I lived and worked in Germany a few years ago I remember about 1999 or 2000 the German government passed
a law that if you sold a household appliance you had to pick up that household appliance at the end
of its life.
When the customer was through with it.
In other words refrigerators and freezers and washers and dryers could no longer go to the dump for
The manufacturer was now responsible for proper disposal.
I worked for Ximenes corporation at the time.
So this was a pretty important announcement if you’re not familiar with them.
Siemens is a lot like General Electric.
In short they make all those household appliances and more end of life appliances.
We’re now going to join normal returns into the existing reverse logistics operations reverse logistics
is exactly what it sounds like.
We are going to move goods in the opposite direction through our supply chain from the customer back
The purpose of reverse logistics is to move those goods to properly dispose of them as it were those
appliances or to recover value as with returns from overstocked retailers.
We might also be handling products that are returned for trade in or for repairs under warranty agreements.
If the return is for a product defect then we also must be very sure to properly move information back
to the right parts of our company like the factory or its suppliers or your design team.
To enable reverse logistics we have to have enough transportation vehicles without disrupting our deliveries
to our customers.
That is a very important consideration.
We certainly have to be knowledgeable of our sales patterns so we can predict when and where we are
most likely to have returns for any of those reasons I mentioned.
We also have to consider the use of distribution centers for reverse logistics.
Some companies will designate distribution centers specifically for returns management.
Other companies will process returns in the same centers that distribute goods to customers often setting
aside a separate area for those return activities.
Still other companies will hire someone else to do this for them.
An expert in recycling reuse resale and salvage this decision is very dependent upon the volume and
the type of returns you need to manage.
I think you can see that the most important consideration here is to make sure your reverse logistics
activities do not disrupt your forward logistics capabilities.
Because of the products they make.
Well some companies are already set up for reverse logistics and advance companies that sell automobile
tires for example have systems in place to move worn out tires to a retreaded and then sell those retreaded
Some printer companies receive empty ink cartridges clean them refill them and return them to their
customers for a fee.
Or they may send the refill cartridges to a retailer to be sold again.
Technically these companies have a closed loop supply chain by virtue of their business.
They have set up a type of reverse logistics in advance and normally they operate a separate and distinct
channel to make that happen.
Because of growing environmental concerns and regulations like the law that was passed in Germany.
Reverse logistics can have a significant impact on the company’s finances.
If reverse flows are not managed properly they can become quite costly.
Done right proactive management of returns can have a positive effect as reduce and salvage are optimized
and we are seeing increased applications of lean principles here as companies want to decrease the processing
times and minimize handling as more and more companies and their supply chains become green.
Reverse logistics becomes more and more important than simply categorizing returns based on defects.
Recycle salvage and such may show you which areas need more emphasis than others.
These kinds of activities lead to a better understanding of reverse logistics needs for your company.