Reverse Logistics

The purpose of this research is to determine how Performance Based Logistics (PBL) contracts can save the U.S. Army time and money. PBL contracts have been in effect for over 20 years now and most of Department of Defense (DoD) organizations are moving towards gaining more of them in the future. The current and former PBL contracts have been a financial life saver for army budgets, so you have to wonder why they would choose any other type. The information researched will help explain why it’s a better choice and why other DoD organizations are moving in that direction as well.

The globalisation of markets has increased customer demand and product differentiation. Higher quality products and shorter delivery times are essential for maintaining customer satisfaction in highly competitive markets like the consumer electronics industry. Consequently, supply chain management is an important process in all businesses, and if managed effectively, can give companies a competitive edge. However, it often

OPERATIONS AND SUPPLY CHAIN MANAGEMENT Vol. 2, No. 3, September 2009, pp. 167-171 ISSN 1979-3561|EISSN 1979-3871

Operations Management is concerned with the managing of resources and activities that produce and deliver goods and services

Logistics structure orchestrating joins strategizing the surge of materials or things starting with one point then onto the accompanying. An unremarkable logistic structure outline tries to set up supply, warehousing other than the scattering of advancement base. Further, the logistic structure sorting out logistics costs paying little respect to allowing the required level of versatility to meet the affiliation necessities. In portraying an immaculate logistic framework including one and just arrangement focus, changes steps which join surveying, gathering data, showing the association and disengaging it and completing the logistics structure course of action are taken. By applying the right procedures, exact data and information are relied on to pick these steps.

Logistics is considered as an operational process which includes activities such as storing, transporting and distribution of physical goods. E- Commerce has made a big change in logistics and distribution processes. Due to introduction of online purchases, way of handling materials have also been changed. Online retail industry is being expanded year to year. According to Goldman Sachs, Online Sales will reach $750B mark by 2016 with annual growth rate of 20%.

Logistics is considered as an operational process which includes activities such as storing, transporting and distribution of physical goods. E- Commerce has made a big change in logistics and distribution processes. Due to introduction of online purchases, way of handling materials have also been changed. Online retail industry is being expanded year to year. According to Goldman Sachs, Online Sales will reach $750B mark by 2016 with annual growth rate of 20%.

Definition of logistics: Logistics is the process of planning, implementing and controlling the efficient, effective flow and storage of raw materials, in-process inventory, finished goods, services and related information from point of origin to point of consumption for the purpose of conforming to customer requirements

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)

The primary aim of logistics is to co-ordinate the transportation, storage and handling of products as they move from the source of raw materials, through the manufacturing system to their final point of sale in a way that it meets customer requirements at minimum cost. In the past this cost has been defined in purely monetary terms. Recently the world has witnessed an increasing awareness about environmental and sustainability issues. This growing concern for the environment has a created pressure on companies to reduce their negative environmental impact. As defined by ISO14001, the environmental impact is “a modification of the environment, negative or beneficial, resulting wholly or partially from environmental aspects of an organization “. Since the transportation of goods leads to air and noise pollution, leads to fatal accidents sometimes and has significant impact on global warming, firms have been trying to render their supply chains and logistics operations more environmental friendly. That this why many Green logistics strategies have been devised in order to achieve an efficient and environmentally friendly distribution and transportation system.

Deal with the management of the flow of goods or materials from point of origin to point of consumption, and in some cases even to the point of disposal. Logistics is not confined to manufacturing operations alone. It is relevant to all enterprises, including government institutions such as hospitals and schools, service organization such as retailers, banks and financial service organizations. Logistics is dependent upon natural, human, financial and information resources for inputs. Suppliers provide raw materials, in process inventory and finished goods. Management actions provide the framework for logistics activities through the process of planning, implementation and control. The outputs of the logistics system are

the image of a customer seeking to find transportation enterprise that will accept the shipment, choose the most

Logisticians can also achieve ‘green logistics’ through reverse logistics operations which is designed to reuse products or dispose of them correctly, therefore reducing waste in the system. Rogers and Tibben-Lembke, (2001, p.130) define reverse logistics “as the process of planning, implementing, and controlling the efficient, cost effective flow of materials, in process inventory and finished goods, and related information from the point of consumption to the point of origin, the purpose of recapturing value or proper disposal”. Efforts that reduce this reverse flow are considered part of reverse logistics as they reduced the total amount of waste in the supply chain. Reverse logistics approaches include returns management, product repair/refurbishment, recycling of products and materials as well as the correct disposal of unwanted products. Figure 1 illustrates the product flow in reverse logistics and the principles of reverse logistics i.e. substitute, reduce, recycle and reuse (Wu and Dunn, 1995). All these reverse logistic approaches diminish the total quantity of waste in the supply chain and therefore can be used by logisticians in order to achieve green logistics.

Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point-of-origin to the point of- consumption in order to meet customers ' requirements (Enarsson, 2015). Simply put, logistic means moving product from one point to another in the most effective way. The purpose of this assignment is to discuss the logistics activities, concept and technology because I know logistics is very important that is why I want to write more about it and explain each of the terms.

Forward logistics (or conventional logistics) is the regular distribution channel followed by the manufactures from time immemorial. Forward logistics concentrates on the products (goods or services) reaching the consumer end and deals with the line of flow from the manufacturer’s end to the consumer’s end. It deals with the very essence of Supply Chain Management and logistical activities of an organization. It has a significant impact on the primary operations carried out, which act as the basic revenue generating aspect of a business. In this logistical system, the flow is a “one-to-many” type and the forecasting or traceability is quite simple.