Reverse Logistics Principles - Assignment Example

Reverse logistics Introduction Good relations between s and the sales department have developed to unprecedented levelsin the recent past. In order to prosper in business, any promising business enterprise needs to construct a reverse logistics system to help address the issues that accompany goods after a sale deal has been sealed. All those operations that relate to the re-use of substances are referred to as reverse logistics. It is a process that involves drawing of a plan, making it operational, and provision for controls in efficiency. The flow of materials should also be cost effective in the process of inventory, information relating to finished goods as from the consumption point to the end point holds much in the logistic map. In simple words, reverse logistics is all about moving products from their end point of use in an attempt to try and give them another usable form. According to the Reverse logistics association (2009), reverse logistics encompass all those activities that appertain to products or services after their sale point, the main aim being to maximize on the product in question so as to address other concerns that relate to environmental and money aspects. On the basis of Smith (2009), reverse logistics is simply the handling of returns of a product. To smith, logistics reversal happens when customers return the products they had purchased for a variety of reasons. Smith has identified five components of reverse logistics: restocking, repackaging, repairing or reconditioning, returning to the vendor, and retaining of scrap. On restocking, the un-opened items are taken straight back to the existing inventory. If the goods had been re-opened, they are repackaged and put back to the selling shelves (Moschis 2005). If the products are found to be faulty, they are reconditioned to meet the minimum level as per requirements and either given back to the customer or put back to the inventory if the customer is unwilling to re-take it. If the faults on a product cannot be corrected, then it is imperative that they be taken back to the original vendor. In the event that a product’s recovery value is zero, then that is taken as scrap. According to Gardner (2005), there are four reasons that necessitate a reverse logistics strategy. They include: product recalls, adjustment of stocks, functional returns, and business by business commercial returns. For one to be able to run a successful business as a result, it is advisable to develop a reverse logistics system that adequately addresses customer and business concerns. Reverse logistics are difficult to handle especially in terms of costs and inconveniences that negatively impact on sales at least at its onset. They can however provide very useful business data that can be used to drive the business ahead (Moschis 2007). The best possible way to address a reverse logistic strategy need is to forge a close working relationship with the existing processes in the business. An efficient tracing, quality management mechanism should be sought to help identify problems easily (Business case Océ 1999). Once there is a close working formula with other retailers dealing in the same line of business, any queries can be easily shared and solved to enhance business growth. This mechanism should be correct and quick, while at the same time addressing the concerns of customers by giving a clear outline of characteristics of the given products and offer information about the range of options to be observed when products are returned (Ram 2005). The correctness in addressing customer needs would enhance good customer relations which in turn translate into improved sales. From improved sales, a business has in its possession larger revenues which can be used to improve the business. While designing a reverse strategy, several factors are supposed to be accounted for. But that aside, the advantages for establishing such a strategy cannot be wished away. Mobile company manufacturers do a booming business (Milne et al 1998). But their businesses are located in the mother countries. They only have centers in the countries in which their businesses operate. With few exceptions, most of the centers are never in a position to address customer concerns accordingly. To cite an example, Chinese cellular phone producers do not have any centers in Africa and yet the companies enjoy large sales. To address customer issues regarding quality of products, the companies ought to consider setting up bases in the African region. A regional centre should be empowered to collect all customer complaints and act accordingly. This proposed centre should have enough manpower and stock of products in the market (Kaynak 1993). The returned items should be examined and corrected. If the correction attempts do not work, the ideal thing is to provide for their exchange within a specified time. This is what anchors my call for the Chinese cellular phone providers to change tack and follow the other leading European companies that have a good spread of similar facilities across the entire continent. With a close location to customers, the phone repair issue could be tackled nicely. The repair service demand is increasing after each passing day. The nature of repairs should be defined to avoid all kinds of garbage being brought to the centre for repairing (Gunter 1998). The inconsistent that may arise from the repair of the products should be harnessed so as to be in synchrony with the company development objectives and at the same time address the needs of the customers. Customer specific needs should also be looked into appropriately (Rhodes 2009). This is because, it is the client base of the company that holds the future of the company, if satisfaction is achieved on the part of the customers, then there would be surety to the business that sales will improve. The period taken between the time of reception of defective equipment and its correction should be made as short as possible in order to cultivate customer satisfaction and loyalty (George 2002). To effectively serve customers, the human capital requirement value cannot be overstated. The repair work would call for well learned and experienced experts. It is the responsibility of the company to make available the necessary provisions to attract the top notch group of experts to address this repair issue. In so doing, the company will be able to cut a dominant figure in the phone market and as a result enjoy raised sales that would alter positively its financial standing (Chisnall 1995). Given that it already enjoys a huge market segment, such a venture may take the Chinese companies to greater heights in the business, even to a point of cutting the rest of the phone suppliers from the market. The idea to locate product centers in Africa presents a major challenge to the phone manufacturers because of the financial aspect involved. The companies should focus on the attendant benefits that would arise from such a system (Baker 2001). For one, it would promote sales though after some time. It is the onus of the companies to set aside the required funds, do a feasibility study and try to implement the scheme. The collaboration element of the strategy offers an opportunity for addressing the problem of returned goods. For reverse logistics to be effectively achieved there is need for a close collaboration between the seller of a good and the recipient (Card 2008). This way the problem is understood from the two perspectives, that is the customer’s and the seller’s. Collaboration also demands that the provider of a service gives adequate information regarding product use and other important specifications (Supply chain brain 2008). Other businesses that deal in the same product should also be contacted in an attempt to seek further knowledge on the goods dealt with. If this strategy can help the business to achieve its goals, then that would have been a successful case. It should be noted however that a good business strategy depends on its design and implementation (Greco et al 1997). Reverse logistics needs a great vision in order to be successful. Such vision if shared between the supplier and the recipient, it stands to reduce confusion that may arise due to broken links in the supply chain. Strong communication ties need also to be observed if this is to be a success (Edward 2000). Reverse logistics constitute: returns management, reverse logistics management, and product repairs (Brightstar 2009). Further to this, it is believed that benefits like: better customer experience, reduced costs, and better financial handling of returns can be attained. Reverse logistics as illustrated from above is more than a mere requirement in any business that aspires to achieve positive results in business. It is rather quite an integral part of any business unit that is involved in the supply chain (Small and Home Business marketing strategies 2009). The reverse strategy measures should be water tight in order to avoid financial losses. While this strategy is being done the overriding idea would be to minimize costs while at the same time trying to maximize profits. In so doing, the targets of the strategy should also be kept in mind. This is because it would defeat the purpose in pursuing to minimize costs if the main agenda cannot be accomplished. Efficiency is also another crucial aspect of implementation of such a programme. In the way towards achievement of goals, the resources to be used must be applied sparingly because in the end what the business wants is high returns (Mentzer & Conrad 1991). Conclusion Reverse logistics has over the years been considered as a waste of time and financial resources by a good number of companies. But following the current events that have revolutionized the marketing sector, all major businesses have found the need to consider designing and implementing the reverse logistics strategies in order to gain a competitive edge in business. However, the development and making such systems operational need to be carefully studied before they are rolled out (Growing business online 2005). This is because the logistics system should be tailor made to meet the various institutional demands of the company in question. All in all, the obstacles that exist in establishing a reverse logistics mechanism should not outweigh its attendant gains. As a result I propose that businesses should establish reverse logistics mechanisms in order to elevate their commercial standings. References Baker, M 2001, Marketing: critical perspectives on business and management, Volume 3 Routledge press, Canada. Brightstar, 2009, Intergrated supply chain solutions, Brightstar Corp, Brightstar Corp, viewed 24 November 2009, Business case Océ, 1999, Reverse logistic network re-design for copiers, Springer, Berlin / Heidelberg. Card, J 2008, Growing business online, Crimson business publication, viewed 24 November 2009, Chisnall, P 1995, Strategic business marketing. Edward, L 2000, Direct marketing: strategy, planning, execution, Mc Graw hill, Australia, viewed 24 November 2009, http://books.google.co.ke/books?id=c8WAVq352o8C&printsec=front Gardner, R 2005, Manufacturing & logistics IT critical issues– a forgotten necessity? viewed 24 November 2009, Amazon.com, UK. 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