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1. REVERSE LOGISTICS
Presented By,
Atul Singh
12MT07IND004

2. Reverse logistics:
• Reverse Logistics Is:
The process of planning, implementing, and controlling the
efficient, cost effective flow of raw materials, in-process inventory,
finished goods and related information from the point of
consumption to the point of origin for the purpose of recapturing
value or proper disposal.

3. Reverse Logistics - What is it?
The Army’s Definition
The return of serviceable supplies that are surplus to the needs of
the unit or unserviceable and in need of rebuild or remanufacturing
to return the item to a serviceable status.
The Commercial Perspective
Reverse Logistics is the process of moving products from their typical
final destination to another point, for the purpose of capturing value
otherwise unavailable, or for the proper disposal of the products.

6. WHY REVERSE LOGISTICS TAKE PLACE…..
• Products that have failed, but can be repaired or reused.
• Products that are obsolete but still have value.
• Unsold products from retailers.
• Recalled products.
• Parts repaired in the field that still have value.
• Items that have secondary usage, i.e. items that have another usage after they
have exhausted their original use.
• Waste that must be accounted for and disposed of or used for energy production.
• Containers that must be returned to their origin or some sort of consolidation
facility.

7. Reverse Logistics Activities
Handling of returned merchandise
• Damage
• Seasonal inventory
• Resell via outlet
• Salvage of outdated products
• Stock–balancing returns
Recycling and reuse
• Material reuse
• Remanufacturing / refurbishing
Hazardous materials disposition

8. Impacts of Reverse Logistics
• Forecasting
• Carrying costs
• Processing costs
• Warehousing
• Distribution
• Transportation
• Personnel
• Marketing

9. Source: http://www.rlmagazine.com/img/edition04_ups.jpg
The Reverse Logistics Process

10. Key Reverse Logistics Management Element
1. Gatekeeping
“The screening of defective and unwarranted returned merchandise at the entry
point into the reverse logistics process”

11. Key Reverse Logistics Management Element
2. Compacting Disposition Cycle Time
 Important to know beforehand what to do with returned goods
 When material often comes back in to a distribution center, it is not clear whether the
items are: defective, can be reused, or refurbished, or need to be sent to a landfill
 The challenge of running a distribution system in forward is difficult – employees have
difficulty making decisions when the decision rules are not clearly stated and exceptions
are often made
Goal: to reduce the amount of time to figure out what to do with returned products once
they arrive.

12. Key Reverse Logistics Management Element
3. Reverse Logistics Information Systems
One of the most serious problems that the companies face in the execution of a reverse
logistics is the dearth of a good information systems. To work well, a flexible reverse
logistics information system is required.
 The system should create a database at store level so that the retailer can begin tracking returned product and
follow it all the way back through the supply chain
 Information system should also include detailed information programs about important reverse logistics
measurements, such as returns rates, recovery rates, and returns inventory turnover
 Useful tools such as radio frequency (RF) are helpful. New innovations such as two-dimensional bar code and
radio frequency identification license plates (RFID) may soon be in use extensively

13. Key Reverse Logistics Management Element
4. Centralized Return Centers (CRC)
• Consistency in disposition decisions and minimizations
of errors
• Space saving advantage for retailers who want to
dedicate as much of the shop floor to salable
merchandise as possible
• Labor cost reduction – due to specialization, CRC
employees can typically handle returns more efficiently
than retail clerks can
• Transportation cost reduction – empty truckloads used
to pick up return merchandise
• A selling tool – the easy disposition of returned items
represent can be an appealing service to retailers, and
may be a deal-maker for obtaining or retaining
customers
• Faster disposition times – it allows the company to
obtain higher credits and refunds stay idle for smaller
periods of time, thus losing less value
• Easier to identify trends in returns – an advantage to
manufacturer who can detect and fix quality problems
sooner than if these returns were handled entirely by
customer service personnel

14. Key Reverse Logistics Management Element
5. Zero Returns
 A program where the company in question does not accept returns from its customers. Rather, it gives the
retailer an allowable return rate, and proposes guidelines as to the proper disposition of the items. Such policies are
usually accompanied by discounts for the retailer
 It passes the returns responsibility onto the retailer, while reducing costs for the manufacturer or distributor
 The drawback: the manufacturer losses control over its merchandise

15. Key Reverse Logistics Management Element
6. Remanufacture and Refurbishment
 Five categories of remanufacture and refurbishment:
The advantage to using reworked parts is felt through cost saving
1) Repair
2) Refurbishing
3) Remanufacturing
Make the product reusable for its intended
purpose
Retrieving reusable parts from old or
broken products
4) Cannibalization
Reusing parts of products for different
purpose
5) Recycling

16. Types of Decisions
• Strategic
• Must include reverse flow recovery path in network
• Must consider costs related to forward and reverse channels that returned material travel through
• Location of plants and warehouses for recovery
• Ex.- collection points and remanufacturing plants.
• Tactical
• Integration of return flows with forward flows.
• Combining or separating return flow goods with forward flow?
• Isolating forward goods from reverse goods in warehouses to prevent shipping errors?
• Designated holding areas, “QA Jail”
• Deciding when to use new or recycled parts?
• Organization of labor?
• When should products be repaired?
• Repair, Scrap, Send back to OEM
• Operational
• Production Scheduling
• Assignment of Labor
• Disassembly and reassembly

17. REVERSE LOGISTICS CHALLENGES
• Retailer – Manufacturer Conflict
• Inefficiencies that lengthen the time for processing returns:
 Condition of the item
 Value of the item
 Timeliness of response
• They have to develop a working partnership to derive mutual benefit.
 Problem Return Symptoms
o Lack of information about the process.
o If you aren’t measuring it, you aren’t
managing it.

18. REVERSE LOGISTICS CHALLENGES
• Cause and Effect
• Poor data collection leads to uncertainty about return causes.
• Improving the return process decreases costs.
• Being able to see defective products and to track return issues.

19. BARRIERS TO GOOD REVERSE LOGISTICS
• Numerous barriers to good reverse logistics exist
• Management inattention and the lack of importance of reverse logistics.
• Corporate strategy for handling returns and non-salable items.
• Legal issues do not appear to be a major problem.
Companies can not continue to
overlook the necessity of good
reverse logistics management.

20. Application in Industries
1. Publishing Industry
2. Computer / Electronic Industry
3. Automotive Industry
4. Retail Industry

21. Forward vs. Reverse Logistics

22. CONCLUSIONS
• More firms will give considerable attention on reverse logistics
• Efficient handling and disposition of returned product can make a competitive difference.
• Excellent reverse logistics practices add to the company’s bottom line.
 Aspects to reduce the cost of reverse logistics:
 Improved Gatekeeping technology
 Partial returns credit
 Earlier disposition decisions
 Faster processing / shorter cycle times
 Better data management

23. THANK YOU