videos online that could
help: The first video was from LimeLoop about reusable
packaging. Video 1 Saving trees and preventing trash:
This is a circular way of thinking!
The second video was from Amazon on sustainable
packaging for e-commerce products: Video 2 When
items are shipped by on-line shopping, two of those
three factors mentioned previously are not relevant. So
e-commerce items can be packaged differently.
Just imagine the amount of trash that would be
prevented with both of these concepts being utilized!
I hope to start seeing these changes and others
implemented in the near future.
Felecia Przybyla
RL Magazine Editor
Editor@rla.org
Message
Editor
from the
OUR MISSION
The Reverse Logistics Association is a members’ driven, global trade association for the returns and reverse
industry, offering information, research, solutions and services for Manufacturers, Branded, and Retail companies
from Third Party Providers. Our goals are to educate and inform Reverse Logistics professionals around the world,
and be the voice of the reverse industry.

ABSTRACT
Developing a circular economy is a growing movement
aimed at reducing the environmental impact of products
that are manufactured, sold and used. The reverse
logistics industry is not only essential to the evolution
of a circular economy, it has important lessons to offer
this burgeoning movement.
Developing a circular economy is a growing movement
aimed at reducing the environmental impact of products
that are manufactured, sold and used. The reverse
logistics industry is not only essential to the evolution
of a circular economy, it has important lessons to offer
this burgeoning movement.
As sustainability takes root in organizations around the
world, they’re looking to develop more refined strategies
to help them find new solutions for issues related to
material consumption and disposition. Increasingly, the
circular economy is emerging as the preferred strategy
for many organizations – a fact that is being emphasized
through a variety of medium including the February
2018 RLA meeting in Las Vegas and a recent edition
of Reverse Logistics magazine, which included several
articles on reverse logistics and the circular economy.
This article takes a somewhat different approach,
looking more closely at some of the key principles of a
circular economy and how reverse logistics is not only
essential to its success, but how it can help accelerate
and optimize the adoption and implementation of a
circular economy.
THE CASE FOR A CIRCULAR ECONOMY
Currently, most commerce is predicated on a “take,
make, dispose” model that extracts and uses natural
resources in the manufacture of a product that is
used and then commonly disposed of, thus the term
“throwaway economy.”
Image 11
: Illustration of Take, Make, Dispose
The circular economy looks to disrupt this model
throughtherenewalandreuseofproducts.Asexplained
by The Ellen McArthur Foundation, a circular economy
“aims to redefine products and services to design waste
out, while minimizing negative impacts.”2
At its core, a
circular economy is based on three basic principles3
:
• Design out waste and pollution
• Keep products and materials in use
• Regenerate natural systems
The Emerging Circular Economy
and Necessity of Reverse Logistics
By Chris Cloutier, Director of Sustainability for CoreCentric Solutions

21www.RLmagazine.com Edition 93 | Reverse Logistics Magazine

As with most disruptive activity, there is a significant
financial opportunity – but also an equally compelling
opportunity for the preservation of natural resources
– in the adoption of a circular economy. In fact, the
Ellen McArthur Foundation and the World Economic
Forum reported in 2014 that the circular economy can
generate $1T globally by 20254
.
Not surprisingly, a circular system is more complex
and requires significant innovation. The Ellen McArthur
Foundation illustrates a circular economy as:
Image 25
: Illustration of a Circular Economy
While a circular economy model is more dynamic and
complex than the “take, make, dispose” model, it’s
important to note that many of the essential elements
of a circular economy already exist in one form or
another. Moving forward, the challenge will be to not
only optimize existing systems but also build new ones
to recover and re-purpose more products and material.
One example is Extended Producer Responsibility (EPR),
where product manufacturers are required by law to
provide take-back processes at the end of a products’
life cycle. While this practice is more common in Europe,
it does exist in the United States, particularly within the
electronics industry. The circular economy approach
takes the next step and encourages manufacturers to
think about a “cradle to cradle” system where products
or parts are refurbished whenever possible.
A recent white paper, “Circular Consumer Electronics:
An Initial Exploration,” by Google and the Ellen
McArthur Foundation imagines and explores a more
robust circular system for consumer electronics. The
report found that such a system should have four key
elements:
• Electronic devices are loved for longer, by one
user or by many
• Devices are a gateway to the cloud

23www.RLmagazine.com Edition 93 | Reverse Logistics Magazine
2018 AMSTERDAM
OCTOBER 15-17, 2018 – AMSTERDAM, THE NETHERLANDS
EUROPEAN BASED REVERSE LOGISTICS
PROFESSIONALS AND COMPANIES WILL BE IN ATTENDANCE
The Reverse Logistics Association Conference & Expo will
kick off with a Monday Evening Reception. Then two full
days will include the opening of the exhibit hall, Keynote
Addresses and panel discussions, and several networking
opportunities. A wide range of Reverse Logistics
companies will be in attendance from repair/refurbishing
to recycling/e-waste and transportation logistics. This
is a rich opportunity for OEMs, Retailers, and Branded
companies to identify future service partners among
the many exhibitors showcasing their Reverse Logistics
solutions.
KEYNOTE SPEAKER:
Katarzyna
Michniewska
of Eko Cykl
THREE DAYS OF REVERSE LOGISTICS
EDUCATION, LEADERSHIP, INNOVATION AND NETWORKING!
For more information, visit: www.RLAShows.org

• Customers get the service that’s right for them
• Products and components are cascaded6
THE NECESSITY OF REVERSE SYSTEMS IN A
CIRCULAR ECONOMY
Reverse systems are an essential part of existing and
new circular economy systems. The Ellen McArthur
Foundation agrees, citing reverse cycles as a key building
block in a circular economy. Specifically, they highlight
theneedforsystemsthatcaptureandsegmentproducts
at end-of-life with the intention of keeping salvageable
materials and products in the circular system, allowing
a higher level of material recovery and use.7
Reverse logistics done well directly addresses two of
the three key principles laid out by the Ellen McArthur
Foundation – design out waste and keep products and
materials in use. In the illustration above, it is clear
that reverse systems are a necessary component of
any circular economy systems and are already helping
achieve the first element identified in the “Circular
Consumer Electronics” white paper – electronic devices
are loved for longer, by one user or many.
As a sector, the reverse logistics industry has a unique
opportunity to help inform and support a circular
economy. To help meet the principle of designing out
waste, reverse logistics provides feedback on product
quality – including common failure modes – which can
be critical in helping manufacturers lower product
return rates by improving quality and performance in
the development stage. Product designers start out
looking to create a product that produces a certain
outcome or meets certain specifications. An engineer
analyzing product performance from failed products
has an entirely different perspective – this forensics
examination of the product can reveal systemic/design
issues that regularly lead to failures and thus produce
waste. By empowering the critical product functionality
feedback loop, reverse logistics can help improve
product performance, reduce waste, decrease returns
and improve customer satisfaction. All leading to a
healthier bottom line and stronger brand loyalty.
Additionally, reverse logistics help keep products
and materials in use by working to maximize the
number of products recovered, restored and re-
used. Furthermore, reverse logistics companies have
advanced material recovery systems for products that
are not able to be recovered and re-sold for their original
use. By providing efficient, effective “catch basins” for
unwanted, damaged or returned products, the reverse
logistics industry works to ensure that existing products
and their component parts achieve the longest, most
economically valuable life possible.
A closer examination of the circular economy illustration
reveals that “collection” is the lynch-pin for multiple
steps in the system, specifically Share; Maintain/
Prolong, Reuse/Redistribute, Refurbish/Remanufacture
and Recycle. While different reverse logistics firms
have different capacities and capabilities, a look across
the industry reveals that every reverse logistics firm
contributes to one or more of these activities. In
fact, this illustration neatly captures what the reverse
logistics industry is already doing while highlighting the
implicit challenge of continuing to grow these systems.
Finally, in looking at the four requirements for a circular
consumer electronics system, reverse logistics will be
necessary for products to be loved “by more than one
user” and to ensure that “products and components are
cascaded.”
While individuals can and do sell used consumer
electronics, its not reasonable to expect this to be
the primary way the goal is achieved. Rather, as
demonstrated by multiple consumer electronics OEMs,
such as Acer, Dell and HP, developing reverse systems
that capture product and provide it a second (or third)
life as a refurbished or remanufactured product is not
only possible, but profitable.
However, to assure that products and components are
cascaded – that is, they go from high-end new or lower-
end used to recovered and recycled – reverse systems
are critical to ensure proper collection and redistribution
at every level to maximize the life of the product.
LESSONS FROM REVERSE LOGISTICS
Reverse logistics firms have decades of experience in
collecting, handling, triaging and bringing products back
into the commerce stream. As an industry, the reverse
logistics sector can help accelerate the adoption and
optimization of a circular economy system by sharing
the lessons learned – both successes and challenges –
associated with:
• Collecting and aggregating products
• Analyzing and triaging returned products to

determine if they should be cascaded for another
use or broken down into its component parts
• Finding and maximizing value for cascaded
products
• Maximizing recovery and value of component parts
• Marketing and messaging the value of refurbished
and remanufactured products.
The Reverse Logistics Association (RLA) is a vital platform
for this exchange. By bringing experienced reverse
logistics professionals together with circular economy
theorists and practitioners, the RLA can help assure
critical topics are addressed and explored – making that
information readily available to a larger audience.
Reverse logistics has a fundamental and essential role in
the development of a circular economy. As an industry,
there is an opportunity to engage and work with those
developing circular economy practices to help inform
and educate them on the important lessons we have
learned – and continue to learn.
1 http://www.ncps-care.eu/wp-content/uploads/2016/09/flux_waste.png
2 https://www.ellenmacarthurfoundation.org/circular-economy
3 https://www.ellenmacarthurfoundation.org/circular-economy/overview/
concept
4 https://www.ellenmacarthurfoundation.org/publications/towards-the-
circular-economy-vol-3-accelerating-the-scale-up-across-global-supply-
chains
5 https://www.ellenmacarthurfoundation.org/circular-economy/
interactive-diagram
6 https://www.ellenmacarthurfoundation.org/assets/downloads/Circular-
Consumer-Electronics-2704.pdf
7 https://www.ellenmacarthurfoundation.org/circular-economy/building-
blocks
ABOUT THE AUTHOR
Chris Cloutier is the Director of
Sustainability for CoreCentric Solutions.
Mr. Cloutier has over 20 years’
experience in green and sustainability
issues, including in-depth subject-
matter expertise in waste and resource
utilization and green energy and energy
efficiency. Prior to joining CoreCentric Mr. Cloutier has
worked for and consulted for, Best Buy, Sears Holding,
Grainger, the US EPA, the US DOE, the DesignLights
Consortium and Black Decker, the States of California,
Minnesota, Oregon, Washington and Wisconsin.

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