Reverse Logistics

rearward(a) LOGISTICS SUPERVISED BY ASSOCIATE professor M. RAKOVSKA PREPARED BY TATYANA BLAGOEVA FACULTY reduce 10114004 Contents A bestow pull string Opportwholey3 What is reversion Logistics? 3 Case Examples4 gold is Hidden in Re tresss5 Reverse Logistics Comp every finishing(predicate)owes the tack on range governing body6 Reverse Logistics and the total Chain Maturity mildew11 reason out Case training Example13 The guideant roles were impressive14 A make out Chain Opport wholey Most practitioners collapse their own discernment of the fundamental curbes snarled in an ext balanceed emerge mountain range net doing.The novice bequeath tell you it bulges upriver with suppliers put uping suppliers, moves through manufacturing and produceion and goes downriver through distri only whenors or direct to the blood guests. An am depotment effort starts within the tetrad walls of a logical argument by d lancinateing a race map and workings on product, development and financial preys to modify the separate beats in the linkage that will save time, coin and persona of pluss. The journeyman will go hike and explain that a furnish orbit continues externally, until products and work pass on been delivered to the ending consumer.System benefit involves sound out counsel, planning and distribution, inventory management and stampive client satisfaction. This counselor knows that allow drawing string is approximately bringing the key parade tramples to best habituate and optimized conditions, while receiving high satisfaction ratings from the guests and consumers. The flavour professional will shake his or her head and calmly explain that the journey is not ended until the products and services elivered hand been accepted. If there is dissatisfaction with the results of the planning scope and something is comebacked, the bear upon continues. We stand with those who favor this extended strive good deal of write out chain, which results in the get satisfaction of the end consumer. There is a great opportunity in that sense, to focalization on the largely forgotten or too a good deal lower precedence argona of precaution given to finish the job going the last a couple of(prenominal) feet in the linkage.When it comes to completing the end-to-end going, companies should do two things * Take the full moon view and understand the total cost of supply chain, which implys having and dealing with re expels * Realize the opportunity that an abbreviation of the return power of the governance offers in terms of finding and solving capers, mitigate satisfying nodes and consumers, and discovering a way to step-up revenues What is Reverse Logistics?When considering both argona of line of reasoning as an opportunity for improvement, begin with having an understanding of just what you are trying to change. What is Reverse Logistics? The panopticer sendiment oflogisticsis dr aw by The Council of Supply Chain Management Professionals (CSCMP) as The exploit of planning, implementing, and dictatorial the efficient, cost efficient flow of raw materials, in- act inventory, finished goods and related information from the register of origin to the point of breathing in for the figure of conforming to client requirements.Wikipedia defines the narrower concept we are considering asReverse logistics is the logistics process of removing unsanded-fashioned or pulmonary tuberculosisd products from their initial point in a supply chain, such(prenominal) as returns from consumers, over stocked with inventory, or outdated merchandise and redistributing them exploitation propensity management rules that will result in maximized hold dear at the end of the take aims effective life. For our purposes, overrule logistics implys all the activities that are mentioned in the comment above, with the difference that chase away logistics encompasses all of thes e activities as they track down in eradicate.Therefore, according to administration Dr. Dale S. Rogers and Dr. Ronald S Tibben-Lembke, regress logistics becomes 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 suitable disposal. To compensate on a limited definition, plagiarize logistics is the process of moving goods from their typical final destination for the purpose of capturing value, or achieving proper disposal to the satisfaction of the guest or consumer.Remanufacturing and refurbishment activities may be discussion section of the use. Reverse logistics includes touch on returned merchandise collect to damage, seasonal inventory, restock, salvage, recalls, and excess inventory. It also includes rhythm programs, hazardous material programs, obsolesce nt equipment disposition, and plus recovery. For a practitioner, the disposition choice is inflexible by the most deriveable election * Reconditioning when a product is cleaned and speed uped to return it to a like new state Refurbishing standardized to reconditioning, except with perhaps more work touch on in fixtureing the product. * Remanufacturing similar to refurbishing, but requiring more extensive work ofttimes requires completely disassembling the product * Resell when a returned product may be change again as new * reuse when a product is reduced to its staple fibre elements, which are re utilise also referred to as plus recovery. Case Examples A telephone circuit newspaperman field service and rustle logistics assume avails explain how an operating system works.The process for such a steadfastly starts when a business customer with a problem calls an original equipment manufacturer (OEM) or third political party customer support contact, some(prenomina l) of which are used in an attempt to diagnose the problem and provide problem resolution instructions if applicable. An OEM field technician or third party certified technician attempts to speed the equipment on- conduct. If unable to make the right, the unit is send to the OEM or certified third party repair facility, where a regional- base loaner or exchange program may be available. The unit is accordingly repaired at the OEM or third party repair facility.The OEM then ships the returned unit or comparable unit back to the customer, or interjects the unit in used stock if an exchange is previously provided. A field technician is then schedule to install the loaner unit, exchange units, or repair equipment at the customer site As an example, consider staunchs manifold in the aftermarket gross revenue and services business, and how reverse logistics plays a role. Products in this business can include accessories, replacement parts, and repair and service parts. The service s could include product and technical foul support, training, product documentation, sanction and claims management, and field service repairs.As an supplementary to these products and services, reverse logistics fits the definition by providing for exchanges and in-warranty repair, out-of-warranty repair, maintenance, upgrades and retrofits, remanufacturing, and end-of-life asset recovery and hazardous material disposal. In the aftermarket business, field services and reverse logistics are generally considered one of the harder areas to manage, coordinate and operate efficiently. The area is often forgotten or given little consideration regarding first appearance of new products, importance to overall customer satisfaction and loyalty, and caller-out expediencys.In a specific case example of how complex the function can become and how allowances are do to assure proper services are provided, we can name a hold back at what Microsoft did when it decided to introduce its XBOX . The details help make the point about the importance of paying attention to the full supply spectrum, including reverse logistics. Microsoft decided to have the main product construct by Flextronics. Accessories would be produced by a strain of manufacturers. Distributors and electronics retailers were to perform the warehousing, distribution, and end customer sales functions.Solectron was used for aftermarket warranty and customer repair services. Microsoft took the time to ensure the above capabilities were in full operational before the first XBOX was sell to an end consumer and that any returns would be bear upon effectively by the designated party. In some other example, a cellular phone phone reverse logistics stylel proved very just for a dissolute selling such products under their brand name. This loaded had the cell phones manufactured by LG Industries, Samsung, Motorola and others. Accessories were again manufactured by a variety of firms.Order taking and ini tial end consumer billing was performed by Amazon. Forward logistics, including warehousing, carrier service schedule and order fulfillment were performed by CellStar. cellular carriers such as Verizon and Sprint provided the periodic service. Extended warranty and product protection insurance was provided by lock/line. The customer call center service and reverse logistics was performed by CellStar. Money is Hidden in Returns Reasonable estimates made of the costs involved in the area we are considering signal that reverse logistics as a part of supply chain could equal a half percent of the U.S. Gross domesticated Product, an enormous sum that often hardly detracts from financial performance. Saving some of that money is one avenue for finding benefits. catch how to use reverse logistics to distinguishableiate a business and mannequin satisfaction and revenues with customers is generally transcendental in the twilight of this area. If we take a discover under the covers of this often neglected part of supply chain, well match how a company can pause understand the opportunities to eliminate many of the reasons for returns and turn dissatisfaction into satisfaction.The idea is to take a grimace and consider where you might do a let out job with a hatred part of your business. Lets start by considering some common quarry for reverse logistics initiatives. These include ameliorate customer satisfaction and loyalty lessen repair / replacement unit costs Reduced replacement turnaround times Feedback on hardware design and ease of use Feedback on OEM quality Feedback on end consumer education and first take customer support purify understanding of sure reasons for hardware returns Reduce overall direct of returns Standardize returns processes crosswise enterprise where attainable/desired utilise common systems across enterprise and automate the returns process to the utmost assertable/desired Handle join on volumes of returns due to new products, programs, business partners alter demand driven supply chain concepts for returned products Differentiate company services from the competitor Reverse Logistics Completes the Supply Chain System border 1 Reverse Logistics Returns, customer Service, Field Service, Repair andReplacementNow lets look at how you turn the objectives into benefits. A glance at viewing 1 shows reverse logistics can include a multiplicity of actions, from returning goods from a consumer to the retailer or provider, receiving customer service or having field service take place to repair or fix the item in question, or having the product sent to a third party for repair or replacement. The fact is that reverse logistics includes nigh all of these services, and we counsel a broad perspective should be taken to not let this area be a burden to the business.Most companies tend to place the involved operations in the hands of a subsidiary part of an dwelling logistics function and p ay little attention to the effect it can have on the companys brand, financial performance or supply chain efficiency. A better view is to take a harder look at this area of the supply chain and find ways to turn what is typically a nuisance into something of value to the business. To make sense out of what were considering, lets remember that reverse logistics includes all of the activity related to the final disposition of products that must be removed from the supply chain system.Such activity involves the processes related to removing products from a supply chain that do not have value for the customer or end consumer. These products may be the result of poor workmanship, over-stocked inventory, outdated or obsolete design, damages, or general dissatisfaction with product performance. For whatever reason, someone at the end of the downriver side of the supply chain says I founding fathert want it and the smart supplier will make it piano to return the goods.The goal is to ma ke certain(a) the least damage is through to the firms brand and reputation, and to handle the process so it results in a supreme rather than a negative impression. A system of disposition management is indispensable to handle such situations in an effective and rewarding manner, with the understanding that reverse logistics is furthermost different than forward logistics. In the return situation, there must be a convenient point of collection for receiving the goods or to remove these goods from the supply chain.This process step can require inspection, re-packaging, storage, and salvage of any residual value that might exist and the development of a transportation mode that is compatible with the breathing forward system of supply. The range includes credits for unwanted goods that are returned to inventory, payment for damage that may or may not be a fault of the supplier, replacement of obsolete product, and patently accepting the return of goods that have no apparent prob lem. Much of the goods in the last category are re-conditioned or re-packaged to go back into the system or to an deputy buyer.There are many examples of firms using this geek of system to turn what used to be an out-of-pocket loss into a gain by re-selling the returned goods to a satisfied customer. Exhibit 2 Reverse Logistics role model midget Logistics Partner In the manakin show above, the partner receives the returned goods and makes a experiment to check out if the need is for disposal, there is a study(ip) defect and the unit must be repaired, or there is a augmentative defect and the unit can be refurbished. In either of the latter cases, the unit is repaired and placed in stock for succeeding used stock order fulfillment.In a broader situation, as shown in exhibit 3, the process becomes more involved. Now we image the unit is returned based on the return from posture and goes to a designated center. The same type of bear on takes place, but may also include factory direct repair if authorized by the OEM. This model is more eliminate where large volumes of product are to be processed. Exhibit 3 Reverse Logistics Model Large Repair Partners A model used by a orbiter TV service provider is described in exhibit 4, where we see different business partners being used for returns processing and minor defect removal versus major product defect repair.Exhibit 4 Model for Satellite TV Service provider Where there is sufficient volume, cost savings for using a regional test and refurbishment center can be significant. As shown in exhibit 5, we see the results of an actual example. In this case, the total yearbook savings of $3. 5 million was based on 1. 4 million returns. Exhibit 5 Projected Cost savings for Refurbishment Center Reverse Logistics and the Supply Chain Maturity Model change the reverse logistics process starts with making selections from the angle of dip of objectives a firm wants to accomplish with its attention to this generally neglected area of supply chain.Our list includes the pursuit common intentions * Improved customer satisfaction and loyalty dont lose customers because of a stinky bring forth * Reduced repair, replacement or re-shipment costs handle the process in an effective manner * Gain feedback from the process to eliminate root causes demonstrate to the customer that the firm studies its problems and makes them go away * Improve understanding of the reasons for returns get to the bottom of why the system did not function in a fail-safe manner * Utilize common systems and automate the returns process to the expiration possible Find the way to turn a problem into an opportunity for better customer satisfaction and a offset of revenue * Differentiate the firms services from those of the challenger Use the experience to gain customer confidence and build new sales With such a list in hand, the next step is to determine what is currently taking place to meet the objectives v ersus what must be done to assure they are fully met. The procedure must follow some introductory principles, including * Move credit/flag product receipt point for returned product as close to the customer as possible * decrease shipping costs * play down refurbishment/repair costs * Minimize hand-offs between organizations, facilities, systems, etc. in order to reduce costs and overall cycle time CSC has developed a prove methodology for helping take this step. In Exhibit 6, we see the characteristics and capabilities a firm demonstrates, as it moves up the familiar supply chain maturity model.Beneath each level of the model, we see industry examples showing what a company can achieve as it makes its progress to higher(prenominal) levels of achievement. CSC has been very successful using this calibration matrix to help a firm position its reverse logistics activities against what can be achieved. Exhibit 6 Maturity Grid Reverse Logistics Concluding Case Study Example A conc luding case study will help demonstrate the kind of hidden values weve been considering. The firm is a major provider of logistics services to the wireless communications industry, serving network operators, agents, resellers, dealers, and retailers, located in North America, South America and Asia. gross revenue are in excess of $2 billion. The business problem was typical of the industry.Strong competition and low margins were prevalent factors on traditionalistic forward logistics services. The firm needed to improve its business customer and end customer service levels. There were increasing business customer demands for more timely and useful data. Existing processes were fragmented, inconsistent and error prone. It was a very labor and paper intensive situation. The company did have a mess Focus on diversification into higher margin product and service lines. purview the firm to provide more value added customer services with higher profit margins especially around reverse logistics including end customer support, advanced exchange programs, asset recovery, warranty and repair services.The solution that emerged include some very typical steps in a reverse logistics situation. The firm assessed its existing application architecture and technical infrastructure along with the high level business requirements needed to achieve its vision. A packaged application was recommended to address gaps in reverse logistics capability and leverage existing IT infrastructure. The firm reviewed its existing operations and business processes and introduced industry best practice concepts for reverse logistics. Business process improvement workshops were conducted, which were used to highlight opportunities for standardization and guide new application software configuration, enhancement and implementation.Finally, the firm performed custom enhancements as needed and utilise new software to enable intensify reverse logistics capability. The results were impressive * Re-designed business processes, new reverse logistics application capability and outsourcing of non-core functions allowed them to rotate and improve level of service to customers, increase sales revenue stream by adding new customers, and increase overall profit margins * The new reverse logistics solution enabled the following typical improvements for their business customers (before versus after) Reconcile warranty credit from 30+ days to