The Scope of Reverse Logistics - Case Study Example

Introduction: Reverse logistics is the upcoming trend in the current scenario. Reverse logistics represents the entire operations linked to the reprocess of products. It is the procedure of planning, implementation, and monitoring of cost effective stream of resources and effectively using them, as well as zero wastage of the resources. In particular, reverse logistics is the practice of transferring raw materials from the classic concluding end with the intention of confining value, or for proper usage. Remanufacturing and recycling are the actions included in the explanation of reverse logistics. The scope of Reverse logistics: The main scope of the study is in identifying the various organizations and benefits reaped by these organizations in selecting the resources and in recovery of the resources by means of the recycling process. The main advantage of the study is the zero wastage achieved through effective economy through a well planned logistics cycle. The supply chain management in the organizations makes use of the product, services and customer relationship for the effectiveness in the mode of operation. The main scope of reverse logistics includes planning and designing of the logistics channel with the aim of service and recovery of the materials and the resources. The reverse logistics helps in creating a channel of logistics which helps in the flow of various standardized products and cost effective materials in nullifying the channel flow of resources. Information retrieving can be useful in establishing a strategy for reverse logistics. The uninterrupted channel flow can contribute to the profitability and increased revenue for the company. It also contributes for the incessant improvement of the firm “the flow of goods in the opposite direction to the traditional flow of the supply chain, from producer to consumer, back to a point of recovery or disposal. Reverse logistics is a branch of logistics which involves the collection, transportation and redistribution or disposal of returned, unwanted, damaged, or surplus goods. This may be through reuse, resale, repair, or refurbishment. The term also covers the management of products at the end of their life which contain a hazardous substance needing special treatment for environmental reasons. However, it differs from waste management in that the emphasis is on recapturing value through redistribution, cannibalization, or recycling, rather than safe disposal.” (Business definitions for: Reverse logistics, 2010). Reverse logistics: History and origin: The reverse logistics had its origin in the 20 the century, “Roger and Tibben-Lemke (1999) defined the reverse logistics concept as “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”. At that time, this definition did not take into consideration the package materials. De Brito (2003) completes the above definition and describes the reverse logistics as “the process of planning, implementing and controlling the backwards flows of raw materials, in-process inventory, packaging and finished goods from manufacturing, distribution or use point to a point of recovery or proper disposal.” (Raicu et al. 2009, p.38). Reverse logistics of utilized and unutilized products value the variety of products by default goods, idle goods for repair, obsolete resource, and resources which are not delivered in time. Methodology of reversed logistics: Reverse logistics consists of various factors and they are carried out through various methodologies like planning, data collection and analysis of the information followed by the implementation of a logistics channel. Planning: Planning of reverse logistics and utility of the study should be resumed with a secondary research which should be technologically advanced in providing the best practice in an organization in terms of the profitability, increased usage in economic resources and in combining the resources. Data collection: Data collection can be carried out by various research tools for the retrieval of information. The main source of data collection is through questionnaires which are the ones that contain close ended and open ended questions, the main aim of which is to collect the objective and the descriptive data on various studies concerned with the organization. The survey can be used in retrieving the information which is followed by a detailed enquiry of the usage of resources and the need for the same. Analysis: The analysis is where the quantitative and qualitative data are taken for analysis and the results of the survey are also analyzed and final conclusions are derived. Implementing: The implementations of the system include various uninterrupted process of improvement which forms the best process of the organization that contributes to the constant improvement in an organization. Objectives of reverse logistics: The main objectives of reverse logistics are identifying the important upcoming trends, developments and innovation of technological process and in discarding the obsolete technology. They also help in identifying various bottlenecks and challenges taken by the organizational authorities in SCM activities and in taxes payable. And also, to analyze the various ways by which the organizations make transition in efficient reverse chain and remain in observance and in monitoring with the regulations of the legislations. Implications of the reverse logistics: Reverse logistics are much useful and vital in an organization for its effective functioning and performance. The main uses of them are that it helps in measuring the economic cost and measuring performance of the same, minimization in the return of products, process management in operations, increased and strong networking operations, sustainability in distribution, advanced technology and reduced compliance with the legislation. Reverse logistics in industries: Industries should be able to monitor the process of reverse logistics smoothly. The efficient management of reverse logistics varies from industry to industry. For the efficient management of reverse logistics many actions need to be taken like informing the customers about the recycling process, to collect the products that need to be recycled, to process the products and finally the redeployment of the processed products. The appropriate use of reverse logistics results in the operation of a smooth supply chain. The difficulty in reverse logistics for companies is to find re-users for their products. Companies also face difficulties in finding a proper re-manufacturer. The main strategic problem faced by a company in the reverse logistics is the appropriate organization of the compilation set-up. The main areas which a company should focus are on the network structures and inventory. Reverse logistics can also be practiced in publication firms which can reuse the paper for its production purposes. The plastic industry can also use the reverse logistics to their advantage because plastic is today widely used in all the industries. Plastic is used in all daily goods so plastic recycling will be very beneficial not only for the environment but also for the industry that is using plastic as one of its raw material. Cool drink giants like Coca-cola and Pepsi are using reverse logistics for their plastic bottles and aluminium cans. Kodak cameras also provide a very good example of reverse logistics. In the Kodak cameras the main parts which can be reused are its synthetic plastic body, its route panel and its lens. The route panel or otherwise called the circuit board is the prime reusable item. The problems which the company faces are, the invention of new and advanced cameras that lead to the use of new advanced boards which may not be of the same size or capacity as the old ones supplied to the customers therefore, when the customer needs a recirculation it becomes practically impossible. The second problem is the lack of appropriate network between the photo finishing laboratories and the company. Information companies like Dell, IBM etc. have also used the reverse logistics for improving their supply chain management. These information system companies used reverse logistics as a method of identifying the outdated parts in their market. There needs to be a proper developed back up system in information companies for the development of reverse logistics. Green supply chains: Supply chain management means management and coordination of multifaceted network which are included in distributing finished products to the proper and ultimate customers. If we add green component to it, it is called Green supply chain management, which includes green procurement, green production, green delivering of product, and reverse logistics. There have been significant impacts of environmental and economic problem with reverse logistics. After which, there formed an idea for laying a foundation stone for green supply chain. Nowadays, in the global competition where all firms are trying to minimize their irrelevant resources and to build up an able platform to adopt sustained supply chain practices. A limited research is done regarding the topic of sustainable supply chain practices, which incorporate the factors that are included in reverse logistics, guide to more included supply chain, and ultimately to a better economic performance. As a result value may be predictable in formulating “(1) if any overlaps or intersections between the green supply chains and reverse logistics exist and (2) if so, if they can be integrated to provide a more comprehensive, sustainable system. This conceptual paper will explore the potential relationships between the green supply chains and the reverse logistics, specifically focusing on shared commonalities.” (Marsillac 2008). If government pass some environment laws and the managers become more accustomed at reverse logistics, it will help to stop harmful material is entering in the environment. And they should be more focused on eco-friendly products. Recycling: Recycling implies processing of used material for the production of new product. To prevent the wastage of used materials, we need to trim down the use of new materials, the usage of energy, and of course reduce air prolusion as well as water prolusion. We can reduce pollution by recycling the materials like glass, paper, metal things, plastic goods, and electronic equipment. Through recycling we can reduce the waste sent to landfills. Today recycling is emerging as a part of modern environment movement. Environmental Legislation:  The aim of the environment legislation is to improve the environment totally. To put together this aim is what some policies across the globe are striving for. The successful defence of the environment is needed for the activities on diversity of faces like preventing or to limiting global warming and safeguarding the people from the effect of deprived air quality and poisonous chemicals. And thereby to protect people natural calamities. And also to protect the environment make profit such as better power efficient buildings, social progress by way of taking action to combat fuel scarcity and to achieve economic growth through maximum utilisation or efficient utilisation of scarce resources. Product recalls: The meaning of product recall is the returns by customers when the product gets substandard. A product recall by a customer is not beneficial for any company. Product recalls happen mainly when the customer is being supplied damaged goods. Product recall results in tarnishing of the image of the company. A large number of product recall leads to the stretching of the network of reverse logistics which will be harmful to the company. A product call is a request for return to produce a group. It usually takes place due to finding of some safety issue. Recall is an attempt to minimize liability for corporate carelessness. And it is done to minimize or avoid damages. Recalls are certainly costly to the companies because at times it is made to replace all recalled products or pay for damages for the product which is due to use. These two are less costly when compared to the damage of brand name or defamation in the trust of the product. Waste management: Waste management in reverse logistics should be minimized by the company. Some forms of extra costs for the company that causes wastage are in the form of extra carrying costs, unrealistic inventory management etc. Proper waste management leads to the realistic flow of reverse logistics which in turn results in the smooth operation of supply chain management. Conclusion: Our study establishes that accountants and accounting process clearly have a responsibility to perform in the management of improved processes and in the legislation. They give an idea on the green supply chain and how the reverse logistics depend on the industries. There was strong support for the idea in the organizations. Identification of superior processes would also lessen transport activities that are obvious. Reference List Business definitions for: Reverse logistics, 2010. [Online] BNET. Available at: http://dictionary.bnet.com/definition/reverse+logistics.html [Accessed 28 April 2010]. Marsillac, E.L., 2008. Environmental impacts on reverse logistics and green supply chains: Similarities and integration. [Online] Inderscience Publishers. Available at: http://inderscience.metapress.com/app/home/contribution.asp?referrer=parent&backto=issue,2,6;journal,10,24;linkingpublicationresults,1:112375,1 [Accessed 28 April 2010]. Raicu, S., et al., n.d. Reverse logistics and space allocation for recovery management in new Urban settlement. [Online] CCASP TERUM, p.38. Available at: http://docs.google.com/viewer?a=v&q=cache:oGq6YZtRun8J:www.um.ase.ro/No12/3.pdf+pdf+reverse+logistics&hl=en&pid=bl&srcid=ADGEESgTOL5lgfYvgHKi_HLaFdJmDQcAmTagVBMcPRVxY3Z_VxIzqSeU25cd8gMeV3zJxSqIacO8Gawg7Z97JHPpvPWXKbSkdiYGIIlTO94DpscAW3kE31K_1xtuLPg7Cx_TXePkTMHF&sig=AHIEtbTd021HqmVrivu_Om8wN8xtKIuMgQ [Accessed 28 April 2010]. Read More