Reverse Logistics As An Integral Part Of Supply Chain Management. Essa

Reverse Logistics As An Integral Part Of Supply Chain Management. TABLE OF CONTENTS 1.Introduction 2 - What is reverse logistics? - Why reverse logistics is so important? 2. Body 4 - Components - International Reverse Logistics - Outsourcing 3. Conclusion 11 References 12 Introduction Most of us think of logistics as a one-way street. Products are manufactured, packaged, stored in a warehouse, sold, and then shipped off to the customer ... end of story. Yet for many logistics managers today, that's not the end of the story. In addition to managing outbound goods, they also are responsible for reverse logistics--the flow of returned goods and packaging, including customer service and final disposition of returned items. The need to manage waste materials and returned goods is growing in all kinds of industries. Today, companies like Xerox, Eastman Kodak, Mobil, Home Depot, and Ethan Allen Furniture - to name just a few - have recycling programs that meet the needs of their individual industries. There are many reasons for the explosive growth of what's come to be known as reverse logistics over the past five years or so. The most prominent is increasing public awareness of the social costs of excess waste. A large-scale recycling program, therefore, generates goodwill among consumers and industrial customers. As support for recycling grows, moreover, companies want to be perceived as good citizens that are committed to protecting the environment. Another important reason is the need to control costs. Frequently, manufacturers treat recovery of products and packaging as an afterthought. A well-managed reverse-logistics program, however, can bring enormous savings in inventory-carrying, transportation , and waste-disposal costs. For these and other reasons, more and more companies are launching reverse-logistics programs today. Unfortunately, it's often assumed that reverse logistics is simply a matter of reversing the outbound distribution process. In fact, recycling and returns management have their own unique and complex issues that affect logistics operations. A brief overview of those issues highlights the five main areas you should consider before starting a reverse-logistics program. A related issue is what kind of resources you are willing to commit to a reverse-logistics program. The obvious answer is that the level of potential benefits will influence how much a company will invest in such a program. Too often, though, companies shortchange themselves by failing to devote sufficient time, money, and personnel to the project. A lot of times, [reverse logistics] becomes a side job for somebody. It's not their focus or a high priority, says Cindie Vaughan, supervisor of reverse logistics for Consolidated Freightways. If no one is proactively managing the process, it's bound to result in higher costs and missed opportunities for savings and profits. A solution for many companies that have limited resources for reverse logistics is outsourcing that function to third parties or transportation companies. It's up to the shipper, though, to examine the cost and service benefits, then decide how much of the process should be outsourced. As with any outsourcing decision, it's a matter of being able to focus on your core competencies and freeing up your people to work on products rather than expend your assets on [reverse logistics], suggests Brett Chyatte, senior marketing specialist for reverse logistics at Federal Express. Components The primary components of the reverse-logistics operation are retrieval, transportation, and disposition. The retrieval stage deals with where the waste or products should be picked up and by whom. Much depends on the nature of the item being returned; if it's clothing, for example, a carrier can handle all of the pickup and documentation tasks at the consumer's door. If, on the other hand, the items are oversized, heavy, hazardous, or very delicate, special training may be necessary for both customers and carriers. Burnham, for example, dismantles photocopiers for several customers that sell or lease the reconditioned machines. Drivers are trained to remove internal components that could cause damage in transit, protect glass, secure all moving parts, and pack them for transportation. Hazardous materials, meanwhile, must be flawlessly handled, but field locations and distributors may not have the necessary expertise. Michael LeMirande, business development manager for Redwood Systems, says he often tutors auto dealers in how to manage returns of such items as engines and transmissions. The battery and most fluids in automobiles are classified as hazardous, so there are specific procedures for