The importance of reverse logistics essay

Existing orders would result in delays in fulfillment. The final step is distribution and sales of the reconditioned products.

Small business owners also conduct distribution logistics with inventory and warehousing. If there were no drains built into the system, no way to deal with the items, the system would drown in this unwanted material.

Logistics: What It Is and Why It’s Important to Your Company

Some of the product may enter the secondary market through other paths. They will also take care of end of life recycling as well as regulatory-compliant disposal, and will also consolidate returns for shipment back to your facility in the US or directly to your vendor.

Another specialty includes logistics consulting services. Sears started in a small train station in Minnesota, while JCPenney began as a tiny general store in Kemmerer, Wyoming. It has been estimated that supply chain costs associated with reverse logistics average between 7 percent to 10 percent of cost of goods.

Paint that is returned from the buyer for any reason will need to be quickly broken down into its component chemicals and reintroduced into the manufacturing process. The time constraint refers to the amount of time available to complete a project. Finally, regardless of your particular industry segment, one of the core reverse logistics competencies is the ability to track the movement of products and components—both in the forward and reverse channels.

The more standardized and streamlined the processes are, the shorter the cycle time should be. This is also a valuable way to compare the efficiencies of different facilities Distance traveled: As a result, companies must minimize the time product stays in the reverse logistics system.

This represents approximately 0. Exhibit 1 summarizes these and other differences between forward and reverse logistics. The guiding principle here is simplification.

Product Recalls Product recalls are part of the reverse logistics process that merit special attention. If, for example, a company decides to export its product, it may hire a person or organization to help with distribution logistics.

Why not subscribe to our Blog? This is your logistics supply chain. When a company sells product to a salvage broker, that broker will turn around and sell that product to another broker or other secondary market, who then may sell it to the public.

This reduces the value of the inventory turns metric, which is typically used by management as a measure of the health of inventory management within the firm. It would have been much easier—and less costly—to have performed the recall differently.

How much value is recaptured? By setting an example for others, a company who recycles their end-of-life products embraces the wants of the public. Many of these companies offer returns processing as well. In Europe for example, environmental regulations require tire manufactures to recover and recycle one old tire for every tire produced 4.

The Path Forward Firms need to care deeply about how they manage product that did not sell in the primary channels.

The products sold to the secondary market are generally being sold for far below their original cost, so it might seem strange to speak about reverse logistics systems contributing to profits. Some companies may be willing to pay additional costs for proof of secure disposal.

Imagine what a retail store would look like if all returned and unsold items had to stay at the shop until they were sold. The customer doesn't care about how you make your product or what problems there are in getting it in his hands. Is the firm maximizing the profitability of product that did not sell well or has been returned by consumers?

Why not subscribe to our Blog? To manage the complexity that accompanies a good reverse logistics program, companies need to view it as a critical management activity. What these companies do not realize is that the effective management of reverse logistics has the potential to make them more profitable, and to add value to many other parts of their supply chain.Disposal Logistics, also known as reverse logistics, stands for all operations related to the reuse of products and materials.

The main function of this field is to reduce logistics cost, enhance service, and save natural resources.

The reverse logistics applications enable business organizations to make typical improvements for their customers such as improved Challenges include: Common challenge of reverse logistics is the dumping of returned materials because an organization has.

Reverse Logistics (RL) is an issue that has received growing attention in the last decades, due to the occurrence and simultaneity of several situations.

On the one hand, there is a verifiable concern about environmental matters and sustainable development, as the many legal regulations that have been passed in a number of countries prove. Reverse logistics can include gaining feedback to make improvements and to improve the understanding of real reasons for product returns From looking at the advantages and importance of reverse logistics; we can now see reverse logistics can play an important part in the growth of an organisation; having many financial, environmental and.

REVERSE LOGISTICS DEFINATION: Flow of surplus or unwanted material, goods, or equipment back to the firm, through its logistics chain, for reuse, recycling, or disposal. In other words, reverse logistics is the management of any type of returns from any customer with a specific purpose.

Join Steven Brown for an in-depth discussion in this video, The growing importance of reverse logistics, part of Logistics Foundations.

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The importance of reverse logistics essay
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