Reverse Logistics Process PDF

*SC001 REVIEWER FOR MIDTERMS* **[LOGISTICS (FORWARD)]** - THE FORWARD LOGISTICS PROCESS (TRADITIONAL SUPPLY CHAIN) Merchandise Delivery Path Manufacturer \> Supplier \> Retail store \> Consumer **[REVERSE LOGISTICS]** - - - - **[REVERSE LOGISTICS A COMPETITIVE TOOL]** TO REM...

*SC001 REVIEWER FOR MIDTERMS* **[LOGISTICS (FORWARD)]** - THE FORWARD LOGISTICS PROCESS (TRADITIONAL SUPPLY CHAIN) Merchandise Delivery Path Manufacturer \> Supplier \> Retail store \> Consumer **[REVERSE LOGISTICS]** - - - - **[REVERSE LOGISTICS A COMPETITIVE TOOL]** TO REMAIN COMPETITIVE AND DIFFERENTIATED, THE ORGANISATION ACROSS THE WORLD ARE SHOWING SPEED AND RELIABILITY IN SERVICE OFFERINGS SUCH AS - - - - - THESE SERVICES ADD TO THE COMPETITIVENESS OF AN ORGANISATION. OPERATING IN A REGULATORY ENVIRONMENT & CREATE CUSTOMER VALUE BY PROVIDING A CLEAN ENVIRONMENT THROUGH REVERSE LOGISTICS SERVICES WITHOUT ANY EXTRA COST TO THE CUSTOMER. **[REASONS FOR REVERSE LOGISTICS]** - - - - - - - - **[SCOPE OF REVERSE LOGISTICS]** REVERSE LOGISTICS, THOUGH CONSIDERED AS A DRAIN ON COMPANY PROFITS, IN TODAY\'S COMPETITIVE MARKETS, MORE AND MORE MANUFACTURING FIRMS ARE PLANNING OF INCORPORATING THE REVERSE LOGISTICS SYSTEM IN THEIR SUPPLY CHAIN PROCESS FOR FOLLOWING REASONS: - - - - THE REVERSE LOGISTICS NETWORK CAN BE USED FOR VARIOUS PURPOSES SUCH AS REFILLING, REPAIRS, RE-FURBISHING, RE-MANUFACTURING ETC. DEPENDING ON THE NATURE OF THE PRODUCT, UNIT VALUE, SALES VOLUME AND DISTRIBUTION CHANNELS. **[1. REPAIRS AND REFURBISHING]** REPAIR IS A REGULAR FEATURE IN SERVICE BASED PRODUCTS UNDER A WARRANTY PERIOD AND ALMOST ALL CONSUMER DURABLES NEED REPAIRS ON A REGULAR BASIS. REFURBISHING IS DONE TO GOODS RETURNED BY DAMAGE, DEFECTS OR BELOW PAR PERFORMANCE DURING THE WARRANTY PERIOD. MANUFACTURER ESTABLISH THE REVERSE LOGISTICS SYSTEM, NOT ONLY FOR OFFERING FREE SERVICE DURING THE WARRANTY PERIOD BUT ALSO FOR EXTENDING THE SERVICES BEYOND THE WARRANTY PERIOD ON A CHARGEABLE BASIS. THE SYSTEM OPERATES THROUGH THE COMPANY\'S SERVICE CENTERS WHERE REPAIR AND REFURBISHING TAKES PLACE. COLLECTION OF DEFECTIVE PRODUCTS IS DONE, THROUGH THE DEALERS\' NETWORK. THESE COLLECTED PRODUCTS ARE SENT TO THE NEAREST SERVICE CENTRE FOR OVERHAUL, REPAIRS OR REFURBISHING.  **[2. RE-FILLING]** REVERSE LOGISTICS IS INTEGRATED TO THEIR CHAIN BECAUSE OF THE REUSABLE NATURE OF PACKAGES SUCH AS GLASS BOTTLES, TIN/PLASTIC CONTAINERS & METAL CYLINDERS ETC. IN CASE OF SOFT DRINKS, THE DELIVERY VAN DELIVERS FILLED BOTTLES TO RETAILERS (A, B, C) ENROUTE AND COLLECTS THE SAME NUMBER OF EMPTY BOTTLES FROM THEM FOR DELIVERY TO THE FACTORY. NO EXTRA TRANSPORTATION COSTS ARE INVOLVED IN THE PROCESS AS THE SAME DELIVERY VAN ORIGINATES AND TERMINATES ITS JOURNEY AT THE FACTORY WHERE THESE REUSABLE BOTTLES ARE REFILLED FOR RE-DELIVERY TO CUSTOMERS. THE ARRANGEMENT IS DONE THROUGH A HUB AND SPOKE DISTRIBUTION SYSTEM. **[3. PRODUCTS RECALL]** THIS IS AN EMERGENCY SITUATION WHEREIN THE PRODUCTS DISTRIBUTED IN THE MARKET ARE CALLED BACK TO THE FACTORY BECAUSE OF ANY OF THE FOLLOWING REASONS: 1\. PRODUCT NOT GIVING THE GUARANTEED PERFORMANCE 2\. QUALITY COMPLAINTS FROM MANY CUSTOMERS 3\. DEFECTIVE PRODUCTS CAUSING HARM TO HUMAN LIFE 4\. PRODUCTS BEYOND EXPIRY DATE 5\. PRODUCTS WITH DEFECTIVE DESIGN 6\. INCOMPLETE PRODUCT 7\. VIOLATION OF GOVERNMENT REGULATIONS 8\. ETHICAL CONSIDERATIONS 9\. SAVE THE COMPANY IMAGE PRODUCT RECALL PUTS A HUGE FINANCIAL BURDEN ON THE COMPANY BUT IN THE COMPETITIVE SCENARIO THE COMPANIES CONSIDER \"RE-CALL\" AS AN OPPORTUNITY TO INCREASE CUSTOMER SATISFACTION.. **[4. RECYCLING AND WASTE DISPOSAL]** LEFTOVER MATERIALS, USED PRODUCTS AND WRAPPER/PACKAGES WASTES ARE CAUSING ENVIRONMENTAL POLLUTION & CREATING PROBLEMS FOR DISPOSAL. IN MANY COUNTRIES, GOVERNMENTS ARE DEVISING REGULATIONS TO MAKE MANUFACTURERS RESPONSIBLE FOR MINIMISING WASTE BY WAY OF RECYCLING PRODUCTS. [RECYCLING PROCESS] - - - - **[5. RE-MANUFACTURING]** MANUFACTURERS IN DEVELOPED COUNTRIES ARE PUTTING IN PRACTICE A NEW CONCEPT OF RE-MANUFACTURING. DURING THE USAGE OF THE PRODUCT IT UNDERGOES WEAR & TEAR. WORN OUT PARTS ARE REPLACED WITH NEW ONES AND THE PERFORMANCE OF THE PRODUCT IS UPGRADED TO THE LEVEL OF A NEW ONE. SIMILARLY, EQUIPMENT SOLD CAN BE CHECKED AFTER USE TO THE REMANUFACTURING PROCESS AND BE BROUGHT BACK TO THE REMANUFACTURING UNIT. THE INVESTMENT IN REMANUFACTURING & RELATED REVERSE LOGISTICS SUPPLY CHAIN CAN BE JUSTIFIED ON THE BASIS OF ECONOMIES OF SCALE. **[SYSTEM DESIGN CONSIDERATIONS (DRIVERS IN REVERSE LOGISTICS)]** THE SUCCESS OF REVERSE LOGISTICS SYSTEM IN ACHIEVING THE DESIRED OBJECTIVES DEPENDS ON THE EFFICIENCY AND EFFECTIVENESS OF FOLLOWING SUB-SYSTEMS [1. PRODUCT LOCATION] THE FIRST STEP IN THE CALL BACK PROCESS IS TO IDENTIFY THE PRODUCT LOCATION IN THE PHYSICAL DISTRIBUTION SYSTEM OF THE FIRM. PRODUCT LOCATION BECOMES MORE DIFFICULT AFTER IT IS SOLD AND HANDED OVER TO THE CUSTOMER. IT IS A BIT EASIER IN THE CASE OF INDUSTRIAL OR HIGH VALUE PRODUCTS DUE TO THE LIMITED NUMBER OF CUSTOMERS & PERSONAL INTERACTION WITH THE CLIENTS DUE TO DIRECT SELLING [2. PRODUCT COLLECTION SYSTEM] ONCE THE PRODUCT LOCATION IS IDENTIFIED, THE COLLECTION MECHANISM GETS INTO OPERATION. THIS CAN BE DONE EITHER THROUGH COMPANY\'S FIELD FORCE, CHANNEL MEMBERS OR THIRD PARTY. HOWEVER, PROPER INSTRUCTIONS HAVE TO BE GIVEN TO MOTIVATE THE CUSTOMER FOR RETURNING THE PRODUCTS. [3. RECYCLING/DISPOSAL CENTRES] THESE MAY BE THE COMPANY\'S PLANT/ WAREHOUSES OR SOME FIXED LOCATION IN THE REVERSE LOGISTICS NETWORK. THE CALLED BACK PRODUCTS ARE INSPECTED BEFORE THEY ARE FURTHER PROCESSED FOR FURTHER REPAIRS, REFURBISHING, REMANUFACTURING OR WASTE DISPOSAL. INVESTMENTS IN FACILITIES FOR THESE ACTIVITIES DEPEND ON THE OBJECTIVES OF THE SYSTEM, COST IMPLICATION, COMPLEXITY OF THE OPERATIONS & EXPECTED GAINS. **[COST IMPLICATIONS]** THE REVERSE LOGISTICS SYSTEM IS A COST CENTRE. HOWEVER, THESE COSTS ARE INCURRED FOR ACHIEVING COMPANY\'S CERTAIN OBJECTIVES AND CAN BE ATTRIBUTED TO THE FOLLOWING ACTIVITIES 1\. PRODUCT LOCATION (INVESTMENT & OPERATING COSTS) 2\. TRANSPORTATION 3\. PRODUCT COLLECTION (CUSTOMERS \> RETAILERS \> PLANT) 4\. DISPOSAL (PLANT \> SUPPLIERS/DISPOSAL) 5\. REFILLING, REPAIRS, REFURBISHING, REMANUFACTURING, RECYCLLING 6\. DOCUMENTATION (FOR PRODUCT TRACKING AND TRACING DURING ENTRY, EXIT AND FLOW IN THE SYSTEM)