Recondition,
Repair, Repackage, Restock, Reuse or Recycle to Reduce Carbon Impact and
Recover Revenues
When
it comes to your supply chain, product lifecycle management may well be the
“new black.” The discipline aims to optimize value across the entire product
lifecycle, from the inception of an idea to the return, recovery and disposal
of parts or products.
Savvy
supply chain managers are seizing opportunities to drive efficiencies
throughout the product lifecycle. However, there’s one area that’s historically
been overlooked: reverse logistics. In the past, the product lifecycle ended
when the consumer walked out the door with a purchase. Returns management was a
cost center, with little to no visibility into what products/parts were in the
pipeline or what should be done with them.
Today,
however, the focus on product lifecycle management is changing. As it does,
companies are designing products with end-of-life processes in mind. They’re
also rethinking the processes associated with returning and disposing of goods.
Ready to make reverse logistics a strategic link in your product lifecycle
value chain?
Here
are five things you need to know:
1.
So, what is reverse logistics anyway?
Forward
logistics deals with the flow of products from factory to consumer. Reverse
logistics refers to all of the processes associated with returning products,
parts, and materials from end consumers. These activities include repair,
warranty recovery, redistribution, value recovery, product/service contract
returns, product recalls, used equipment and replacement parts for
refurbishment, resale or sale as raw material or end-of-life recycling. The goal
in all cases is to maximize asset recovery and supply chain efficiency, reduce
costs and improve the customer experience.
2.
Why is reverse logistics becoming a key initiative today?
A
perfect storm of factors is driving interest in reverse logistics. Of all
products sold, an average of eight to twelve percent are returned. The cost to
return those units is two to three times that of the forward logistics
activities that bring them to market.
At
the same time, the popularity of expensive electronic devices like smartphones,
tablets and smart TVs is exploding, amplifying the number of returns. So, too,
is the focus on environmental responsibility. E-waste is now the fastest
growing municipal waste stream in the United States. Every year, American
consumers dispose of an estimated 400 million electronic units. Of the 2.4
million tons of e-waste generated in 2010, only 27% was recycled. The remaining
73 percent went to landfills and incinerators. Today, 83% of e-waste laws hold
manufacturers accountable for collection, transportation and recycling of
products. Sustainable reverse logistics activities like repair, refurbishment,
repackaging, recycling and harvesting can help mitigate impacts.
These
trends, coupled with more flexible retail return policies, continuous
innovation, shorter product lifecycles and tough electronic waste regulations
are shining a light on reverse logistics as a key component of the product
lifecycle.
3.
Why is reverse logistics so critical to the hi-tech and electronics industry?
The
clock speed of product lifecycles is particularly fast for hi-tech and
electronic products. Consumers are constantly on the lookout for “the next big
thing”, which means innovation cycles are faster. Given shorter product
lifecycles, multi-channel distribution and the focus on energy use and
emissions, a reverse logistics program that streamlines the retrieval,
transport, inspection, sorting, disposal and recovery and recycling of customer
returns can help manufacturers recoup revenue streams.
ryder
chart2
4.
What core functions does reverse logistics involve?
The
end-of-life process typically involves four areas of focus:
Waste
management: disposition, disposal and related compliance activities
Liquidation:
marketing and sale of products to the secondary market
Service
parts logistics: field stocking locations, parts management
Repair
& refurbishment: diagnosis, repair, cosmetic and component repair, parts
sourcing, planning and harvesting
5. What are the keys to optimizing reverse
logistics?
Visibility:
using integrated technology to create visibility across the supply chain.
Velocity:
co-locating forward, reverse, & repair functions to trim transportation,
infrastructure and overhead costs and increase disposition and speed to shelf.
Value
recovery: accurately determining the appropriate disposition of assets to
recover the most value. Depending on the condition of the asset, options
include resale, return to vendor, refurbish/repair, recycle or donation.
Think
you could benefit by integrating sustainable returns/end-of-life processes into
your product lifecycle management strategy? Don’t have the resources to tackle
the project in-house? Consider partnering with a qualified reverse logistics
expert to help you recover more value from returns and reduce environmental
impact.
To
learn more about how you can benefit from an effective reverse logistics
operation, download our Reverse Logistics White Paper now.
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See more at:
http://blog.ryder.com/2013/11/product-lifecycle-management/#sthash.XUi7Hn3E.dpuf