Supply Chain Management (SCM) Green and Reverse Logistics What is Reverse Logistics? What is Green Logistics? Why are they important? Elements of Green Logistics Reverse Logistic Systems Compiled by: Alex J. Ruiz-Torres, Ph.D. From information developed by many.
What is Reverse Logistics? The design and management of the flow of raw materials, components, and final products from the customer back to the source. From consumer back to the store or warehouse. From warehouse back to the manufacturing plant. From manufacturing back to the supplier. https://www.thebalance.com/tips-for-handling-store-returns-2948453
What is Green Logistics? Performing logistic activities with a focus on minimizing their ecological impact. This for both forward and reverse logistics Forward logistics = towards the customer Reverse logistics = from the customer GL aims to make sustainable operations by: Using fuel efficient vehicles and facilities. Minimizing waste of transportation or packaging. Using recycled materials/ 0 waste facilities. Key measure: CO2 impact
Why are they important? Sustainability and protecting the environment are critical to everyone! Profitability may depend on effective reverse logistics: U.S. companies spent more than $100bn annually processing returns. Many web based retailers no question returns policy. If not properly done these items get lost, damaged, … a significant cost Recapture value and recover assets: Profit derived from materials that were previously discarded.
Why are they important? Image and customer requirements: Green and RL can differentiate a product/ company. Some market segments interested in buying green. These markets will pay premium prices for products that have reused/recycled components and are made in green facilities and transported in green trucks. Legal Issues: Some countries require disposal at end of life by the producer.
Green Logistics Fundamental Elements Low energy consuming facilities and equipment (warehouses, trucks) + using alternative sources of energy (solar,…). Move to modes with high fuel efficiency (rail and ocean). Driving to maximize fuel efficiency. Collaborate with supply chain partners to maximize efficiency of resources. Consolidate shipments. Minimize empty hauling (movement of vehicles with no cargo). http://www.dbschenker.gr/log-gr-en/sustainability/Green_Logistics/Overview.html http://blog.damco.com/2017/03/15/eco-logistics-hub-to-improve-operational-efficiencies-in-north-vietnam/
Reverse Logistics Reverse flows occur because items: Stopped working and are under warranty, thus being retuned as to be replaced or repaired. Customer did not like it. Failed inspection at the manufacturing plant. Was the wrong part (sent blue and it should have been pink). Is being recycled (broken down computer dropped off at Best Buys). … http://www.goodgirlgonegreen.com/how-to-recycle-cds-bottle-caps-and-cfl-light-bulbs/
Reverse Logistics The RL logistic system characteristics depends on multiple factors such as: Are these new or used items? If new, how to effectively move them back to the regular forward flow. If used, there are many questions, for example:, Is this a warranty repair? Can the item be repaired and resold as remanufactured? Can the components be re-used, can we disassemble it easily? Can the components be recycled?
RL Systems Types of recovery Product recovery: Products may be re-used in the original market or in secondary markets. Component recovery: Products are dismantled and their modules or parts can either be used in manufacturing the same product or of different products. Material recovery: Recycling of components, for example plastics or metal parts.
RL Systems There are four main steps in RL systems Collection: Bringing the products from the customer to the point of recovery. Inspection: The quality of products is assessed and a decision is made on the type of re-processing. Processing: processes to either return item to a usable condition or extract value. Redistribution: Bringing the recovered goods to new users. Collection Inspection Processing Re-distribution