1 Introducing logistics

1.1 Definition of logistics1.2 Logistics systems1.3 Reverse logistics1.4 Integrated logistics1.5 Objectives of logistics1.6 Management of the logistics system1.7 Case study: The Pfizer logistics system1.8 Questions and problems

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 1 / 6

1 Introducing logistics Reverse logistics

Life cycle of a product

- Does not finish with its delivery to the end consumer;- product can become:

> obsolete;> damaged;> nonfunctional.

- product must therefore:> be discarded;> sent back to its origin for possible repair.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 2 / 6

1 Introducing logistics Reverse logistics

Life cycle of a product

- Does not finish with its delivery to the end consumer;- product can become:

> obsolete;> damaged;> nonfunctional.

- product must therefore:> be discarded;> sent back to its origin for possible repair.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 2 / 6

1 Introducing logistics Reverse logistics

Life cycle of a product

- Does not finish with its delivery to the end consumer;- product can become:

> obsolete;> damaged;> nonfunctional.

- product must therefore:> be discarded;> sent back to its origin for possible repair.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 2 / 6

1 Introducing logistics Reverse logistics

Life cycle of a product

- Does not finish with its delivery to the end consumer;- product can become:

> obsolete;> damaged;> nonfunctional.

- product must therefore:> be discarded;> sent back to its origin for possible repair.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 2 / 6

1 Introducing logistics Reverse logistics

Life cycle of a product

- Does not finish with its delivery to the end consumer;- product can become:

> obsolete;> damaged;> nonfunctional.

- product must therefore:> be discarded;> sent back to its origin for possible repair.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 2 / 6

1 Introducing logistics Reverse logistics

Life cycle of a product

- Does not finish with its delivery to the end consumer;- product can become:

> obsolete;> damaged;> nonfunctional.

- product must therefore:> be discarded;> sent back to its origin for possible repair.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 2 / 6

1 Introducing logistics Reverse logistics

Life cycle of a product

- Does not finish with its delivery to the end consumer;- product can become:

> obsolete;> damaged;> nonfunctional.

- product must therefore:> be discarded;> sent back to its origin for possible repair.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 2 / 6

1 Introducing logistics Reverse logistics

Life cycle of a product

- Does not finish with its delivery to the end consumer;- product can become:

> obsolete;> damaged;> nonfunctional.

- product must therefore:> be discarded;> sent back to its origin for possible repair.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 2 / 6

1 Introducing logistics Reverse logistics

Reverse logistics (1/4)

- Sector of logistics dealing with product flows (unsold itemsor returns) from their final destination to the initial producer,or to a facility dedicated to their treatment;

- examples of reverse logistics’ functional activities:> control in the facilities to avoid the unjustified return of

products which are only apparently nonfunctional;> recovering and collecting unsold items;> transporting returns in dumps or disposal centres, or

operating in secondary markets.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 6

1 Introducing logistics Reverse logistics

Reverse logistics (1/4)

- Sector of logistics dealing with product flows (unsold itemsor returns) from their final destination to the initial producer,or to a facility dedicated to their treatment;

- examples of reverse logistics’ functional activities:> control in the facilities to avoid the unjustified return of

products which are only apparently nonfunctional;> recovering and collecting unsold items;> transporting returns in dumps or disposal centres, or

operating in secondary markets.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 6

1 Introducing logistics Reverse logistics

Reverse logistics (1/4)

- Sector of logistics dealing with product flows (unsold itemsor returns) from their final destination to the initial producer,or to a facility dedicated to their treatment;

- examples of reverse logistics’ functional activities:> control in the facilities to avoid the unjustified return of

products which are only apparently nonfunctional;> recovering and collecting unsold items;> transporting returns in dumps or disposal centres, or

operating in secondary markets.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 6

1 Introducing logistics Reverse logistics

Reverse logistics (1/4)

- Sector of logistics dealing with product flows (unsold itemsor returns) from their final destination to the initial producer,or to a facility dedicated to their treatment;

- examples of reverse logistics’ functional activities:> control in the facilities to avoid the unjustified return of

products which are only apparently nonfunctional;> recovering and collecting unsold items;> transporting returns in dumps or disposal centres, or

operating in secondary markets.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 6

1 Introducing logistics Reverse logistics

Reverse logistics (1/4)

- Sector of logistics dealing with product flows (unsold itemsor returns) from their final destination to the initial producer,or to a facility dedicated to their treatment;

- examples of reverse logistics’ functional activities:> control in the facilities to avoid the unjustified return of

products which are only apparently nonfunctional;> recovering and collecting unsold items;> transporting returns in dumps or disposal centres, or

operating in secondary markets.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 6

1 Introducing logistics Reverse logistics

Reverse logistics (1/4)

- Sector of logistics dealing with product flows (unsold itemsor returns) from their final destination to the initial producer,or to a facility dedicated to their treatment;

- examples of reverse logistics’ functional activities:> control in the facilities to avoid the unjustified return of

products which are only apparently nonfunctional;> recovering and collecting unsold items;> transporting returns in dumps or disposal centres, or

operating in secondary markets.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 6

1 Introducing logistics Reverse logistics

Reverse logistics (1/4)

- Sector of logistics dealing with product flows (unsold itemsor returns) from their final destination to the initial producer,or to a facility dedicated to their treatment;

- examples of reverse logistics’ functional activities:> control in the facilities to avoid the unjustified return of

products which are only apparently nonfunctional;> recovering and collecting unsold items;> transporting returns in dumps or disposal centres, or

operating in secondary markets.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 3 / 6

1 Introducing logistics Reverse logistics

Reverse logistics (2/4)

Supplier

Recyclingcompany

Manufacturer

Otherpurchaser

Collectionor disposalcompany

Customer

Direct link

Reverse link

Supplier

Customer

Customer

CustomerDump,

incinerator orsecondary market

Distributoror retailer

Figure 1: Example of a reverse logistics system.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 4 / 6

1 Introducing logistics Reverse logistics

Reverse logistics (3/4)

Figure 1- schematization of the flows of materials in a logistics

system both direct and reverse;- required connections of the original network and specific

reverse links;- possibility of regaining value from products that have

exhausted their life cycle.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 5 / 6

1 Introducing logistics Reverse logistics

Reverse logistics (3/4)

Figure 1- schematization of the flows of materials in a logistics

system both direct and reverse;- required connections of the original network and specific

reverse links;- possibility of regaining value from products that have

exhausted their life cycle.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 5 / 6

1 Introducing logistics Reverse logistics

Reverse logistics (3/4)

Figure 1- schematization of the flows of materials in a logistics

system both direct and reverse;- required connections of the original network and specific

reverse links;- possibility of regaining value from products that have

exhausted their life cycle.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 5 / 6

1 Introducing logistics Reverse logistics

Reverse logistics (3/4)

Figure 1- schematization of the flows of materials in a logistics

system both direct and reverse;- required connections of the original network and specific

reverse links;- possibility of regaining value from products that have

exhausted their life cycle.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 5 / 6

1 Introducing logistics Reverse logistics

Reverse logistics (4/4)

MediaMarktA customer buys a lemon squeezer from a sales point of theGerman chain MediaMarkt which he subsequently finds to bedefective. The customer takes it back to the sales point, whichverifies the real defect of the lemon squeezer and thensubstitutes it with a new, functioning one. The retailer returnsthe defective lemon squeezer to the appropriate collectioncentre. This centre credits the sales point with a lemonsqueezer, and therefore a debit to the manufacturer is created.The lemon squeezer is sent to the manufacturer who repairs itand sends it to a secondary market. In this way, themanufacturer obtains an added value on the defective product.

G. Ghiani, G. Laporte, R. Musmanno Introduction to Logistics System Management © John Wiley & Sons, Ltd 6 / 6