Reverse logistics market size, share and opportunity. Keywords reverse logistics, reverse supply chains, moroccan companies, case study. The reverse logistics that directly impact supply chains the most are the return of products from the end consumer back to the manufacturer. Pdf a framework for reverse logistics researchgate. Generally, logistics is known to be the process of transporting products from manufacturers to customers. Reverse logistics market size, share and opportunity analysis. Understanding the difference between reverse logistics and forward logistics by tom k friday, 17 march 2017 published in blog reverse logistics has been around for a long time but has only recently become a more popular method of supply chain management. The study concluded that the best practices identified in literature have proven to be important in practice, and applying such practices will. The reverse logistics process is illustrated in figure 1. Also included are details on the importance of collaboration and a number of tips to ensure your reverse logistics is a success. Reverse logistics, etailing, sustainable logistics. Introduction and background online retailing has increased at a phenomenal rate over the past 10 years and with it, the need for improved logistics systems to cope effectively with delivery of products ordered online.
Managing reverse logistics to improve supply chain. Sti is known for our specialized delivery services, but many of our capabilities are also used to solve difficult or complex situations after the sale, such as asset recovery, returns, and product disposition management. Reverse logistics is like cleaning up the morning after a big party a mess that no one really wants to face, resulting from things that are left. Reverse logistics can represent a significant chunk of supply chain cost, and its typically not very well managed, its time to manage reverse as an integral part of supply chain management. The study also tries to look at the environmental aspects of reverse logistics.
Some items may require special equipment for loading, or may just be located across north america in a difficult to reach area. In this report we examine reverse logistics and discuss how retailers can take an omnichannel approach to help reduce the costs they bear from returned goods. Reverse logistics of information and communication technology. Nowadays, when modern societies more clearly perceive the impact of pollution on the natural environment, the industry must also adapt to more restrictive laws which regulate level of. The management of this material flow opposite to the conventional supply chain flow is the concern of the recently emerged field of reverse logistics stock, 1992. Incae costa rica, university of texas at san antonio usa, ie business school spain. The role of reverse logistics in creating added value for producers of plastics is presented here. Reverse logistics operations in retail antea group usa. Whatever parties are involved, the focus involves moving products forward from. Reverse logistics planning for the retail supply chain. This process of returning products back through the supply chain is the reverse logistics process and it may encompass several different logistics activities.
Purpose this paper investigates reverse supply chain rsc practices. Schematic representation of the direct and reverse logistics processes. In this context, the so called reverse logistics flows have grown in importance in the study of supply. Although reverse logistics has long been an underoptimized area, with the new market pressures at sway, it is even more important for companies to focus attention and resources on it than ever before. The premise is the choice of reverse logistics for plastics on the one hand, considering their versatile applications, such as in the packaging, construction and automotive industries. Pdf business logistics, both integrated and reverse, is an important activity in. Pdf reverse logistics has been stretching out worldwide, involving all the layers of supply chains in various industry sectors. Reverse logistics supply chain management basics datex.
Relationship between reverse logistics practices and organizational performance the case of east africa bottling share company by. Return management systems, and by the same token, reverse logistics requirements, vary based on product and business model attributes. The national solid waste policy nswp indicates that the reverse logistics for. Concepts, design and implementation of reverse logistics systems. Pdf on feb 27, 2018, zhifang zhou and others published the optimization of reverse logistics cost based on value flow analysis a case study on automobile recycling company in china find. Generally, most ecommerce retailers have had to incorporate some element of reverse logistics for consumers who need to return a product. The opportunity help walmart canada turn an unexpected reverse logistics issue into a zero waste sustainability win. Paperwork and poor workflow processes tend to plague reverse logistics operations. The biggest online shopping giants like walmart, target, and amazon, and many major department stores have all spent significant time and resources to hone their reverse logistics operations. Avenue domingo da costa lopes, 780, tupa17600, brazil. While there is a plethora of studies looking at various. Reverse logistics or reverse distribution is a process within the retail community that describes the return of unwanted, damaged, unsold, or dated retail products back to the distribution center, warehouse, supplier or manufacturer, for the purpose of redistribution, recycling, reuse, or disposal.
It is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. It is the process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, inprocess inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of. The strategic usage of reverse logistics among the retailers and wholesalers is to reduce the risk of buying products that may not. Among ecommerce sales, up to 30 percent will be returned to the shipper, which reflects a huge demand for effective returns management and reverse logistics process standardization. Getting started in reverse logistics inbound logistics. Environmental advantages of the reverse logistics scielo. Reverse logistics of information and communication technology equipment. When a company focuses more attention on the returned merchandise to figure out what the original problem was, customers will have a better experience. Reverse logistics maturity model rlmm homing in on reverse logistics needs and key success drivers there is no one way when it comes to going and staying circular. This is exacerbated by the multiple entities customer, manufacturer, reseller and disposer that need to partner to develop a smooth reverse logistics. Reverse logistics free download as powerpoint presentation. They are learning, however, that their companies can realize dramatic cost savings by applying forwardfocused processes and automation to optimize reverse logistics operations. Environmental management and reverse logistics anna brzozowska, marta starostkapatyk politechnika czestochowska abstract.
In an instance, of reverse logistics, products move back from customers to distributors or manufacturers. Pdf the optimization of reverse logistics cost based on. Companies make money selling things, not taking them back. Nowadays, companies are even getting iso certification for their returns process. In every supply chain, products and materials must sometimes move in the reverse direction, back to their source or to a third party handler.
Reverse logistics also encompasses recycling of packaging and containers, reconditioning or refurbishing of products and disposition of obsolete goods. Reverse logistics, closed loop supply chain, sustainability, brazil. Reverse logistics is for all operations related to the reuse of products and materials. Reverse logistics as alleviation to ecological issues core. The action steps below can help you develop and implement an integrated approach to reverse logistics that will lead to increased customer satisfaction, fewer returns, lower costs, and greater return on your assets. The six hidden costs of reverse logistics inbound logistics. The solution apply cheps environmental expertise and reverse logistics capabilities to efficiently move tons of wooden garden racks to recycling, helping walmart canada stay true to its corporate culture and move closer to zero waste. Reverse logistics is a branch of asset recovery also by increasing customer loyalty. Reverse logistics, a key function of the supply chain, is a complex and often difficult to navigate process.
Even though reverse logistics can be a challenging supply chain sector to improve, there exist a number of ways that companies can go about this. An examination of the reverse logistics of clothing re. Reverse logistics concerns the integration of used and obsolete products back into. Essentially, reverse logistics is the process of moving goods from their point of consumption to the appropriate link in the supply chain for the purpose of capturing any residual value through remanufacturing or refurbishing, or the proper disposal. Reverse logistics processes in plastics supply chains abstract. Growing green concerns and advancement of green supply. Managing reverse logistics to improve supply chain efficiency.
Due to both human nature and training, logistics professionals tend to be forward focused. Reverse logistics stands for all operations related to the reuse of products and materials. The way forward part i of ii although reverse logistics is often overlooked, retailers that master this discipline can gain competitive differentiation and turn the. The first step of a best practice implementing a reverse logistics solution would be to supply the customer with a return label when the item is shipped that includes the customers order number in barcode form so that you can inform the customer as to when the item is received in the warehouse. To meet these objectives, halfords initial actions involved engaging with the key stakeholders within the business finance, store operations, logistics, trading see figure 1 suppliers and the department for transport dft cima funded reverse logistics research project. Reverse logistics is a new notion in the history of logistics and supply chain management. Whether your customers are buying for themselves or on behalf of a business, they have high expectations for the services you provide after the sale. Reverse logistics is the process of handling return of products from a consumer or a retailer to a manufacturer through the use of the supply chain. Then, we picture those completed goods moved to distributors or final consumers, or some similar combination. Reverse logistics is defined as the practices and processes set up for organising product returns from pointsofsales to the manufacturer in order to repair, recycle or dispose of these articles in the most costeffective way. The study concluded that the best practices identified in literature have. As weve explained before, all manufacturers need reverse logistics.
The lack of awareness of benefits of reverse logistics is a major barrier for its implementation. Transit lossesdamages need to look after in a serious manner. Companies can see between 4% 30% of their products returned by customers and total uk retail returns have been valued at around. However, now due to consumer awareness, law enforcement on disposal of certain goods makes it very important for companies to manage an efficient reverse logistics. We have the infrastructure and global network to manage reverse logistics quickly and efficiently. Earlier companies did not pay much attention to reverse logistics. However, the increased contemporary emphasis on reverse logistics appears to be the result.
Reverse logistics consists of all activities which are performed after the sale of a product. We process returns direct from consumers and retail channel partners by establishing a set of customized rules for the disposition of products. Reverse logisticsthe movement of products back toward the manufacturer in a channel of distributionis a topic that has been given scant attention. Apr 18, 2016 this is a profitable and environmentaly friendly opportunity for your company. Ietc international environmental tecnology, manual 3. Mar 20, 2020 the six hidden costs of reverse logistics by lee norman and warren sumner, clearorbit reverse logistics magazine, fall 2006. Retail% 20chain%20prm%20solution%20saves%20millions. Understanding the difference between reverse logistics and. When a machine or piece of equipment reaches the end of its useful life, business owners can achieve a second. Reverse supply chain practices in developing countries core. Reverse logistics is filled with risk, and the rate of reverse logistics in ecommerce is higher than any other channel, reports business2community.
Reverse logistics is a process you must have in place for the returned and recalled product to follow that is efficient, guarantees the item makes it back to the right inventory if necessary and costs the least amount of money. It includes data regarding the costs of returns worldwide and also in the united states. Reverse logistics has been around for a long time but has only recently become a more popular method of supply chain management. Reverse logistics retail system solutions chep usa. Betelhem guta a thesis submitted to the school of graduate studies of addis ababa university in fulfillment of the requirements for the degree. This is because as the supply chain evolves and increases in complexity as a whole, so does reverse logistics.
This dossier presents statistics and facts on the reverse logistics market worldwide. Importance of reverse logistics supply chain minded. The us army first paid its attention to reverse logistics operations in 1998. During the same year, the first commercial study of reverse logistics was made by dr. Thus, reverse logistics management represents a systematic business model, to. Pdf reverse logistics for return management in retail. Research executive summaries series tools to manage reverse logistics overview of project reverse logistics has become an area that retailers and manufacturers cannot ignore. It has resulted in an increase in unsold products, rate of returns, packing.
Echodata offers sophisticated reverse supply chain services. Introduction to management of reverse logistics and closed loop. Reverse logistics programs are typically complicated by a number of factors. Reverse logistics is no small matter in the supply chain.
How to develop a reverse logistics strategy eight tactics to try by curt barry december 2003 catalog success magazine multichannel industry leaders such as cabelas, talbots, eddie bauer, neiman marcus, nordstrom. The reverse logistics experts at fedex supply chain analyze returns processes and optimize operations by eliminating waste streams and identifying the best disposition method for each product whether its return to vendor, return to stock, liquidation, recycle or salvage. Ernst 2000, reverse logistics involves the return flow, considering either defective parts packages or products returned consumed that should go to a recycling. Recovering lost profits by improving reverse logistics 5 impacting the bottom line many executives compare the amount of money spent processing returns to other supply chain activities and conclude that investing resources elsewhere would yield greater results. When we talk about the traditional flow of logistics, we imagine the movement of raw materials to one or several manufacturers. It is a process of flow of goods or material which are unwanted or defective through the logistics chains to the manufacturer so that it can be recycled, reused, or disposed of properly the meaning of reverse logistics. In our experience with numerous retailers, reverse logistics remains an overlooked area. Reverse logistics is an oldschool, messy, awkward stepchild of an industry, but with skyrocketing return rates and record amounts of overstock, tech adoption is. Challenges to be faced in reverse logistics since reverse logistics involves many to one distribution point there are more challenges need to be faced. Make returns and repairs easy for customers with ups reverse logistics solutions.
Remanufacturing and refurbishing activities also may be included in the definition of reverse logistics. Understanding the difference between reverse logistics and forward logistics. But companies automating the reverse logistics process have discovered a nontraditional but relatively easy way to move dollars to the bottom line. In this article, well discuss 5 things all manufacturers need in their reverse logistics strategy in order to avoid the excessive costs and the missed revenue that can occur in reverse logistics when implemented well, reverse logistics can be competitive advantage. Reverse logistics in construction refers to the movement of products and materials from salvaged buildings to a new construction site. Managing reverse logistics to improve supply chain efficiency and reduce cost reverse logistics can represent a significant chunk of supply chain cost, and its typically not very well managed, its time to manage reverse as an integral part of supply chain management. The first by stock 1992 recognized the field of reverse logistics as being relevant for business and society in general. Therefore, they just focus on trying to reduce the cost of returns processing.
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