Scope, Opportunities and Barriers in Adoption of Reverse Logistics in Food Processing Industries

1. Presentation
Scope Opportunities and Barriers of Reverse
Logistics in Food Processing industries
Under the guidance of Presented By
Dr. Anupama Panghal Saurabh Singh
618015

2. Contents
• Definition of Reverse Logistics
• Reasons for Product Return
• Scope of Reverse Logistics in Food Sector
• Reverse Logistics and its effect on firm’s competitiveness in food
processing industries
• Activities involved in Reverse Logistics of food Products
• 5 R’s of Reverse Logistics
 Repairs
 Remanufacture
 Cannibalization
 Refurbish
 Repackaging
 Refilling and reuse
 Recycling and disposal
 Recalls

3. Contents
• Forward and Reverse Logistics in Food supply chain
• Framework of reverse logistics in food processing industries
 Framework of reverse logistics in food and beverage
companies, Nigeria.
 Framework of reverse logistics in food processing industries,
Malaysia.
 Proposed Framework of reverse logistics for Indian food
processing industries.
• Barriers in implementation of reverse logistics
 Strategic barriers
 Economic barriers
 Policy barriers
 Infrastructural barriers
 Market related barriers

4. Contents
• Reverse logistics practices
 IndyfoodDrop.com Initiative
 Maggie Product Recall
 Tesco burger
 Nestle waste management practices
• FSSAI Initiative For Product Recalls

5. • The food loss occurs at each and every stage of supply
chain with different quantities. 20% loss occurs at harvest
stage, 40% of loss occurs at post-harvest stage and
remaining 40% of loss occurs at retail and consumer
stage (FAO).
• The backward flow of food products necessary to reduce
the food waste and smooth flow of logistics operations

6. Reverse logistics
Reverse logistics may be defined
“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.”

7. “The term reverse logistics most often used to refer to the
role of logistics in product returns, recycling, reuse of
materials, waste disposal, and refurbishing, repair and
remanufacturing.”
“The process of planning, implementing and controlling
backward flows of raw materials, in process inventory,
packaging and finished goods, from a manufacturing,
distribution or use point, to a point of recovery or point of
proper disposal.”

8. Source :Association of reverse logistics

9. Scope of Reversed logistics in Processed
food industry
• Reduced food waste: It is estimated by the UN that
nearly 40% of the food produced in India is wasted or
lost.
• Increase Consumer Satisfaction :Proper and timely
return can increase the consumer satisfaction
• Build of Green image company :Proper disposal
channels can build the green image of company.
• Improved customer/ supplier relations
• Decrease in storage cost
• In case of Product recall

10. Reverse logistics effect on firm’s
competitiveness
Reverse Logistics
• Product Re-use
• Remanufacturing
• Waste Product Recycling as
raw materials
• Reuse of parts and
components
• Refilling
• Waste Disposal
Firm Competitive Advantage
•Operational
•Cost
• Delivery & Flexibility
•Market
•Market Share
•Financial
•Sales turnover
•Gross profit

11. Firm Competitive Advantage
• Operational Advantages
• Cost
• Delivery & Flexibility
• Market
• Market Share
• Financial advantages
• Sales turnover
• Gross profit

12. Activities involved in reverse logistics of
food
• Collection of food product
• Inspection
• Sorting the product
• Re-processing
• Redistribution
• Disposal of waste

13. 5 R’s of Reverse Logistics
1. Repairs
If faults seen in the returned products are too severe,
manufacturers identify the fault and then repair, refurbish or
remanufacture the products to a condition that is more like
new. These products are then returned to stock. Or, if
possible, manufactures may use some of the functional
components of these products for reuse .
1. Refurbish
2. Remanufacturing
3. Reuse of component

14. • Refurbishment
Source- www.macrumors.com
• Remanufacturing Reuse of component

15. Repackaging
• Repackaging is for the returned product those are
inspected and no faults are found . Products are simply
repackaged and returned to inventory as soon as
possible. It is realized that the return is not because of
any kind of faults; it could be only because customers
are dissatisfied with the product. However, in case of
minor flaws found, the products are repaired,
reconditioned and repackaged for resale.
www.google.com/imges /packaging

16. Refilling and Reuse
• Reverse logistics is integrated to their chain because of the
reusable nature of packages such as glass bottles, tin /
plastic containers etc.
• In case of soft drinks, the delivery van delivers filled bottles to
retailers and collect. The empty bottles from them for
delivery to the factory.
• No extra transportation costs are involved in the processes
the same delivery van originates and terminates its journey
at the factory where these reusable bottles are refilled for re-
delivery to customers.
Source –www.google.com/images /amulcrates

17. Recycling
• When products reach the end of their life cycle and need to be
scrapped, company look for safe, environment-friendly and cost-
effective ways for disposing them. This could mean approaching
third-party recycling companies to reclaim waste and dispose
assets for them. In electronics industry sees high-tech devices from
which companies are able to retrieve metals like gold, silver,
copper, titanium, etc. This helps in minimizing waste and reducing
costs.
• www.google.com/Images/Foodrecycling

18. Recalls
• Recalls are when product returning involves a defect or
potential hazard that may be subject to government
regulations, reporting requirements or liability concerns. This
is mainly seen in the case of high-tech devices as they are
more prone to faulty electronics, battery problems,
construction issues and other potential hazards. To have
this system in check, you must be sure to have processes in
place to receive, replace, reclaim or resell products. This
will help to save revenues and turn negative customer
experiences to positive ones, and in turn build trust.
Source-www.google.com/images/recall

19. Forward and Reverse Logistics in Food
supply chain

20. Framework of reverse logistics in food and
beverage companies, Nigeria
Source- Empirical study of the effect of reverse logistics objectives on economic
performance of food and beverages companies in Nigeria.
Somuyiwa AO, Adebayo IT (2014)

21. Framework of reverse logistics in food
processing industries, Malaysia
Source- Reverse logistics in food industries: a case study in Malaysia.
Binti NNI, Moeinaddini M, Ghazali JB, Roslan NFB (2016)

22. Proposed Framework of reverse logistics for
Indian food processing industries
Source- Reverse Logistics in Food Processing Industries in India
Sathiyagothai B and Saravanan S(2016)

23. Barriers in Implementation of Reverse Logistics
• Strategic barriers
o Lack of strategic group commitment
o Lack of responsiveness
o Lack of strategic planning
o Revers logistics not integrates with supply chain business planning
o Resistance to change
o Company policy
o Lack of waste management practices
• Economic barriers
o Lack of realized economic profit
o High initial and operating cost
o Lack of investment in RL product storage
o Lack of economies of scale

24. • Policy Barriers
o Lack of Govt. supportive policies on RL
o Customers are not Informed to take back
o Wide informal waste management practices
o Lack of standard green practices for Recycling
o Loop holes in Indian regulation on waste handling
• Infrastructural barriers
o Lack of infrastructural facility (storage, transportation)
o Lack of coordination/collaboration with 3PL Provider
o Lack of system to monitor return
o Lack of forecasting and planning
• Market related barriers
o Uncertain return and demand
o Lack of support of SC partners
o Uncertain quality and quantity of return
o Customer perception about RL

25. IndyfoodDrop.com
• IndyfoodDrop.com will help truckers in Indiana (U.S.)
redirect food that had been rejected (substandard but
safe for consumption) by local grocers and distributors
and get it into the mouths of hungry people .
Framework of Reverse logistics process
Rejected
Food
Trucker
contact
on
website
Find
nearest
delivery
centre
Deliver to
nearest
centre
Tax and
other
Benefits
Food
delivered
to hungry
people

26. Maggie Product recall
FSSAI issue the
notice of recall
Nestle appoint new
supply chain
manger and initiate
recall process
Collected the
38000tonnes
of Maggi
Dispose the
Maggi in
cement plant
A storm struck in 2014 when a laboratory in Gorakhpur proved that
samples of Maggi contained lead and monosodium glutamate1
(MSG) much beyond the permissible limit. Nestle India challenged
this decision but the results by Kolkata central laboratory in 2015
corroborated the previous results. Consequently, several state
governments began testing samples and banned the product.

27. Tesco Burger Scandal
FSAI issues the notice
for ban Tesco burger
Tesco collected
the 1M pieces
Disposed all the
packets through
landfill
Company loses
94% of market
share
• Food recall plan
• Traceability

28. Nestle Waste Management Practices
• Nestle India has started a 'MAGGI Wrappers return' program
in which consumers can get a free packet of Maggi. Under
the offer, for every ten empty wrappers of MAGGI noodle
customers return, they will get a free Maggi Noodles packet
• The project is running in Dehradun and Mussoorie on a pilot
basis
• Currently, Nestle is working with nearly 250 retailers to follow
this through.

29. FSSAI Initiative For Product Recalls
• Licencing of FBO
o Regulation 7a
o Food recall plan