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8/13/2019 EBC6230 Reverse Logistics
1/23
E-Supply Chain Technologies & Applications
EBC 6230Winter Session 2014
Reverse Logistics
Title : --------------------------------------------------
Submitted toDr. Mohamed Baymout
Prepared byHassan Kiyani 7537640Mohsin Pyar Ali 7512480Naveed Maknojia 7563834Priyanka Jain 7150110Raheel Rehmatullah 7506987
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Agenda
Introduction History
Definition
Forward vs. Backward Logistics
Reason for Returns
Reverse Logistics Process E-Reverse Logistics
Effective Return Management
Challenges
Case Studies
Conclusion
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Introduction [1]
According to research
Gain recognition in both
Research Field
Practical Field
But still since from the last decade.
40% viewed as Headache
34.3% have no right system
33% companies policy inhibited to do
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Introduction: (Cont..)
According to other researches
Reverse Logistics has a great potential
Improve Customer Relation
Improve Company Performance
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History of Reverse Logistics: [1]
Few important events
1872 Montgomery Wards (American
Furniture Shop)
Federal Republic of Germany in 1991 passed
recycling ordinances
In 2001, the European Union
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Reverse Logistics?
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 consumption to the point of origin for the
purpose of recapturing value or proper
disposal. [2]
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Forward vs. Backward
Logistics [3]
Factors Forward Logistics Backward Logistics
Forecasting Straightforward Difficult
Distribution One to many Many to One
Product Packaging Uniform Damage
Product quality Uniform Inconsistent
Visibility of Cost High Low
Destination/routing Clear Unclear
Pricing Uniform Many factors
Market Straightforward Complex
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Reasons of Return
Customer not satisfied:When customer are not satisfied with the product or its notmeet their requirements.
Installation and usage problems:Common in the computer industry where in some categoriessuch as CD-ROM drives get return.
Warranty claims:
Customers return the product because they find any defectiveparts in it and they can return that within a predefined period.
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Reasons of Return (Cont)
Faulty order processing:
The customers or retailer experience incomplete
shipment, incorrect quantities, products and late
delivery.
Commercial return:
products may be sent back due to mismatches in
demand and supply in terms of timing or product
quality
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Return Analysis And Reason
Return % In Various IndustriesVarious Reason Of return
http://www.mbaskool.com/business-articles/operations/108-reverse-logistics.html
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Reverse Logistics Process
Direct
Recovery
Repair
Refurbishing
Remanufacturing
Retrieval
Recycling
Collection
Inspection
Selecting
Sorting
(Re-)
processing
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Reverse flows in the supply chain
Raw MaterialPart
FabricationModule
Subassembly
Remanufacture
Part Assembly Distribution
Reuse
User
Repair
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http://www.supplychain247.com/article/why_reverse_logistics_needs_to_become_a_core_competency
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E-Reverse Logistics
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Effective returns management [4][1]
Improve Return Gatekeeping:Control the return by improve screening & scanning of productsat door level
Outsourcing:
Company can consider help from a third party to handle andmanage the reverse flows, for example DHL FedEx and UPS etc.
Return centres:
The strategic choice of location and facility layout of return
centres to maximize value and cut costs.
Eff i
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Effective returns management(Contd.)
Asset recovery:To maximize returns and minimizes costs by proper disposal ofreturned items
Reducing reverse cycle times:
The company is to improve value recapture by reducingthe time for returns.
Reverse logistic information system:
Information systems to improve visibility of productsreduce uncertainty and maximize economics of scale bydeveloping/adopting an efficient information system.
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Effective returns management(Contd.)
Return products for secondary markets:Negotiate the best price for products being returnedand resold.
Financial Management:To developing guidelines to properly account forcharges against sales and related financial issueswhen products are returned by customers.
Effective return policies and procedures:
Returns approval policies help to ensure effectivegate keeping
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Challenges in Reverse
Logistics
3 perspectives of reverse logistics: Disassembling of returned product
Storage
Transportation
Main challenges in Reverse Logistics Processes Quantity
Time
Quality
This lack of control regarding above mentioned issues are: Reflection of the uncertain life of a product
Product life cycle stage and the rate of technological change
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Case Study # 1: WEEE
CHALLENGES OF WEEE ON REVERSE LOGISTICS:
A CASE STUDY ON A COLLECTION NETWORK IN FINLAND
Source: Published in Proceedings of Logistics Research Network Annual Conference 2006, 6th-8th September 2006, Newcastle upon
Tyne, UK. Eds. Bourlakis, M .et. al. The Chartered Institute of Logistics and Transport (UK)
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Challenge: No proper system for reverse logistics
Solution:
Introduction of laser technology (Printer)
Result:
Expected savings of about $ 900,000 in the first
year by eliminating parts testing.
Case Study # 2: Lexmark
Source:Lexmark and Lexmark with diamond design are trademarks of Lexmark International, Inc. registered in the United States and/or other
countries. All other trademarks are the property of their respective owners. 2007 Lexmark International, Inc. 740 W. New Circle Rd., Lexington, KY40550
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Conclusion
While majority of companies does not consider reverse logistics as much important as
compared to other elements for the success of company, but few firms have begun to realize
that reverse logistics should be considered as strategic part of organization due to its
importance and value driven impacts on long term goals.
To be competitive in market, companies must have to focus on their reverse logistic methods
and consider it as a part of strategic issues.
Nowadays reverse logistic is not only for competitive advantage by reselling products to
secondary market or by improving reverse logistic processes for companies to reuse
products. But also for competitive advantage in market, by providing customers maximum
satisfaction with the help of your great return policy.
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Reference:
1. Reverse logistics Matters: Impact of resource commitment on reverse logistics andcustomer loyalty (Master Thesis). University of Maastricht Faculty of Business
Administration Master Science of International Business Concentration Logistics
Supervisor: Dr. Lieven Quintens
2. Going Backwards: Reverse Logistics Trends and Practices University of Nevada, Reno
Center for Logistics Management. Dr. Dale S. Rogers, Dr. Ronald S. Tibben-Lembke,
1998, Reverse Logistics Executive Council
3. http://www.slideshare.net/anandsubramaniam/reverse-logistics-15793414. Reverse Logistics Case study comparison between an electronic and a fashion
organization by Martin Creutz & Fredrik Larsson in 2012-05-14
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Thanks