Reverse Logistics

Topics: Supply chain management, Supply chain, Reverse logistics Pages: 10 (3210 words) Published: March 23, 2013



A Supply Chain Opportunity3
What is Reverse Logistics?3
Case Examples4
Money is Hidden in Returns5
Reverse Logistics Completes the Supply Chain System6
Reverse Logistics and the Supply Chain Maturity Model11
Concluding Case Study Example13
The results were impressive:14

A Supply Chain Opportunity

  Most practitioners have their own understanding of the fundamental processes involved in an extended supply chain network. The novice will tell you it starts upstream with suppliers supplying suppliers, moves through manufacturing and production and goes downstream through distributors or direct to the business customers.  An improvement effort starts within the four walls of a business by drawing a process map and working on product, information and financial flows to improve the key steps in the linkage that will save time, money and use of assets.  The journeyman will go further and explain that a supply chain continues externally, until products and services have been delivered to the end consumer.  System improvement involves order management, planning and distribution, inventory management and effective customer satisfaction.  This counselor knows that supply chain is about bringing the key process steps to best practice and optimized conditions, while receiving high satisfaction ratings from the customers and consumers. The seasoned professional will shake his or her head and calmly explain that the journey is not ended until the products and services delivered have been accepted.  If there is dissatisfaction with the results of the supply chain and something is returned, the processing continues.  We stand with those who favor this extended enterprise view of supply chain, which results in the total satisfaction of the end consumer.  There is a great opportunity in that sense, to focus on the generally forgotten or too often lower priority area of attention given to finishing the job – going the last few feet in the linkage.  When it comes to completing the end-to-end processing, companies should do two things: * Take the full view and understand the total cost of supply chain, which includes having and dealing with returns  

* Realize the opportunity that an analysis of the return part of the system offers in terms of finding and solving problems, better satisfying customers and consumers, and discovering a way to increase revenues

What is Reverse Logistics?
When considering any area of business as an opportunity for improvement, begin with having an understanding of just what you are trying to change.  What is Reverse Logistics?  The broader concept of logistics is described by The Council of Supply Chain Management Professionals (CSCMP) as:  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 origin to the point of consumption for the purpose of conforming to customer requirements. Wikipedia defines the narrower concept we are considering as: Reverse logistics is the logistics process of removing new or used products from their initial point in a supply chain, such as returns from consumers, over stocked inventory, or outdated merchandise and redistributing them using disposition management rules that will result in maximized value at the end of the item’s useful life.   For our purposes, reverse logistics includes all the activities that are mentioned in the definition above, with the difference that reverse logistics encompasses all of these activities as they operate in reverse.  Therefore, according to authorities Dr. Dale S. Rogers and Dr. Ronald S Tibben-Lembke, reverse logistics becomes: The process of planning, implementing, and controlling the efficient, cost effective flow of raw materials,...
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