Reverse logistics (RL) is defined by Rogers as, “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”. (1) This reverse flow of materials has proven to be worthy of its own field of research. Logistics firms have failed to be able to efficiently and cost effectively move this material through existing networks. Third party logistics firms (3PL) have even been created to specialize in this emerging multi-billon dollar market. A question that arises is why it has taken so long for companies to develop this logistics setup? David Poitevint, manager of marketing research and analysis at GATX Logistics, asserts that, "Reverse logistics has been overlooked because everyone was so concerned with the inbound movement of material, inbound management, and controlling their suppliers from the front end of the supply chain.” (2)
Upon considering if RL is appropriate for your organization, the first decision that must be made is which products you would want to include in a remanufacturing process. Rubio et al. describe three main factors in this decision (3). The first is the customer’s willingness to pay for the remanufactured item. Customers tend to value the item less than an original one after it has gone through the process. Is there still profit to be had on
(Mfe.govt.nz, 2017). Disposal of Tyres also causes a major pollution problem as the tyres tend to release toxins into the ground water in a wet soil condition. Many researchers have come to an idea that very little toxins are released when shredded tyres are placed as light filling material. However, there are limitations for each region and some regions are assessed if the product can be suited to the conditions (Liu, H.S., Mead, J.L. and Stacer, R.G., 1998).
Reverse Logistics. Once a customer places an order for an item and the item has an associated return value, the GCSS-A system populates a list that so that all parties can see and know what part needs to be returned and that it indeed has and associated return value. This is the true start point of the reverse pipeline of the Army’s supply chain. The Army’s reparable management process recovers and repairs assets (repair parts) to replenish serviceable inventories and satisfy the equipment readiness requirements. Commanders are responsible to ensure that their subordinate units are in compliance with local policy and Army publications (US Army, 2014). The Army uses a system call Standard Pricing (SP), which enables the Army to receive a
According to Major Joshua M. Lenzini in his article Anticipatory Logistics: The Army’s Answer to Supply Chain Management, “Supply chain management is similar for both corporate and military organizations. However, some significant differences are evident in these models. The first is the absence of maintenance on the corporate model. Another is that transportation, distribution, and warehousing are unidirectional in the corporate model but dual directional in the military model (see Figure 3, Lenzini, 2002)).” This backward flow is called reverse logistics, and although it is not unique to military supply networks it is uniquely critical.
A fundamental part of society since the beginning of time has been the trade of information, cash, and physical goods between at least two separate parties. Whether it is amongst consumers, businesses, or between a business and a consumer, it has always existed in some form. As time passes, our knowledge and technology have advanced therefore creating a stronger supply chain process. A basic logistic service, a means of transportation and storing are what enable trade. In order to have an effective supply chain process, the supporting needs need to be accessible and effective for all parties involved. In the book Logistics Clusters by Yossi Sheffi, he thoroughly explains the current
The ISOL + Group produces and sells a series of insulating products for the construction industry, sheathing for pipes, and rigid boards blanket insulation. The firm’s subsidiary has its own production plant and increases its own production capacity through buying from another of the Group’s plants those products it cannot manufacture due to technical reasons or in situations when it is operating at full capacity. The company’s production department is in charge of logistics in addition to other functions such as end-product distribution. The subsidiary, ISOL + FRANCE has initiated an extensive rethinking of logistics matters in the Group. This process was geared towards evaluating the situation
A total of 228 SME’s (85.1 percent) answered that they Never had Reverse logistics for the reasons of ‘End of useful life’. 36 SME’s (13.4 percent) responded that sometimes material moved in reverse direction for reason of ‘End of useful life’. 4 SME’s (1.5 percent) said this reverse movement happens mostly for this reason.
However it generalizes “point of consumption” to “a manufacturing, distribution or use point” and “point of origin” to “a point of recovery or point of proper disposal.” In this way we give margin to return flows that were not consumed first (for instance, stock adjustments due to overstocks or spare parts which were not used). We employ the expression “point of recovery” instead of “point of origin” since flows may go back to other points of recovery than the original (e.g. collected computer chips may enter another chain). Besides this, “point of recovery” stresses the distinction we want to make between reverse logistics and pure waste management activities. Furthermore, we include the reverse direction through the term “backward flows,” to exclude what can be considered as forward recovery. For instance, when a consumer gives his/her personal computer to the neighbour. In summary, the definition of Reverse Logistics has changed over time, starting with a sense of reverse direction, going through an overemphasis on environmental aspects, coming back to the original pillars of the concept, and finally widening its scope. For other discussions on the evolution of the definition of reverse logistics, we refer to Rogers and Tibben-Lembke (2001) and to Fernand´ez (2003).
Having characterised reverse supply chains in Section 2.1, we now address corresponding strategic design and planning issues. Strategic design and planning of reverse supply chains deal with decisions that have a long-lasting effect on the company. These include decisions regarding a choice of collection method, the number, location and capacity of sorting and reprocessing operations and corresponding inventory buffers, and definition of various transportation links in terms of sourcing, modes and capacities and so on. However, the complexity of the reverse supply chain has also led to the inclusion of several planning decisions in addition to the classical strategic design decisions (i.e. location
Remanufacturing has now a days become very popular from auto motives, electronics to IT because it makes production economical and environmentally attractive. But it’s not fully accepted by customers because of quality and aftersales concern. Two new service modes (extended warranty and free replacement service) are developed to address this problem. Using mathematical models, financial benefits are evaluated to see whether these modes make significant difference or not.
The main features which must be considered while designing a product or component for remanufacturing are:
Should reverse logistics be labeled as the latest business trend? Should it be started on a company whim or in a half-measured capacity? Could focusing on reverse logistics magnify companies’ mistakes even more, or will it focus on the heart of manufacturing, distributors, wholesalers, or retailer's profitability. If we look at using a scoring method, which would focus the measured capabilities of capacity, which could emphasis the return equation, and appears to point to the right measure of resources. Any reverse logistics initiative should reduce real costs which intern satisfies the customer.
Reverse logistics is basically defined as the processes of receiving defective products or unwanted materials in order to recapture or regain value or ensure proper disposal of the products or materials. Therefore, the operations of reverse logistics are largely dependent on reversing the supply chain management processes in order for businesses to correctly determine and classify returned goods for disposal. However, reverse logistics processes entail more than merely
There are a large number of potential customers for C2R. The company's model has proven effective for a seller of physical goods already, so this category appears to hold the best potential. In particular, companies that do not have a physical sales infrastructure will see value in C2R's service. Companies that have a third-party physical sales infrastructure are especially good candidates. This is doubly the case for firms that have little interest in vertically integrating the reverse logistics function. The ideal client or partner should be an industry leader, because there is a certain prestige factor to working with the best and that prestige can be used as a selling point. One example can be Dell, which now sells through stores as well as online. This company does not have branded stores, so uses third-party outlets. Moreover, because this is a recent initiative, Dell might not have a sophisticated system for handling returns. Yet it sells over $60 billion per year. Additionally, Dell has a challenge in that a lot of its end consumers are also businesses, making our B2B reverse logistics model even
Blanchard (2006) defined third party logistics as, “A single entity that coordinates all the logistics requirements for a given company/agency.” Today’s world business environment has become so competitive that companies in order to be successful in the market must deal with different resources for satisfying their customer need. In the past decade or so the competitive global market has made a big influence in the growing for external business. Third party logistics providers are more and more employing external companies for inventory management, transportation, warehousing, and other value added activities for customer services. Third party logistics ultimate goal is to provide a competitive advantage to the organization for which they are serving. According to Cardinal Logistics (2012), “Third-Party Logistics is an effective way to reduce operational costs, and allow a company to focus on their core competencies.
Logistics in the aviation industry is not limited to just airplane sales, production operations at the factory level, or parts distribution. It goes beyond to include pre-sale processes, storage, returns management, disposal of excessive inventory, and other supply chain concerns. Reverse logistics defines the course of moving products from end users to manufacturers for recapturing value or desirable disposal. In the aviation industry, a three-step reverse logistics approach may entail customer interaction strategies, transportation, and positioning initiatives, and value redemption plan. With the trend of e-commerce being so ubiquitous, the need for reverse logistics in the aviation industry is even more critical in today’s global world.