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Reverse Logistics
Trends & Practices
Dr. Dale Rogers
Center for Logistics Management
University of Nevada

CLM Reverse Logistics Conference
Sao Paolo, Brazil
3/24/2004

23 March 2004

1

Reverse Logistics Executive
Council
Mission

The Reverse Logistics Executive
Council is a not for pofit
--r
professional organization whose
purpose is to:
develop best practice industrystandards that take costs out of the
system for consumers, retailers and
manufacturers;
provide on-going benchmarking;
return causal information in order to
improve the entire Reverse Logistics
process.

www.rlec.org
3/24/2004

2

SUPPLY CHAIN MANAGEMENT
Integrating and Managing Processes Across the Supply Chain
Information Flow
Tier 2
Supplier

Manufacturer

Tier 1
SupplierLogistics
Purchasing
Production

Customer
Marketing

PRODUCT FLOW

Consumer/
End-user

Finance

Supply Chain Management Processes

R&D

CUSTOMER RELATIONSHIP MANAGEMENT
CUSTOMER SERVICE MANAGEMENT
DEMAND MANAGEMENT
ORDER FULFILLMENT
MANUFACTURING FLOW MANAGEMENT
SUPPLIER RELATIONSHIP MANAGEMENT
PRODUCT DEVELOPMENT AND COMMERCIALIZATION
RETURNS MANAGEMENT

Source:Adapted from Douglas M. Lambert, Martha C. Cooper, Janus D Pagh, “Supply Chain Management: Implementing Issues and Research
3/24/2004
Opportunities”, The International Journal of Logistics Management,”, Vol. 9, No. 2 (1998), p. 2.

3

•Fixing a product
for resale or reuse
•Make product
reusable
•Conserve
resources

AR
Asset Recovery
•classification and
disposition of returned
goods,surplus,
obsolete, scrap, waste
and excess material
•maximizes returns on
value
•minimizing costs and
liabilities
•recover economic value
•Minimize
waste quantities

$

CRC
Central Return Centers
•processing facilities devoted to
handling returns quickly and
efficiently imposes procedures
and good processes on a firm’s
reverse logistics operations.
•Reduces disposition cycletimes

Zero
Returns
•Do not accept
returns

•Gives customer an
allowable return rate
•Guidelines for
proper disposition

•primary determinants in

•Drives decision-making
•Develop & apply credit
rules
•Clear accounting
procedures & policies

Compacting
Disposition Cycle
Time

•Passes returns
responsibility onto
customer firm

Financial Management

the structure•Buying agreements for each item
•Store level gatekeeping & disposition
Processing rules
Fast credit reconciliation
Refurbishment/Remanufacturing (almost
MRP)
•Product/Supplier database with decision
rules
•Disposition options
•Transportation planning
•WMS elements

•key part of the reverse logistics
process
•the pricing for returned product
resale is managed
•Value of return materialnegotiated with pricing
guidelines

3/24/2004
•Understand value of material

•dispose of its
returned goods as
quickly as possible
•Clearly state decision
rules
•Take responsibility
•Make timely
decisions
•Reduce time required
to disposition product

•make decisions
to limit the
number of items
that are allowed
into the reverse
flow
•control and
reduce the rate of
returns•movement of operational and
physical management of returns
and reverse logistics outside of
the firm
•reduce administrative hassle

Gatekeeping

Remanufacture &
Refurbishment

Reverse
Logistics
Information
Systems

Avoidance

•finding ways to
minimize the number
of return by
• building in high
quality
•user friendliness
•Helping the customer
know how to use the
product•changing promotional
programs
•Clearly stating return
policies and
procedures

4

3/24/2004

5

DVD Reverse Logistics Flow
RETAILER

4

MANUFACTURER

10

1
10

BROKER

4
8

5

11
10

11
11

13

9

11

11
9
11

eBay

Consumer
Manufacturer
CRC

10

11
10

Charity

6

Retail CRC
6
6

12

Global Market

6

12
9

10...
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