Reverse Logistics
ski...@auburn.edu
Saw the discussion thread and thought I might throw out a topic.
Reverse logistics is many things to many people and is often confused
with other topics. What is the 'common' definition (if there is one),
and what are the most important issues for an organization that would
like to set up a formal reverse logistics program?
Long question, hopefully worthwhile for discussion.
Skipper
Logistizian
that has come back. The return from an end user or from the next link
in the Supply Chain is often forgotten as a part of the supply chain.
It is not as often forgotten when the discussions are couched in terms
of "total life cylcle". With greater and greater environmental
requirements this will become more and more important as manufacturers
of electronics have learned. It also provides new business
opportunities. Companies like Inmetco are profiting handsomely.
http://www.inmetco.com/services_battery.htm
The most important issues, Cost, Cycle time, visibility.
> Skipper`
Logistics Conduit
You are right about Reverse Logistics often being confused with other
topics. Even the definition of Reverse Logistics on wikepedia was
questioned a few days ago by our group.
I guess we sometimes try and include as much as possible in our
definition of our given area in order to have a much bigger 'scope'.
Logistizian,
Welcome to the group and thanks for your input. Yes, environmental
concerns are certainly a factor in this area being given more focus.
Overall getting our Reverse Logistics process right and ensuring these
are clear to both internal and external stakeholders is a primary
ingredient for success. Also, actually measuring costs of the Reverse
Logistics pipeline (which should not necessarily be considered
seperate from our overall Supply Chain) will help us focus on the
importance of this process.
There have been quite a few posts about this topic on this forum in
the past.
ED
Stephanie McKern
In terms of issues the first one that usually is raised is cost - as (hopefully) there are fewer returns than outbound distribution volumes. This, however, causes an economy of scale problem with regards to cost.
As was highlighted in a previous discussion, some organisations choose to use their outward distribution centres to handle inbound reverse logistics, but some organisations have problems with this, due to damaged or obsolete stock sometimes being confused with regular receipts and becoming part of regular, stocked inventory.
In terms of overcoming this, customer education on how to label incoming returns could be one possible solution, but then there is the issue of priority (as highlighted in this article on Returns Processing). As outgoing inventory is sales and therefore 'income producing', there is then an emphasis on receiving saleable stock as a priority, and returns processing takes a backseat in the receiving department. However, then issues of customer service arise where reputations (and therefore future sales) can be harmed if this is not addressed. So education does not only extend to customers and supply chain partners, but also to internal personnel so that they understand the impact of slowing down the returns process.
These are just a few issues that I can think of off the top of my head. Any others? Dare I ask if anyone has ways their companies (or past companies) have addressed them that they are willing to share?
Regards,
Stephanie McKern
--
Thanks and regards,
Stephanie McKern
The Australian Logistics Academy Pty Ltd
ABN 019 081 175 626
http://www.aust-logistics.com/
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Craig Plowden
Hello All,
I have recently started a company specialising in Reverse Logistics. This is a relatively new concept in South Africa and we are finding it extremely difficult to convince and educate potential customers of the importance of the return cycle and the importance of extracting value from the products that are being returned.
One definition of Reverse Logistics states as follows:
“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”
The South African retail market is very unique when compared to the rest of the world, where the retailers and wholesalers often dictate terms and conditions to the manufacturers and principles who sell their products through the wholesale and retail stores. This “dictatorship” leads to a large amount of product being returned from the various stores and the manufacturers are left with no option but to credit the wholesaler/retailer for the returned product. The process of collecting the returned product is not always carried out by the distribution service provider but also by manufacturer reps and sales agents. This in turn leads to product “going missing” before it is checked back into inventory and it also results in bad stock which is damaged or no longer saleable being checked back into saleable inventory.
Very few manufacturers have any idea of the total cost of returns because it has not really been a focus of the supply chain until now. Many manufacturers are prepared to look at more effective and efficient ways of reducing both returns and the cost thereof but are not prepared to pay for this exercise or operation.
While there may be a number of solutions to the returns process, we feel we have a fairly solid solution. It is imperative that whatever value is left in the returned product is extracted, which will offset the cost of the return in the first place. If there is no longer any value in the returned product, or brand policy dictates destruction of the product, then the product must be destroyed with the relevant certification. However, as Stephanie says, the education process is a terribly difficult and frustrating one.
Regards,
Craig Plowden
Managing Director
===========================
Reverse Logistics (Pty) Ltd
3 Eriksen Close, Norscot, Fourways
Tel: +27 11 467 9877
Cell: +27 83 378 4514
===========================
sohel mahboob
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Raymon
There have been some excellent insights being shared today and from
such a diverse group as well.
Please keep those posts coming and recommend this forum to your
friends if you think they too will benefit.
Regards / Raymon
On Oct 18, 3:47 pm, sohel mahboob <inan3...@yahoo.com> wrote:
> http://www.thedailystar.net/story.php?nid=7695
>
> Dear Sir,
> The above link is my write up in the local daily in Bangladesh. I tried to call you in your number but the VOIP from Abidjan seems to be in a bit of a problem. I shall call you or try to call you again soon. I got a lot of response to process the markleting of the Bangladehi RMG in Africa and I am sure we can work it out nicely to our mutual benefit. Tell me what you think.
>
> Sohel
>
> ABN 019 081 175 626http://www.aust-logistics.com/
daniel_...@singnet.com.sg
Reverse Logistics is one of my "pet" topics. Came across this subject
in 1990 when I was working with Box Global handling a customer called
InFocus - the projector company.
We set up the REMAN section to cover 2 key areas as follows:
1) Warranty Issues
All projectors manufactured by InFocus comes with an international
warranty where the lamps are guranteed to work for 3K hours. The
cheapest model for lamp cost $350/= a piece. What InFocus did is that
each lamp comes imbedded with a chip that captures the number of hours
the lamp was used. If the lamp "blow out" before the 3K hrs, it's
replaced FOC. Hence, prevention of abuse is one key issue. InFocus
would "supply" all distributors/repairers with Machine Model, Serial
numbers and the lamp serial numbers. These numbers are updated when a
lamp is changed.
2) Improvement through R&D
InFocus spent a tidy sum on transportation (usually via DHL)
recovering these lamps and sending it back to their main R&D dept. in
US. The engineers there will study the reason for the failure and they
came up with improvements. They were able to develop smaller,
brighter, and longer lasting lamps through these studies. Their most
famous model is the M3 model which is about the size of half an A4
paper and about 2 inches thick.
InFocus's bosses have the vision to anticipate the importance of
reverse logistics. On one hand, the end users are taken care of and
the other, future improvement to their ptoducts. Most manufacturers
would not be bothered with this.
I'm now working in the Pharmaceutical industry; reverse logistics
plays an important role as well. One key question is the disposal of
medicine/poisons/drugs that has expired. Great importance is placed by
Pharma Giants on getting the products sold befor ethe expiry dates -
but there is little or no consideration as to what is done after the
product had expired. I'm doing a paper on this looking at the angle of
ethics.
Will appreciate any inputs. Thanks in advance.
Regards.
Sherwood
Logistics Conduit
You are right in a sense - there is not much being done in the area of
return of pharmaceuticals to the manufacturer or distributor after it
has expired if you are looking at Asia. Perhaps also it is not as well
documented.
In the US for example, companies like GENCO systems have this as an
area of speciality - http://www.capitalreturns.com/.
More 'mainstream' providers like UPS-SCS have this as part of their
service offering as well so it is not unheard off.
>From an ethics perspective I am guessing that you are looking at the
disposal of these returned items? Is this what you are writing a paper
on?
ED
Raymon
Getting specific data - facts and figures, from an ethics
perspective, may be quite daunting considering the implications.
ED however is right and I believe that we can get organisations like
UPS-SCS (amongst others) to provide input.
Raymon
On Oct 23, 9:50 pm, Logistics Conduit <e...@lscms.org> wrote:
> Dear Sherwood,
> You are right in a sense - there is not much being done in the area of
> return of pharmaceuticals to the manufacturer or distributor after it
> has expired if you are looking at Asia. Perhaps also it is not as well
> documented.
> In the US for example, companies like GENCO systems have this as an
> area of speciality -http://www.capitalreturns.com/.