Reverse Logistics: The way into the future Gailen Vick Executive Director May 29, 2013

Reverse Logistics: The way into the future To support third party service providers To educate OEMs & Retailers on why they need to outsource their RL To enable Private Industry, Consultants, Academics & Government Leaders to connect and share new ideas and opportunities The Reverse Logistics Association was formed:

Reverse Logistics: The way into the future To educate all industries about the Reverse Logistics processes which are common to all. To produce events around the world where OEMs, ODMs, Branded and Retail companies receive information on RL support services. What Is The RLA’s Mission?

Reverse Logistics: The way into the future Where Does Reverse Logistics Fit? Sustainability

Reverse Logistics: The way into the future How Do We Spread The Word? - RLmagazine.com 51 Editions WW Circulation of 90,000+ Published Monthly Weekly News Clippings DIGITAL – on all e - readers kindle

Reverse Logistics: The way into the future The RL Dilemma di·lem·ma: a difficult or persistent problem Source: Merriam-Webster dictionary

Reverse Logistics: The way into the future Reverse Logistics Dilemma Every Company Has An RL Dilemma Obvious- Consumer Electronics, Computers, Automotive Not so obvious- Books, Apparel, Retail, Grocery, Software Practically invisible- Pharmaceuticals, Aerospace, Agriculture, Medical, Energy

Reverse Logistics: The way into the future Companies don’t know they have a Dilemma! Senior Management Frequently Unaware Of: - Size of RL operations - Cost of RL operations - Impact of RL operations on bottom line - Impact of RL operation on customer service -Impact of legislation on RL -Many line/staff managers don’t know RL Operations even exist SEE THIS MISS THIS

Reverse Logistics: The way into the future How to Make a Difference Ownership within Enterprise Who Owns the RL Function? Distributed across functions “Hidden” in operations or customer service Measurement Tools to measure the performance of RL? Few, specialized software tools Financially absorbed in other departmental budgets

Reverse Logistics: The way into the future The RL Impact Finance What are the true costs / benefits to the organization? I.E. Actual costs vs. retained asset value Operations How is RL affecting operational efficiency? I.E. Quality improvements based on RL Sales & Marketing What is the effect of RL on sales? I.E. Customer satisfaction, brand reputation, remanufactured goods impacting prices RL affects the bottom line

Reverse Logistics: The way into the future Source: RLA Amsterdam Conference 2010, Keynote Address Rehman Mohammed, Cisco

Reverse Logistics: The way into the future Sources: RLA Amsterdam Conference 2010, Keynote Address Rehman Mohammed, Cisco & Investor.cisco.com – FY 2009 (2.4% of FY’09 Net Saving ) FY’09 Net Income – $ 6.1 Billion GAAP

Reverse Logistics: The way into the future What is the Impact to Mother Earth? Environmental Are we a good corporate citizen? Are we alienating clients? Governmental / Legislative Are we meeting governmental requirements? Are we open to legal action? E.g. RoHs, WEEE, SB 50 Bottom Line Cost 3% to 15% in every company It all affects the bottom line

Reverse Logistics: The way into the future After tax Profits; Are They Right? % Returns Take Away From Bottom Line Profits Product Production Cost Reverse Logistics IT Management Results If You Manufacture 1 Million Units/Year Revenue per Unit is $1 - $1,000,000 total Profit per unit is 5% After Tax - $50,000 total Average Return Rate is 10% - 100,000 total units Returns represent $100,000 in lost revenue – After returns your P&L shows a $50,000 LOSS! Reverse Logistics recovers 80% of the returns - $80,000 to the company’s after tax profit After Tax Profit with RL recovery - $30,000 So who is most important, the VP of Sales that took $50K from your company, or the Reverse Logistics professional that gave you a Bottom Line - $30K After Tax Profit?

Reverse Logistics: The way into the future Solution The Chief Reverse Logistics Officer (CRLO) would: Have authority to make changes on RL globally, but day-to-day responsibility stays in the hands of each Department Monitor the P & L to develop a Virtual profit center Acquire the necessary tools to support the finance department and report effectively to the Executive Staff Resolve The Dilemma Create A “C” Level Position For RL Management

Reverse Logistics: The way into the future Please hold your Questions