Articles



Reverse Logistics

9/18/2013 by Edward Baker


"Putting It Back"

The reverse logistics pipeline is getting a workout these days as more
warehouses concentrate on items that make their way back for refurbishment or disposal.
It wasn't that long ago that the term reverse logistics; held no meaning many
manufacturers. That's because while many warehouses have long been involved
in reverse logistics, the term and the job of handling returned products has
only recently gained attention.
At the recent Reverse Logistics Management Congress, sponsored by the Society
of Logistics Engineers (SOLE) and cosponsored by WERC, representatives from
companies addressed the issues surrounding the reverse logistics process.
Because there are so many facets to reverse logistics, its definition is
complex. But for many warehouses, it involves handling those goods that are
being returned to a manufacturer, often due to damage. For others, it might
involve sending used equipment on to third-world countries or to charity,
where products can find a new life. Another facet of reverse logistics is
disposing of those products that can no longer be used or that might be
considered a hazardous material.
Today's focus on the environment is one of the driving factors behind reverse
logistics. Where companies once might have tossed a returned product onto the
waste pile, they now think twice and try to refurbish products that could
find a second life. The bottom line also pushes the focus on reverse
logistics. Many companies now see a financial advantage to repairing products
and putting them back into the supply chain, rather than manufacturing anew.
Private vs. Third-party
Out of this focus on reverse logistics, some third-party providers are
offering a new type of warehousing service dedicated to the returns process.
Turning the job of reverse logistics over to a third-party provider allows
customers to concentrate on their core competency. The time saved when a
provider handles returns as one of the benefits customers can enjoy when
outsourcing reverse logistics tasks.
Other warehouses choose to go it alone when it comes to reverse logistics,
finding it more effective to use their own facilities for housing and
handling returned products. Companies as varied as Xerox and Avon choose to
perform their own returns for the same reasons companies keep warehousing
in-house.
In order to keep up with the need for managing returned products, however,
the warehouses that choose to handle reverse logistics themselves today often
find it necessary to allocate special space to those tasks. This can require
extra manpower, new equipment, and of course, floor space. Its these factors
that must come into play when making the decision to keep reverse logistics
in house or outsource the task.
Another concern when weighing the issue of outsourcing returns
responsibilities is volume.
No matter which route your company takes, its clear that reverse logistics is
an issue in the spotlight that is only getting bigger.


Discussion


Comments

  1. Casey Kleindienst wrote:

    Eddie--
    Thank you for this elegant and informative website. I demo the Prime Logistics site each semester for my Purchasing and Supply Management class as an example of a top-rate third party logistics company. The quality of the web content improves every year.
    Best~
    Casey

    10/2/2013


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