What Goes Around Comes Around
Components of a Best in Class Reverse Logistics Operation
Overview
In order for a company to be the best in class at Logistics, they must connect and close the loops between the forward distribution functions and the reverse logistics functions within their supply chain. Only then can you boast that your company has a world class logistics operation. Many companies strive to be the best at Forward Distribution, but a well run Reverse Logistics Operation that focuses on the green side of materials management is what we it typically takes to be best in class. This report attempts to give you an overview of some of the important characteristics of a best in class reverse logistics process.
Footprint
The very word “Logistics” is defined as the movement of materials. With that said; we can’t emphasize enough the importance of how you’re “Footprint” of aggregation and transportation points are in attaining closed loop movement efficiency. 4PRL can apply the latest modeling applications to your current materials movement as well as locations to determine your effectiveness. You need to be able to answer the basic questions: Are my reverse flows of material taking advantage of the existing distribution network? Are returned material aggregation points well defined with specific processes and controls that help maximize the asset value? Are there opportunities to minimize the handling of returned materials?
Processing Facilities
The very foundation of a well managed closed-loop reverse logistics operation is an efficient re-distribution, consolidation, trans-ship and materials processing model. A well equipped reverse logistics processing facility houses every functionality and aspect of the reverse supply-chain and is fed by an information network of professionally managed decision tools. The reverse end of the supply chain can involve many product enhancement decisions with each having the potential to be sent out for repair, refurbishment, or scrap processing. Remember, movement is an expense and movement makes the asset more prone to damage, loss, or error.
Environmental Citizenship
Conserving natural resources and protecting our environment may be a new concept to some industries, but we employ experts that have specialized in this field since 1982. We will outline how you can implement the most responsible reverse logistics processes driven by sound decision models in every step of the reverse supply chain. Beyond the environment you need to ask: Are we protecting our employees and community from material related hazards? Are the suppliers we use in full compliance or do we have unforeseen risks that can significantly impact our reputation and bottom line?
What exactly is Closed Loop Reverse Logistics?
Reverse Logistics is defined as the management disciplines that take something back from our forward markets and remarket the inventory, components or resulting scrap classifications in a documented, orderly fashion. Experience and continuous process improvement are what enable these functions to surpass customer expectations. “A complete and thorough integration of reverse supply-chain functions, information, de-installation, transportation, warehousing, material handling, repackaging, resale, reclamation, and recycling, all managed under one management domain (one roof if possible) is what we define as a closed-loop Reverse Logistics operation.” Additionally, significant value can be added through product enhancement processes for testing, repairing, refurbishment and enhancement of the cosmetic appearance.
A well run closed loop reverse supply chain logistics program should have five functional focuses. Keep in mind that remarketing is your ultimate goal for product disposition. To correctly manage the remarketing decision you will need a five tier process;
Tier I - Returns
Tier II - Reuse Management
Tier III - Asset Management
Tier IV - Resale Management
Tier V – Disposition Management
Remember! The reverse logistics function should be treated as a business with specific financial goals, not the returns department. Give us a call if you are ready for this paradigm shift (330-575-4185).