Part - I

Introduction

For years, returned merchandise was generally viewed as a headache for both the seller and the buyer. But innovative thinking combined with a desire to find a profitable opportunity has put a lot more focus recently on reverse logistics.

Reverse Logistics is 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.

As far as managing the returns are concerned companies re-use them, re-sell them, leave them to a third party or destroy them. But companies are more likely to benefit if they can also make use of the information that comes back with returned merchandise.

Importance of Reverse Logistics

Reverse logistics is important for: -

1. Assets utilization (rather we can say re-utilization)

2. Assets recovery (to capture the value, which otherwise will be lost)

3. Profit maximization: Cost reduction through recycling

4. To fulfill the Environmental obligations, e.g., Waste recycling, Hazardous waste management, e.g., Car batteries disposal

5. Customer Relations Management, e.g., after sales service, buy back guarantee

Application Areas

The list of industries where reverse logistic plays an important role: -

1. Publication houses (40-50% by volume): To take back the unsold volumes for reuse

2. Beverage industries: To collect reuse the empty bottles, e.g., Coca cola & Pepsi

3. Heavy industries: To collect and reuse the waste

4. Consumer goods industry: To fulfill the commitments of after sale service and buy back guarantee

5. Pharmaceutical industries: To collect the expired formulations and drugs for environment friendly disposal

6. Automobile industries: To fulfill the commitments of after sale service and buy back guarantee

Next

* Contributed by -
Rakesh Verma & Vinayak Vhatkar,
PGDIE Class of 2005,
NITIE, Mumbai.