Reverse Logistic

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Recovering Lost Profits by Improving

By Curtis Greve and Jerry Davis, Commissioned by UPS

Table of Contents
About this Report Executive Summary Impacting the Bottom Line The Reverse Logistics Spectrum Impacts and Risks for High-Tech Companies Reselling in the Secondary Market Rare Materials Reclamation Avoiding the Risks of Regulation A Balanced Return Policy can Grow Revenue Exchanges and Repairs in the Reverse Logistics Pipeline Developing a Reverse Logistics Program Getting Started with the Essentials Tapping into 3rd Party Logistics Benefits Key Recommendations Reverse Logistics: A Self Analysis for Your Company Appendix 3 4 5 6 8 8 9 9 10 11 12 12 13 14 15 17

Recovering Lost Profits by Improving Reverse Logistics

About This Report
— By Carla Huang, UPS Director of Corporate Marketing for the High-Tech Industry

As a global leader in supply chain logistics, UPS has a long history of working with high-tech companies, from small component suppliers to global finished-goods powerhouses With so much visibility into this market, we’ve noticed that companies have varying degrees of success managing reverse logistics—as well as varying degrees of missed opportunities when not paying attention to this part of the total supply chain In our experiences, reverse logistics is one of the most often overlooked elements of the complete operations cycle These experiences and observations are precisely why we commissioned this paper: we want to highlight how high-tech companies can realize near- and long-term benefits by taking control of their reverse logistics supply chain and making improvements – no matter how small We realize the perception that returns are a necessary evil to be avoided at all costs Yet they present vast opportunity Companies adept at reverse logistics treat returns as another form of inbound shipping, with processes and plans that allow them to drive top-line sales and bottom-line profits from savings In other words, they understand that returns are always going to be a part of their business and look for every possible way to leverage reverse logistics to extract the hidden value Because high-tech companies have multiple opportunities for reverse logistics to impact the supply chain, they do not have to re-engineer their entire process to achieve tangible results We’ve helped customers achieve greater sales through resale, and we’ve seen customers realize savings by reclaiming parts for their operations While a greater investment in reverse logistics will yield more benefits, we’re confident that many companies can experience significant improvements if they take just a few of the steps outlined in this paper If you are still skeptical about the role reverse logistics can play, think about your own experiences as a consumer and a customer Would you prefer to do business with a company that has an efficient returns process with established policies? Would you rather buy from vendors that give you flexibility to return products without penalties and provide a quick replacement or refund? If you recognize that your organization could improve in these areas, we encourage you to review the reverse logistics selfanalysis featured in this paper Determining the current state of your reverse logistics capabilities is the first step on your way to creating better business processes, more satisfied customers and future success 3

Curtis Greve and Jerry Davis

Recovering Lost Profits by Improving Reverse Logistics

Executive Summary
It is no surprise that almost every company is looking for ways to increase sales, decrease costs and reduce risks. But in such tough economic times, the easy cuts have been made and all of the simple process improvements have been put in place. Enter reverse logistics, an often overlooked process that can help companies reduce waste and improve profits. Reverse logistics is defined as the processes of receiving returned components or products for the purpose of...
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