In this guide to reverse logistics, well discuss the steps and terminology to be aware of in this process. In this article we consider a practical application of reverse logistics. However, in reverse logistics, companies create a new supply chain network that works backwards, and allows consumers to reach. The company uses returnable containers to transport purchased. The paper explains the basic theory of the system modelling and next it utilizes the reverse logistics model. One factor often overlooked in successful reverse logistics is packaging during the asset collection process. For example, if a product is found defective, it is sent back to the manufacturer for testing, repairing, dismantling, recycling, or proper disposal of the product. In this research project, many examples of large bottomline impact were identified. A returnable container is a type of secondary packaging that can be used several times in the same form, in contrast with traditional cardboard boxes. Rfid for returnable transport items, rfid monthly, november 2009 totes for organizations distributing a fairly fixed product line like a dairy or a postal operation, for example one or two types and sizes may meet all foreseeable needs. Challenges, benefits and financial impact 2 white paper whether your company is using totes, pallets, bins or some other form of returnable container, the inability to track these returnable containers can wreak havoc on your supply chain.
Reverse logistics programs are typically complicated by a number of factors. These have made most sense when a reverse logistics system is available or can be readily developed. Reverse logistics is relate to the return flows of manufactured goods, materials or equipment back from the purchasers to the logistics network. In the late nineties, several other studies on reverse logistics appeared. Benefits of rfidbased tracking of returnable transport items such as pallets, kegs and boxes are documented in several case studies, but have so far hardly been analyzed from a theoretical perspective.
Considers the application of returnable containers as an example of reverse logistics. Reverse logistics, nonreturnable packages, recycling, routing. Gain a detailed analysis of your current model and identify effective solutions to manage your returnable containers. It would be tempting to think of reverse logistics as forward logistics done backwards. Mention reverse logistics and many might initially think of returning unwanted or damaged merchandise back up the supply chain. Recovering lost profits by improving reverse logistics 5 impacting the bottom line many executives compare the amount of money spent processing returns to other supply chain activities and conclude that investing resources elsewhere would yield greater results.
The paper analyses the theory and practice about the construction waste recycling in a meticulous and deep going way based on reverse logistics combining with present social development circulation economy current situation,then brings forward the operation pattern about the construction waste recycling based on reverse logistics,on the basis of household electrical appliances and electronic. Remanufacturing and refurbishing activities also may be included in the definition of reverse logistics. Reviewing distribution issues in reverse logistics springerlink. The correct implementation of this process enables management not only to manage the reverse product flow efficiently, but to identify opportunities to reduce unwanted returns and to control reusable assets such as containers. For example, manufactured goods could go from the client to the distributor or to the manufacturer.
During the same year, the first commercial study of reverse logistics was made by dr. Reverse logistics an overview sciencedirect topics. Robinson reverse logisticsand maximize your returnable shipping materials investment. Figure 2 illustrates the circulation of returnable containers. These goods, materials, andor equipment could be remanufactured, reused, recovered, or recycled. Reverse logistics is a new notion in the history of logistics and supply chain management. The us army first paid its attention to reverse logistics operations in 1998. Optimization design of construction waste reverse logistics. Reducing reusable packaging loss with reverse logistics. Growing green concerns and advancement of green supply chain management. Stock 1998 reports in detail how to set up and how to carry out reverse logistics programs.
Getting started in reverse logistics inbound logistics. With respect to types of industrial packaging, it can be returnable multiway packaging or disposable oneway packaging and is a relevant problem in reverse logistics because its value decreases during the consumption of the product, for example, pet or glass bottles. A profitable visit algorithm mario monsreal1,2,3 1 autoid lab, zaragoza logistics center, zaragoza, spain. Reverse logistics is a strategy in supply chain management in which a company collects and reuses some part of their distributed good. If not managed properly, the use of returnable containers can significantly raise logistics costs rosenau, w. An examination of reverse logistics factors impacting the.
Benefits of an efficient reverse logistics process arcbest. Reverse logistics consists of all activities which. Therefore, they just focus on trying to reduce the cost of returns processing. Returnable container definition of returnable container by. Finally, an illustrative example shows how sd modeling can be used to. Examples of reverse logistics processes are the collection of bottles of bottles, the return of goods and the restoration and or recycling of materials. The reverse logistics process is illustrated in figure 1. In this paper, we describe how the returns management process can be implemented within a firm and across the supply chain. Reverse logistics systems of empty packings of agricultural. Kostecki 1998 discusses the marketing aspects of reuse and extended product life. Despite the importance of reverse logistics in handling growing amount of food product returns reverse operations during the product life cycle have received little attention. Why reverse logistics needs to become a core competency.
Reverse logistics is therefore worth doing, and worth doing properly. Managing returnable containers logistics a case study. Reverse logistics deals with the processes associated with the flows of products, components and materials from usersowners to reusers. Reusable containers within reverse logistic context archive ouverte. A suggestive reverse supply chain model for sls pdpu. A returnable container is a type of secondary packaging that can be used several times in the same form, in. Reverse logistics is the process of handling return of products from a consumer or a retailer to a manufacturer through the use of the supply chain. Twede 2003 captures, in part, the challenge of managing returnable containers.
A quality program offers maximum visibility over reusable containers, regardless of their. Jul 10, 2009 inventory shrinkage is a common problem in the management of returnable containers. Whether your customers are shipping goods back to a company for return, repair or for endoflife disposition, packaging plays an important role in reducing the risks of damage and theft. This includes business processes that involve transport from distribution endpoints such as retail locations back in the supply chain to locations such as warehouses and factories.
This article gives general information about reverse logistics and provides an overview of the related literature. The use of reverse logistics for waste management in a. The impact of rfid on management of returnable containers. In addition, returnable transport packaging is a reverse logistics system which helps in refining the supply chain. Returnable container definition is a heavyduty drum or shipping case or box that can be used for several trips. For many years, several types of shipping containers have been returnable and reusable. Reverse food logistics during the product life cycle. Society, government and industry are increasingly confronted with the results of our throwaway society. Again the inventory balance between the different locations is a. Accounting treatment of containers accountingmanagement. Since the separate charge made to customers for the containers is higher than the cost of the containers, the container stock account will therefore, shows the profit or loss on the containers for the period.
Schematic representation of the direct and reverse logistics processes. Reverse logistics, returnable containers, interpretive structural modeling, distillery industry returnable container collection process in reverse supply chain operations. Reverse logistics also encompasses recycling of packaging and containers, reconditioning or refurbishing of products and disposition of obsolete goods. Reverse logistics of recovery and recycling of non. Onetime or limiteduse transport packaging and reusable transport packaging share similar cost components. The way forward part i of ii although reverse logistics is often overlooked, retailers that master this discipline can gain competitive differentiation and turn the.
Reverse logistics of recovery and recycling of non returnable. This means there are 170 onhand containers available, which is enough to meet the demand of 150 packages. This study examines reverse logistics practices across the different stages of food product life cycle. The action steps below can help you develop and implement an integrated approach to reverse logistics that will lead to increased customer satisfaction, fewer returns, lower costs, and greater return on your assets. The council of logistics management has defined reverse logistics as referring to the role of logistics in product returns, source reduction, recycling, materials substitution, reuse of materials, waste. When no separate charge is made the containers like tube of tooth paste, wrapper of chocolate, lubricants are not returnable in.
Reverse logistics can also have a dramatic effect on steering a companys fortunes. This is exacerbated by the multiple entities customer, manufacturer, reseller and disposer that need to partner to develop a smooth reverse logistics. Reverse logistics is any process that involves moving things from the customer back to the producer. A returnable container is a type of secondary packaging that. A a deterministic inventory model for repairable items, naval research logistics quarterly, 14, 3998, 1967. In short, reverse logistics needs to become a core competency. Paperwork and poor workflow processes tend to plague reverse logistics operations. Managing reverse logistics to improve supply chain efficiency. Returning pallets or other packaging to the manufacturer so they can be reused four benefits of reverse logistics. The following are common types of reverse logistics.
Companies which excel at inbound and outbound logistical arrangements. Returnable packaging in the automotive supply chain. Industries considering building an economically viable reusable packaging system need to think about required size of the packaging material pool, the design of systems for cleaning, inspecting, and maintaining containers, and the cost, speed, and ease of use of reverse logistics processes. Inventory shrinkage is a common problem in the management of returnable containers. A cost comparison model for reusable transport packaging. The use of reverse logistics for waste management in a brazilian grocery retailer. The company ships from its 37 distribution centers to its 10,000 pharmacies, located in 40 states d. Reverse logistics may involve varying levels of planning, implementation, and control of goods as they are shipped back to the fulfillment center and navigate the supply chain to the appropriate application. On day 10, the number of remaining returnable containers from the previous day is 30, and the other 140 containers are returned from the assembler on the day. In our experience with numerous retailers, reverse logistics remains an overlooked area. Because reverse logistics involves the same steps and processes as traditional forward logistics customer service, transportation, inventory management, etc. It is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. Reverse logistics of recovery and recycling of non returnable beverage containers in the brewery industry.
Reverse logistics of recovery and recycling of nonreturnable beverage containers in the brewery industry. Roadway reverse logistics, another 3pl, handles hyundai cores reusable parts for the remanufacture of transmissions from hyundai dealers. Aug 21, 2017 a definition of reverse logistics with examples. The study also tries to look at the environmental aspects of reverse logistics. How the cost comparison model works typically, the flow of products and goods passes from manufacturers to wholesalers and retailers, and from wholesalers and. Sep 25, 2015 returnable containers exchange, which i will use as an example, is a very common scenario in the beverage business. Your program offers maximum visibility over reusable containers, regardless of their location in the supply chainat the shipper, in transit, or postdelivery. Returnable container collection process in reverse supply. In some companies it is realized by complex developments, in others it is left out as a purely manual process. This article discusses a study on reverse logistics in which a returnable packaging model was developed in order to minimize waste generation and increase the competitiveness of the company studied by reducing costs and resource consumption and minimizing environmental impacts. Ernst 2000, reverse logistics involves the return flow, considering either defective parts packages or products returned consumed that should go to a recycling. Managing a fleet of returnable containers is harder than it looks. There is a lot of money being made and saved by bright.
Use online analytics capabilities to create a customized reverse logistics solution from c. Reverse logistics is for all operations related to the reuse of products and materials. Managing reverse logistics to improve supply chain efficiency and reduce cost reverse logistics can represent a significant chunk of supply chain cost, and its typically not very well managed, its time to manage reverse as an integral part of supply chain management. Optimizing and benchmarking returnable container processes within an automotive distribution system. In 1987, for example, the bergen brunswig drug company in california purchased 120,000 returnable plastic containers to replace oneuse corrugated cartons. A return, reconditioning, and reuse system can save money on the cost per shipment and can reduce the environmental footprint of the packaging. More specifically, it describes and analyzes rlss packaging of pesticides, identifying the. There is just too much at stake in terms of brand protection, sustainability requirements, and ultimately profitability. Kroon and vrijens 1995 discus s the d esign of a network for reusable containers. As a result of this interest, a large body of reverse logistics related study has been built. A case study of an indian distillery company venkatesh, v g 1, lavesh punjabi, vikash gupta, sandeep patil, rakesh kadam.
Our reverse logistics centers in major metropolitan areas allow you to dispose of returnable containers closer to stores, enabling the use of transportation assets for paying backhauls. In the next section we present a number of methods that may be used to create a return logistic system for returnable containers. Optimizing and benchmarking returnable container processes. Reducing reverse logistics costs with reusable transport. Manage the returnable container process penske logistics. In an example involving reusable containers, shawns company was approached by a business in the food industry. To effectively reduce waste and cut costs, reusable containers are a musthave. Our quick handling and return of reusables allow smaller pool size and ultimately lower overall supply chain costs. For this equipment to be used, a system for the return logistics of the containers should be available. However, a growing trend in reusable transport packaging has created an opportunity to add value through reverse logistics of returnable and reusable. Companies and their supply chain managers can no longer afford to treat reverse logistics as an afterthought. It was using a loop of returnable crates to transport product from packers to supermarkets, back to a distribution center to be washed and. Clearchain through penske logistics can help you streamline the returnable container process and help your business achieve the maximum benefit. Rfidbased container tracking systems have been proposed as a possible solution.
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