The difference between forward and reverse logistics pival. Jul 10, 2017 reverse logistics, a supply chain management technique, might be the answer your company is looking for. Reverse logistics in the age of entitlement logistics. From retrieval to repair and screening to recycling, understanding every step is important when it comes to realizing the true value of. Nov 22, 2017 reverse logistics refers to all supply chain and logistics operations relating to the reuse and recyclability of products and materials. Walmart reinvents the returns process as amazon tries to play catchup walmart is marrying the power of the walmart app with its brickandmortar retail stores and hoping to slash returns from what used to take roughly 5 minutes to 30 seconds. Hannan sadjady, in logistics operations and management, 2011. Reverse logistics programs are typically complicated by a number of factors. This includes business processes that involve transport from distribution endpoints such as retail locations back in the supply chain to locations such as warehouses and factories. Thus, reverse logistics process management has developed into a discipline that produces cost reductions, adds efficiencies and improves the consumer experience. Reverse logistics supply chain management basics datex. Why reverse logistics needs to become a core competency. The reverse logistics process includes the management and the sale of surplus as well as returned equipment and machines from the hardware leasing business. In this guide to reverse logistics, well discuss the steps and terminology to be aware of in this process.
Introduction to management of reverse logistics and closed loop. After research, the correlation among reverse logistics. The returns management process is a core supply chain management process that comprises the activities related to returns avoidance, gatekeeping, reverse logistics and value maximisation in the. An effective and standardized reverse logistics process can give a firm the necessary competitive advantage to move above peers and competitors, and possibly capture larger.
Companies that follow best practices generally process customer returns within 48 hours to 72 hours of receipt and credit the customer within seven days of receiving the return. More precisely, reverse logistics is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. This is exacerbated by the multiple entities customer, manufacturer, reseller and disposer that need to partner to develop a smooth reverse logistics program. Remanufacturing and refurbishing activities also may be included in the definition of reverse logistics. The first study focuses on the status of the reverse logistics field across multiple disciplines. It is the process of moving goods from their typical final destination for the. Key reverse logistics management element gatekeeping the screening of defective and unwarranted returned merchandise at the entry point into the reverse logistics process rogers, dale, and don tibbenlembkethe nintendo example. All the common reverse logistics processes or activities which suppliers. Reverse logistics requirements implications subject to increasing extended producer responsibility legislation especially consumer electronics maximize return volumes and standardize the reverse logistics process for best value retention at minimum costs prototypical reverse logistics solution. Optimize, integrate and track your reverse logistics.
The repair process can be broken down into subprocesses, such as cleaning, disas sembly, and repair as shown in figure 3. Benefits of an efficient reverse logistics process arcbest. Reverse logistics has been considered a strategy to. This is because as the supply chain evolves and increases in complexity as a whole, so does reverse logistics. Reverse logistics may involve varying levels of planning, implementation, and control of goods as they are shipped back to the fulfillment center and navigate the supply chain to the appropriate application. The reverse logistics process is fairly easy to understand once youve broken down the 6 steps companies follow to carry out this specific management strategy. Pdf in this paper we define and compare reverse logistics definitions. The study also tries to look at the environmental aspects of reverse logistics. There are many definitions of reverse logistics appear gradually.
Reverse logistics is for all operations related to the reuse of products and materials. There are a variety of options here most of the time, as they include shipping, pick. Reverse logistics, a key function of the supply chain, is a complex and often difficult to navigate process. The reverse logistics process in the supply chain and. Reverse logistics management for supply chains download the pdf whats driving the need for a reverse logistics supply chain strategy.
It manages the tangible and intangible flows from the market to the production site, and at the same time it is a distribution channel, where the cargo route goes in the opposite direction unlike the normal one. Reverse logistics implies the return of waste product and packaging for reuse, recycling and disposal, and today this activity is a crucial part of green logistics figure 1. Reverse logistics is a broad area and, in this particular study, we focused on the management of retail returns. How reverse logistics works a breakdown flow chart of. In general, logistics indicates the products are transported from producer to customer, while reverse logistics is in an opposite way autry, 2005. Warranty claim created to check entitlement return order created return delivery created product received. Meeting the reverse logistics challenge supply and demand. The reverse logistics process can be divided into two categories depending on the areas of reverse flow which in turn comprises of primary products, or primary of packaging. Reverse logistics an overview sciencedirect topics. Learn how it can increase efficiency, improve customer service and more. Reverse logistics is defined as the processes of receiving returned components or products for the purpose of recapturing value or proper disposal. Also covered are reverse supply chain models such as centralized postponement of returns, decentralized preponement of returns, use of information.
Reverse logistics management for supply chains deloitte us. Reverse logistics rl is an innovation able to bring about immense benefits for organisations in a wide range of industries through enhancing the performance of supply chain procedures. Phil corwin, director of marketing with atlantas ups supply chain solutions, which offers a variety of reverse logistics services, says that as manufacturers and retailers have seen their margins become razorthin, they have begun to recognize the significant costs. Indeed, for many logistics and supply chain professionals, reverse logistics for years has been regarded as pejorative expression. Reverse logistics is the process of moving goods back through the supply chain for refund, repair, replacement or recycling. When the transportation service provider arrives at the dc and the seal is broken, a new adventure begins. Understanding the difference between reverse logistics and. Retailers see reverse logistics as a way to get product that has been returned.
Rebate retailers if they register the game player sold to theconsumer at the point of sale nintendo. Reverse logistics is a strategy in supply chain management in which a company collects and reuses some part of their distributed good. This is exacerbated by the multiple entities customer, manufacturer, reseller and disposer that need to partner to develop a smooth reverse logistics. The reverse logistics process in the supply chain and managing its. Managing reverse logistics to improve supply chain efficiency. Rl is the process of moving goods from their typical final destination for the purpose of recapturing value. Reverse logistics is the first to be presented in 1992 by stock autry, 2005. When a customer purchases an appliance such as a washing machine and it reaches the end of its service life, the customer will often not know how to deal with that item. Process logistics an overview sciencedirect topics. Optimize, integrate and track your reverse logistics processes with sap advanced returns management. Reverse logistics consists of all activities which are performed after the sale of a product.
Today, definitions vary depending on what company or segment of industry is attempting to define it. Aug 24, 2011 but more recently reverse logistics has begun to lose its necessary evil status, and analysts and industry veterans point to several trends that have increased the importance, and raised the profile, of the reverse logistics process. By this means, we put in context the driving forces for reverse logistics, a typology of return reasons, a classification of products, processes and. Product recalls product recalls are part of the reverse logistics process that. First of all, a document searching process was carried out in. Normally, logistics deal with events that bring the product towards the customer. In our experience with numerous retailers, reverse logistics remains an overlooked area. Ernst 2000, reverse logistics involves the return flow, considering either defective parts packages or products returned consumed that should go to a recycling. Meeting the reverse logistics challenge supply and.
With the advent of sophisticated management systems, organizations have discovered the logic of prioritizing reverse logistics process management, which has led to the development of advanced technology that supports the process. This articles purpose is to define and identify the benefits to reverse logistics services, and the. When the repair is just cleaning the product, a production order can be used to capture the materials and labor used to clean the product. It is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. Managing reverse logistics to improve supply chain. Process logistics is a crucial parameter when considering the effective operation of such systems, determining the economic feasibility of the proposed biorefinery system. The theoretical part was based on reverse logistics and mining waste related literature and.
Reverse logistics can be defined as the reverse process of logistics. Traditionally, reverse logistics has been viewed primarily as the process of recycling products. Reverse logistics is the process of planning, implementing and controlling the efficient and effective inbound flow and storage of secondary goods and related information for the purpose of recovering value or proper disposal. The reverse logistics process is illustrated in figure 1. Jan 12, 2018 a facet of the reverse logistics process is that companies should offer end of life recycling for items they sell. A company has varied disposal options to choose once a product has been returned. Because we are a leader in supply chain management, you can rely on our experience in product handling, inventory and transportation to protect your highvalue products and customer relationships, to an unparalleled degree. Reverse logistics is a type of inbound freight that most companies are losing money on. Reverse logistics must be convergent, collecting used product from many points and transporting them back to one or more manufacturing locations. Unlike reverse logistics, the traditional logistics process is focused on making sure that there is the management of the product flow from the manufacturer to consumer. When a product is moved through the supply chain network from the distributor to the customer, this is the traditional logistics, or forward logistics. The following are common types of reverse logistics. Reverse logistics was traditionally defined as the process of moving a product from its point of consumption to the point of origin to recapture value or ensure proper disposal. In attempting to better manage the constant flow of returned goods, manufacturers have identified target areas key to streamlining the reverse logistics.
The role of reverse logistics in the concept of logistics. Therefore, they just focus on trying to reduce the cost of returns processing. Reverse logistics is a process whereby companies can become more. Aug 21, 2017 reverse logistics is any process that involves moving things from the customer back to the producer. It is due process of most online consumers to carefully scrutinize the return process offered by the online retailer. Our particular objective was to view the management of the reverse logistics process from a holistic supply chain approach. But in todays era of the fickle ecommerce customer, the reverse loop represents an untapped opportunity for hardworking, imaginative logistics managers and their thirdparty logistics partners. Beyond answering what is reverse logistics, we will also cover the history of reverse logistics, the benefits of reverse logistics and why its a rising practice, especially in aftermarket industries, and then talk about some uses of reverse logistics by shippers and how using a logistics services provider can give you the leg up in this. The state of the field then provides the structure for a delphi study on the key factors in a reverse logistics process. Dhl s reverse logistics services provide significant cost savings and improved efficiencies to retailers in any market. As retail returns grow, so do the challenges and opportunities for understanding consumer behavior and improving future sales. Reverse logistics also known as product return is a part of ecommerce fulfilment that cannot be overlooked. Reverse logistics resume samples and examples of curated bullet points for your resume to help you get an interview. Returns management is the supply chain management process by which activities associated with returns, reverse logistics, gatekeeping, and avoidance are managed within the firm and across key members of the supply chain.
Save your documents in pdf files instantly download in pdf format or share a custom link. A facet of the reverse logistics process is that companies should offer end of life recycling for items they sell. 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. Walmart reinvents the returns process as amazon tries to play. Finally, regardless of your particular industry segment, one of the core reverse logistics competencies is the ability to track the movement of products and componentsboth in the forward and reverse channels. During the unloading process, the dc team needs to be watchful and catch any number of possible problems, such as missing or damaged cartons, wrong product. Reverse logistics is any process that involves moving things from the customer back to the producer. The reverse logistics process begins when one or more things occur at destination. The council of logistics management has defined reverse logistics as referring to the role of logistics in product returns, source reduction, recycling, materials substitution, reuse of materials, waste. Reverse logistics is the process of moving goods from their typical final destination to another point, for the purpose of capturing value otherwise unavailable, or for the proper disposal of the products.
Reverse logistics are those used to manage the reverse movement of goods, from the end user to the manufacturer, or even back into raw materials through recycling. It is one of the fastest developing fields of business logistics, with the result that it is continuously changing in scope and significance. Producers have discovered value within returned assets and the benefits of streamlining repair, return and product reallocation processes. Therefore, maintaining an effective and efficient reverse logistics process has moved to the forefront as a key capability for logistics and manufacturing firms. The reverse logistics process includes the management and the sale of surplus as. 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. We also provide an overview of key trends and best practices that will power the reverse logistics process going forward. Schematic representation of the direct and reverse logistics processes. Reverse logistics a wellplanned, customized reverse logistics strategy will reduce storage and distribution costs, improve brand reputation, create more sustainable business practices, and satisfy customer demands. Managing returns and reverse logistics sample assignment in operations strategy cover page apple inc managing returns and reverse logistics. The objective of logistics process is to get the right quantity and quality of materials or services to the right place at the right time, for the right client, and at the right price. Reverse logistics is an integral component of the supply chain and manufacturers have come to realize that an effective reverse logistics program is an important and strategic part of their business profitability and competitive position.
298 8 7 1529 402 341 916 1053 391 1045 1343 1382 117 927 1293 896 1327 589 1148 1067 416 1363 1370 784 1176 887 1425 1411 365 929 1469 322 515 1567 1072 12 627 862 699 1194 61 12 86 427 1098