Reverse logistics 17th European Forum of Logistics Education Faculty of Transport and Traffic Sciences University of Zagreb Zagreb 2010.

Reverse logistics - introduction Focus on reverse flow of goods and materials As a result of enviromental awareness and new buisness possibilities A process of moving goods from tipical final destination for the purpose of capturing value or proper disposal

Defined by The Council of Logistics Management as: The process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal.

Implementation reason Initiators of reverse logistics

Implementation reason

Companies which pay attention on reverse logistics problem have direct and indirect benefits DIRECT: - less raw materials needed - recapturing value of used goods - decreasing costs of proper disposal INDIRECT: - predict regulations - market protection - enviromental awareness image - better relation between retailer and customer

Return of goods can be from: Manufacturer Return while it is in process of manufacturing Distributor While the product is being distributed Customer Product is purchased and returned from different reasons

Most common reasons for return

The flow of returned products

Product recovery options

Reverse logistics - barriers Despite reverse logistics development, there are barriers that disable growth The main barriers are: - Lack of interest - Company policies - Lack of systems - Competitive issues - Management inattention - Financial resources - Personnel resources - Legal issues =

BarrierPercentage Activities exist, not interested for development 47 % Company policies25 % Lack of systems2 % Competitive issues2 % Financial resources19 % Personnel resources1 % Barrier Percentage Importance of reverse logistics relative to other issues 39.2% Company policies35.0% Lack of systems34.3% Competitive issues33.7% Management inattention26.8% Financial resources19.0% Personnel resources19.0% Legal issues14.1% Table 1. Barriers for implementation of reverse logistics system in USA Source: Dale S. Rogers, Ronald S. Tibben – Lembke: Going Backwards: Reverse Logistics Trends and Practices, Table 2. Barriers for implementation of reverse logistics system in Croatia Source: Ivaković Č., Rožić T., Bajor I.: The Concept of Disposition of Returned Goods in Reverse Logistics Channels,2010. Research implicated:

Ecological awareness and reverse logistics In Croatia, as in many other countries, environmental conscience is starting to be a part of consumer criteria when purchasing Consumers are trying to make an impact to be sure that environment will be safe and healthy This may be small steps of everyday consumer, but they could make a difference if in a future purchasing will be made with ecological thinking

Research implicated: Results of the questionnaire conducted on one hundred random examines implied that even 35 % of examinees would rather buy ecologically acceptable product than the cheaper one recycling programs exist but are not introduced to the everyday consumers consumers are interested in participation and they are in some degree concerned in environmental problems

Well informed consumer could be an active part of a reverse logistics chain Creation of more detailed recycling programs, need for new laws and rules that will oblige and motivate consumers to participate in reverse logistics chain will make a difference in consumers consideration

Reuse a transport packaging -Using the same transport packaging can save money -Expenses for sending it to landfills are reduced -Ecologically right -If not wanted can be returned to the manufacturer or recycled -Buy one that fits exactly your needs

Return a pallet - Organizing return of pallets can mean saving money for your company… …trowing them away can take cash from it

Return a plastic bottle Specific for Croatia Strategy to get people recycle For a returned plastic bottle 0,50lp - One of the complimentary actions for reducing amount of packaging that are needlessly sent to landfills

Return a tire -All kinds of old tires are collected -When recycled can be a variety of new products

Reverse logistics in Croatia C.I.O.S. group Main activity of the C.I.O.S. group is recycling and remanufacturing of metal and manufacturing secondary raw materials like steel etc. Managing t / year of bulk waste ( 70 t per hour, about t of product which is raw material World Enviroment Day – action “500 kn for a car wrack” – goal is clean Croatia and reclaiming materials

Return a car -Green action in Croatia -Almost car wracks were thorn out of the nature where they never belonged of them were in national parks

Reverse logistics and future Use of information technologies in reverse logistics systems Need for tracking products through lifecycle Production philosophy oriented to recycling and disassembling of products Used of technologies for getting higher level of raw materials from product Need for standardisation in process of return (collecting) Need for education of personnel

Conclusion Tendency and need to reduce costs require new approach Logistics management last decade exclusively focused on flow of materials directly in function of creating a new value Implementation of sustainable development obligate manufacturer to be responsible for once used materials Quantitive reduction and reusage of waste is not enough, system must be projected and realised from logistic aspect with convenient redistributive strategy

Thank you for attention!!!