E-Supply Chain Technologies & Applications EBC 6230 Winter Session 2014

Reverse Logistics Title : -------------------------------------------------Submitted to:

Dr. Mohamed Baymout

Prepared by:
Hassan Kiyani 7537640 Mohsin Pyar Ali 7512480 Naveed Maknojia 7563834 Priyanka Jain 7150110 Raheel Rehmatullah 7506987

Agenda
Introduction History Definition Forward vs. Backward Logistics Reason for Returns Reverse Logistics Process E-Reverse Logistics Effective Return Management Challenges Case Studies Conclusion

Introduction
According to research Gain recognition in both
Research Field Practical Field

[1]

But still since from the last decade.

40% viewed as Headache 34.3% have no right system 33% companies policy inhibited to do

Introduction: (Cont..)
According to other researches Reverse Logistics has a great potential
Improve Customer Relation Improve Company Performance

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

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]

Forward vs. Backward Logistics

[3]

Factors

Forward Logistics

Backward Logistics

Forecasting
Distribution Product Packaging Product quality Visibility of Cost Destination/routing Pricing

Straightforward
One to many Uniform Uniform High Clear Uniform

Difficult
Many to One Damage Inconsistent Low Unclear Many factors

Market

Straightforward

Complex

Reasons of Return
Customer not satisfied:
When customer are not satisfied with the product or its not meet their requirements.

Installation and usage problems:

Common in the computer industry where in some categories such as CD-ROM drives get return.

Warranty claims:
Customers return the product because they find any defective parts in it and they can return that within a predefined period.

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

Return Analysis And Reason

Return % In Various Industries

Various Reason Of return

http://www.mbaskool.com/business-articles/operations/108-reverse-logistics.html

Reverse Logistics Process

Direct

Inspection

Recovery

Collection

Selecting

Repair Refurbishing Remanufacturing Retrieval Recycling

(Re-)
processing

Sorting

Reverse flows in the supply chain

Raw Material

Part Fabrication

Module Subassembly

Part Assembly

Distribution

User

Remanufa cture
Repair

Reuse

http://www.supplychain247.com/article/why_reverse_logistics_needs_to_become_a_core_competency

E-Reverse Logistics

Effective returns management

[4][1]

Improve Return Gatekeeping: Control the return by improve screening & scanning of products at door level Outsourcing: Company can consider help from a third party to handle and manage 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.

Effective returns management (Contd.)

Asset recovery:
To maximize returns and minimizes costs by proper disposal of returned items

Reducing reverse cycle times: The company is to improve value recapture by reducing the time for returns. Reverse logistic information system: Information systems to improve visibility of products reduce uncertainty and maximize economics of scale by developing/adopting an efficient information system.

Effective returns management (Contd.)

Return products for secondary markets: Negotiate the best price for products being returned and resold. Financial Management: To developing guidelines to properly account for charges against sales and related financial issues when products are returned by customers.

Effective return policies and procedures: Returns approval policies help to ensure effective gate keeping

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

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)

Case Study # 2: Lexmark

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.

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, KY 40550

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.

Reference:
1. 2. Reverse logistics Matters: Impact of resource commitment on reverse logistics and customer loyalty (Master Thesis). University of Maastricht Faculty of Business Administration Master Science of International Business Concentration Logistics Supervisor: Dr. Lieven Quintens 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 http://www.slideshare.net/anandsubramaniam/reverse-logistics-1579341 Reverse Logistics Case study comparison between an electronic and a fashion organization by Martin Creutz & Fredrik Larsson in 2012-05-14

3. 4.

Thanks