Reverse logistics

From Wikipedia, the free encyclopedia

Reverse logistics stands for all operations related to the reuse of products and
materials. It is "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. More precisely, reverse logistics is the process of
movinggoods from their typical final destination for the purpose of capturing value, or
proper disposal. Remanufacturing and refurbishing activities also may be included in the
definition of reverse logistics."[1] The reverse logistics process includes the management
and the sale of surplus as well as returned equipment and machines from the hardware
leasing business. Normally, logistics deal with events that bring the product towards the
customer. In the case of reverse, the resource goes at least one step back in the supply
chain. For instance, goods move from the customer to the distributor or to the
manufacturer.[2]
Contents
[hide]
• 1 Business
implications
• 2 Return of unsold
goods
• 3 References
• 4 External links
[edit]Business implications

In today's marketplace, many retailers treat merchandise returns as individual,

disjointed transactions. "The challenge for retailers and vendors is to process returns at
a proficiency level that allows quick, efficient and cost-effective collection and return of
merchandise. Customer requirements facilitate demand for a high standard of service
that includes accuracy and timeliness. It’s the logistic company's responsibility to
shorten the link from return origination to the time of resell."[3] By following returns
management best practices, retailers can achieve a returns process that addresses
both the operational and customer retention issues associated with merchandise
returns.[4] Further, because of the connection between reverse logistics and customer
retention, it has become a key component within Service Lifecycle Management (SLM),
abusiness strategy aimed at retaining customers by bundling even more coordination of
a company's services data together to achieve greater efficiency in its operations.
Reverse logistics is more than just returns management, it is "activities related to
returns avoidance, gatekeeping, disposal and all other after-market supply chain
issues". [5] Returns management – increasingly being recognized as affecting
competitive positioning – provides an important link between marketing and logistics.
The broad nature of its cross-functional impact suggests that firms would benefit by
improving internal integration efforts. In particular, a firm's ability to react to and plan for
the influence of external factors on the returns management process is improved by
such internal integration.[6] Third-party logistics providers see that up to 7% of an
enterprise's gross sales are captured by return costs. Almost all reverse logistics
contracts are customized to fit the size and type of company contracting. The 3PL's
themselves realize 12% to 15% profits on this business.[7]

[edit]Return of unsold goods

In certain industries, goods are distributed to downstream members in the supply chain
with the understanding that the goods may be returned for credit if they are not sold.
Newspapers and magazines serve as examples. This acts as an incentive for
downstream members to carry more stock, because the risk of obsolescence is borne
by the upstream supply chain members. However, there is also a distinct risk attached
to this logistics concept. The downstream member in the supply chain might exploit the
situation by ordering more stock than is required and returning large volumes. In this
way, the downstream partner is able to offer high level of service without carrying the
risks associated with large inventories. The supplier effectively finances the inventory
for the downstream member. It is therefore important to analyze customers’ account for
hidden cost. [

http://www.amfiteatrueconomic.ase.ro/arhiva/pdf/no24/articol_fulltext_pag19
2.pdf
Toyota car recall extends to Middle East
by Joanne Bladd and Agencies on Monday, 01 February 2010

CAR GIANT: Toyota has recalled a combined 4.4 million cars in North
America, Europe and China so far. (Getty Images)
A massive recall of Toyota Motor Corp vehicles could extend to the
Middle East after the carmaker admitted a number of the affected
models, 2005-2010 year Avalons and 2009-2010 year Sequoias, had
been shipped from the US for sale in the region.

The rapidly widening recall, currently thought to affect more than 4.4 million
cars, follows news of a possible fault in which the accelerator can get stuck
in a depressed position preventing the driver from slowing down.

In a statement Toyota said the fault – which is thought to be caused by worn

accelerator pedal mechanisms – affecting cars in North America, Europe and
China was unlikely to occur in the Middle East because of the difference in
climate. No further details were given.

Related: IN PICS: The Toyota models under recall

Related: Around the world: media frenzy as recall affects 4.4 million
cars
Story continues below ↓
advertisement
A spokesperson for Al Futtaim Motors, distributor for Toyota in the UAE, said
the firm was preparing a statement that would outline the extent of the
recall.

Owners in Europe and North America have been told they are unlikely to be
able to claim a refund for their car. Instead, the vehicle will likely be
repaired or replaced free of charge.

Dollar Thrifty Automotive Group, the UAE’s largest car rental firm, said it had
five Toyota Avalons out on lease as part of its 18,000-strong car fleet.

“We haven’t received notification [from Al Futtaim Group] but we are

expecting to hear this afternoon,” said Sam Eltibi, executive director, MENA
& Asia Pacific. “I expect the recall to affect a small number of owners, as
most of the Toyota cars in this region are made in Australia and Japan. The
recall is for US-made cars.”

The car hire firm would be recalling the five cars from lease, he said.

An agent for Fast Car UAE told Arabian Business the firm was unaffected by
the recall as it did not lease the models in question.

Emirates Driving Institute, the Middle East’s largest driving school, also said
it would be unaffected as the cars are not used by its instructors.

More Controversy For Toyota?

US investigations into the recall crisis at Toyota took a sharp turn last night as it emerged the
Japanese motor giant hired former federal vehicle safety agents who may have been
instrumental in preventing previous inquiries into the car company.
Details of personnel links between Toyota and the National
Highway Traffic Safety Administration were revealed as theJapanese car company pledged to
be more open in its dealing with governments and customers. Meanwhile, President Obama has
spoken on the controversy for the first time, telling all carmakers they risk damage to their
brands if they do not handle safety recalls properly.

Will More Revelations Come Out Against Toyota?

Toyota has recalled 8.5 million-cars globally after reports of faulty accelerator pedals, dangerous
floor mats and, latterly, defective brake systems on its flagship petrol-electric hybrid, the Prius.
In the US, Toyota is already under investigation and enduring a hail of criticism for its handling
of the recalls, with allegations that defects in cars which stretch back over most of the last
decade are responsible for 19 deaths and hundreds of injuries

This paper appears in: Management of Innovation and Technology, 2006

IEEE International Conference on
Issue Date: 21-23 June 2006
Volume: 2
On page(s): 834 - 838
Location: Singapore, China
Print ISBN: 1-4244-0148-8
INSPEC Accession Number: 9177146
Digital Object Identifier: 10.1109/ICMIT.2006.262338
Date of Current Version: 26 December 2006

ABSTRACT
The evolution of China into a major investment destination has enabled the
country establish itself as a dominant force in world manufacturing. It is
estimated that China has accounted for a third of global economic growth
over the past three years. A key consequence of this development as well as
China's entry into the WTO has been the establishment of global brands on
the Chinese mainland. The automobile industry, in particular, identified the
opportunity for massive growth on the basis of China's large and relatively
untapped market. Many of these organisations invested in joint ventures
with local car manufacturers. As a result, new business practices and
thinking has been gradually introduced into the market. The concept of
logistics as a strategy has challenged previous Chinese logistics practices.
While most local Chinese auto companies were familiar with forward logistics
(i.e. getting products to the customer), the idea of reverse logistics (i.e.
product recall and/or recycling) was relatively undiscovered until October
2004 when the Chinese government passed new regulations. The regulations
obliged car makers to `repair, replace or refund' faulty products with the
result that auto recall generated large quantities of product reverse flow, a
new and complex activity for the car manufacturers. While the global brands
were familiar with this concept in their international markets, they had not
been able to transfer the practices to China as a result of two key issues -
firstly, their focus had been on growth and establishing market dominance
and, secondly, operations were still largely managed by the local joint
venture partners and technology transfer had been more focused on more
critical activities. The research method applied was a case study examining
the reverse logistics activities of one of the leading auto manufacturers in
China. On the basis of the case study, this paper identifies the challenges
faced by the Chinese auto industry in particular a- - nd suggests ways in
which these challenges can be addressed. These will be of particular interest
to local manufacturers who are not in knowledge-transfer-enabling joint
ventures but are still subject to the new legislation. The study also examines
the role of other stakeholders in the supply chain, including suppliers and
logistics operators. The problems identified by the study vary in nature and
include an industry shortage of contemporary logistics expertise, the varying
capabilities of companies along the supply chain (parts traceability, for
example), sub-optimal logistics infrastructure and limited capability of third
party logistics companies (3PL). In order to address these issues, the paper
suggests a number of strategic imperatives for the industry. It is important
to have efficient and effective organisational, physical and information
structures as well as development of the necessary skills within
organisations, their suppliers and 3PLs. The study also suggests that
improvement of forward logistics is core to the ability to manage reverse
flows efficiently. With regards to the industry structure, the evolution of
larger 3PLs through mergers and acquisitions will not only enable upskilling,
but will underpin uniformity of service delivery while taking advantage of
economies of scale. To a substantial extent, some of these activities will be
supported by the implementation of technological and data solutions that are
central to the management of product movement in competitive supply
chains

In today's world of cut-throat competition, every aspect is taken care of and

is given importance. Reverse Logistics is one such service that has gained
momentum right from its start. Reverse Logistics includes all the activities
that take place after the sale of that particular product, commodity, service
or application. It helps in optimizing the after sale activities and in turn
improve the overall functioning. There are various service providers who
offer Reverse Logistics services to manage the aftermaths of post sales.
Every industry requires Reverse Logistics to help the clients
and customers get better service.

Read more: http://www.articlesbase.com/management-articles/merits-of-

logistics-management-and-reverse-logistics-2100629.html#ixzz0z87z1kig
Under Creative Commons License: Attribution

Maruti Suzuki A-Star recall to replace faulty fuel pump

Wednesday, February 24, 2010, 16:53 by Auto Sr. Reporter

One lakh A-Star cars to be recalled – is 2010 the year of recalls for car manufacturers?
 Photo: Suzuki A-Star

Maruti Suzuki has announced that it is recalling as many as 1 lakh A-Star cars – the flagship export

model of the company – in order to replace a faulty fuel pump gasket.

The cars to be recalled will include those exported.

This is the biggest recall so far in the Indian automotive industry.

The recalled Maruti Suzuki A-Star cars belong to a lot made till August 22, 2009.

Maruti Suzuki India (MSI) said the final cost for the replacement will be shared with the supplier-

partner after completing the whole exercise.

A spokesman for Maruti Suzuki India said the replacement will be done without charging anything

from the customer. The company also will help check possible fuel leak, even though no complaints in

this regard has been received from the customers.

Maruti Suzuki, the spokesman added, constantly monitors quality of its products through feedback and

internal analysis. It was during one such exercise, in November 2009, that the company came across

an abnormality reported in the fuel tank in some of the A-Star cars. By December 2009, Maruti Suzuki

began contacting the customers of A-Star cars through letters.

Earlier, Maruti Suzuki India had recalled Swift, its hatchback car, in 2005 to change bolts to in order to

reduce the front-suspension noise in Swift’s petrol version. In 2007, the company had recalled the

electronic control units of the Swift diesel version.

The company had, in 2008, replaced speedometers in its M800, and in the Omni in 2008.

Maruti Suzuki India said that so far it has changed the fuel pump gasket in around 50,000 units of A-

Star, the company’s fifth global model.

The company launched the A-Star model on November 19, 2008. The 998cc K10B petrol-engine car is

produced only in India – at Maruti Suzuki’s facility in Manesar.

At present, A-Star is exported to around 70 countries. The A-Star is sold as Suzuki Alto in Europe,

Australia, New Zealand and South Africa. The car is also exported to the United Arab Emirates, Saudi

Arabia, Chile, Morocco, Algeria, and Angola.

Nissan, the leading Japanese carmaker, sells A-Star in Europe under a contract manufacturing

agreement with Suzuki, the parent company of Maruti Suzuki India. Nissan sells the A-Star model as

Pixo.

In December 2009, the A-Star had crossed the one-lakh mark in overseas shipments – in less than a

year of selling the model globally.

Maruti Suzuki India, which began exporting the A-Star in January 2009, says it expects to double the

export to about 140,000 units this fiscal.

In January 2010, Honda, of Japan, had recalled 8,532 units of its sedan, Honda City, in India because

of faulty power-window switch as a part of a worldwide recall.

Honda Siel Cars India Limited (HSCI), the Indian subsidiary of Honda, had, in 2007, recalled around

4,000 units of CR-V, its sports utility vehicle, and 2,300 units of Accord, the luxury sedan, in what the

company described as an effort at “product update.”

MUMBAI: India's leading carmaker Maruti Suzuki is recalling 100,000 cars in

India and overseas due to potential fuel leakage problems, it said Tuesday.

About 50,000 of the popular A Star hatchbacks have been recalled since
November, from India and from export markets including Europe, Australia
and North Africa, said company spokesman Puneep Dhawan.

Maruti Suzuki, a subsidiary of Japan's Suzuki Motor Corp., makes about one
of every two cars sold in India. With the A Star, it is transforming India into a
small car production hub for export.
The recall comes in the shadow of Toyota Motor Corp.'s global recall of 8.5
million vehicles — none of them in India — to fix acceleration and braking
problems in several models.

The A-Star is branded as the Alto in Europe, where it is also retailed as the
Pixo by Nissan. It is called the Celerio in non-European markets.

Cars manufactured between November 2008 and August 2009 have a faulty
fuel pump gasket and O-ring, which can leak when the fuel tank is topped off,
the company said.

Dhawan said the problem was discovered during an internal check and that
no customers have complained so far.

``We have been recalling proactively,'' he said. In the 10 months ending in

January, Maruti Suzuki sold 706,488 vehicles in India, up 22.3% from the
year-ago period, while exports surged 141.9%, to 120,097 vehicles.

"In November 2009, we came across an anomaly reported in the fuel tank in
some of the vehicles and by December 2009, we started contacting the
customers through letters," the company said in a statement.

"These vehicles belonged to a lot made till Aug 22, 2009 only. In case fuel is
filled to the brim, beyond the fuel auto cut off position, a possible fuel leakage
from the fuel pump mounting area may take place. No problem has been
reported by customers."

But as a matter of caution, the company said it decided to check all vehicles
from the lot and the fuel pump gasket and ring were being replaced for around
100,000 cars including those exported overseas.

The news had an immediate impact on the company's shares on the Bombay
Stock Exchange, where its scrip fell to an intra-day low of Rs.1,320.25, to log
a loss of 4.4%, before gaining some ground to close at Rs.1,336.85 with a
loss of 3.24%.
Maruti's decision comes barely a month after the Indian arm of another
Japanese company Honda decided to recall 8,532 'City' sedans manufactured
in 2007 from India for a part replacement of power window switches that had
the potential to catch fire.

" The third generation 'City' currently sold in India is not affected and does not
require any part replacement," the company spokesperson said, after its
parent called back 646,000 'Jazz' hatchbacks globally, excluding India.

Honda said there was a potential problem of smoke coming out from power
window switches of its Indian City models manufactured in 2007 if water
seeps in when left open during heavy rain or due to spillage of liquid.

The news dealt another blow to the Japanese car industry after Toyota Motor
Corp announced massive recalls around the world.

Read more: Maruti Suzuki recalling 100,000 cars with faulty fuel tank from
India, abroad - The Times of
India http://timesofindia.indiatimes.com/business/india-business/Maruti-
Suzuki-recalling-100000-cars-with-faulty-fuel-tank-from-India-
abroad/articleshow/5607773.cms#ixzz0zcI9NXSs