Summary
The following article addresses a topic that Mexico is adopting, but that in the United States and in most of the countries that make up the European Union is an intrinsic activity of the value chain. As the first point we will define our concept, and we will review what were the reasons that gave rise to this process; We will analyze its factors and benefits when applied; as well as we will take a look at the legislation that currently governs this activity.
We will illustrate the process carried out by reverse logistics and finally we will mention some examples of international companies that already practice it.
Introduction
In an era where competition is stronger every day, organizations see the need to discover areas of opportunity that allow them to obtain higher incomes and provide added value to the products they manufacture, this is where the concept of logistics is redirected in opposite direction and gives us a different perspective to what we know within logistics. The panorama becomes broader by offering other types of features that will ultimately serve as a platform to be used in the future and collaborate in the conservation of the environment.
Definitions
Logistics
According to RAE it is "the set of means and methods necessary to carry out the organization of a company, or of a service, especially of distribution". (Spanish Royal Academy, 2014).
Logistics as we all know it is one that is responsible for efficiently distributing a company's products, providing excellent customer service and at the lowest possible cost. Next we will analyze throughout this article a ramification of this discipline and its impact on current markets. For this we will add a term to the concept which is "inverse".
Reverse
Or inverse which means the opposite. (Spanish Royal Academy, 2014)
Reverse logistics
Well, once we have defined these two concepts separately, next we will delve into the meaning. According to an article published on the CNN Expansión page, he calls reverse logistics as that which, on the contrary, is not the same; however our definition tells us that it is “it is the process of projecting, implementing and controlling a flow of raw material, inventory in process, finished products and related information from the point of consumption to the point of origin in an efficient way and the most economic possible with the purpose of recovering its value or that of the return itself. ” (UNAM Engineering, 2015).
However, recovering value does not only refer to obtaining economic remuneration for the company, since reverse logistics has as one of its purposes to reduce the waste we all generate and support initiatives such as recycling and avoid the use of waste. virgin matter in new products.
Background
It is our knowledge that logistics has a series of processes within the supply chain, and that unfortunately sometimes there are drawbacks that we will mention more broadly later so that end customers tend to return merchandise that does not meet specifications requested, such situation aroused the concern to develop a new practice that today we know as reverse logistics; which not only covers the fact of returns but rather goes further than we can imagine. Recovering products used or discarded by other people is not something new, although now with sustainability and the green doctrine that now surrounds companies, it is said that ancient cultures such as Mesopotamian, Inca, Aztec,Greek or Roman already had recycling practices, for example their coins were melted to be reused or sometimes they were not even melted, they were simply resealed with the image of the new regent for their use; it is also related that the weapons were melted down or sometimes turned them into agricultural instruments, as we can see these practices are not new, they are part of common sense.
With the industrial revolution, the boom began to capitalize as much as possible without considering the damage that this change could have to the environment, the new forms of production, greatly exploited natural resources without anyone worrying about contamination..
In the late 1950s and early 1960s, environmental awareness began to manifest itself, but it was not until the 1970s that the ravages of the consequences of the industrial revolution became evident; And that's when the concern arises to find alternatives that reduce environmental deterioration.
For the 70s, the fact of providing quality from raw materials to the final customer makes managers begin to use information technology to better control and offer better service to their customers, the following decade the term appears TQM2 (total quality management) and begins to measure performance in financial terms.
In 1985 logistics is defined as: “A part of the supply chain that raises, increases and controls the efficient and effective flow and storage of goods, services and related information from the point of origin to the point of consumption in order to satisfy the requirements the client's"
For 2003 this definition adds “in reverse of goods” and in this way companies begin to integrate the fact of being able to accept by the same means returns of products that do not meet the requested specifications, taking into account two very important aspects such as time and the cost.
Causes that originate it
- Goods in defective condition. Return of excess inventory. Customer returns. Obsolete products. Seasonal inventories. Environmental care measures.
General
Reverse logistics is a discipline that is booming in the United States, Canada and some countries in Europe. On the other hand, countries such as Brazil, Colombia, Argentina and Mexico have little time entering this area; It apparently has the same function as conventional logistics, however it helps organizations to be more competitive since it has captured areas of opportunity that allow profits to be increased by up to 5%.
On the other hand, large companies are those that have chosen to adopt this concept, later we will mention some examples and in contrast for small and medium-sized companies it is a little more complicated.
It seems that the fact that logistics goes in reverse does not have any new implications, however it is important to mention that the requirements are different in many cases a better shipping rate is sought, the volume of returns is usually smaller than shipping and usually represent higher costs.
Reverse logistics concept
Recovery process in the reverse supply chain
Reverse or reverse logistics as it is also known, not only impacts for its environmental reasons, but also because it efficiently manages the products introduced into the supply chain, with the aim of recovering their value to the maximum. Below we present figure 1 taken from an article in the online logistics magazine.
Reverse logistics concept
The previous figure shows all the elements that intervene in reverse logistics and that are necessary for its correct destination and treatment.
Stages of reverse logistics
The table we present below shows the different proposals by various authors and researchers on the subject and the contributions of its development and application:
Stages of reverse logistics
Activities
Withdrawal of merchandise
Merchandise classification
Product reconditioning
Return to origins
Destruction
Administrative processes
Recovery, recycling of packaging and hazardous waste
Key processes in reverse logistics:
Procurement and purchases.
It implies the acquisition of raw materials and that they are friendly to the environment.
Reduction of virgin inputs.
Promote the culture of return, through engineering activities and human resources for the reuse of surplus materials rather than new and never used inputs.
Recycling.
Develop policies of this type that allow the use of all types of recycled materials, and invest in studies that reduce the use of virgin raw materials.
Substitution of materials.
At this point, innovation plays a very important role since it must provide options that replace heavy materials with lighter ones.
Waste management.
A residue evaluation of the materials used for the elaboration of products should be made and if it is necessary to establish policies that govern their management.
Reasons to apply reverse logistics
Compliance with environmental legislation.
Economic benefits: decrease in production costs, savings in the purchase of raw materials, etc.
Recovery of raw materials difficult to obtain. Customer service and guarantees.
Social responsability.
Competitive advantage.
Legislation
Currently such is the impact that the industrial environment has caused the environment that there are laws that regulate the handling of certain aspects, for example the directive on packaging and packaging waste (DC 94/62 / CE) (Hortal & Navarro, 2011) was one of the first to raise its hand and put a stop to the unlimited circulation of plastic containers, likewise the Waste Framework Directive (DC 2004/12 / EC), which aims to “establish measures to protect the environment and human health by preventing or reducing the adverse impacts of waste generation and management, reducing the global impacts of resource use, and improving the effectiveness of such use. ” (Hortal & Navarro, 2011).
In addition to these and other European initiatives at the national level, a National Plan for Waste PNIR 2008-2012 relating to packaging has been unified.
Companies that apply reverse logistics
Referring to the international arena, which, as we mentioned where this practice is most abundant, highlights the industries of the automotive sector such as Volkswagen and BMW; firms that market software and hardware such as IBM and HP.
IBM company present in more than 160 countries around the world recently implemented actions in its supply chain, since 1990 maintains a product recovery program in countries in Europe in addition to having a line of products manufactured with recovered and offered components to the population at a low price.
Another characteristic of IBM is that it is focusing on building its teams so that they can grow and adapt to new technologies.
On the other hand, the HP company has little more than 20 years in the practice of recycling, with which in more than 50 countries they have managed to recycle close to a million tons of electronic products and printer cartridges; With this, HP is a pioneer in the concept of a closed-loop value chain.
conclusion
As we can see, reverse logistics is not only the reverse of conventional logistics, it is a relatively new topic in our country despite its great development in the United States, Canada and countries in Europe.
It considers other points that are of vital importance to obtain economic benefits for the organizations that practice it and among its applications it has established support for the environment, avoiding the use of virgin materials in the production of products. Through its short evolution some authors have been modifying its stages according to the needs that have arisen. Transnational companies like HP have a well-defined goal of what they expect from the application of reverse logistics, our country is gradually introducing itself to these practices and at the moment only large companies are developing the areas of opportunity to provide these services.
Gratitude
Firstly, to the National Technological Institute of Mexico, my Alma Mater, to Professor Fernando Aguirre Y Hernández, who teaches the subject of Fundamentals of Administrative Engineering for sharing the knowledge necessary for writing an article and for encouraging us daily to be better professionals.
Bibliography
- Guillermo, A. (March 8, 2009). National Polytechnic Institute. Obtained from the National Polytechnic Institute: http://hesis.ipn.mx/jspui/bitstream/123456789/4136/1/I2.1117.pdfHortal, M., & Navarro, VF (March 28, 2011). Interempresas. Obtained from Interempresas: http://www.interempresas.net/Logistica/Articulos/50133-La-logistica-inversa-que-es-y-para-que-sirve.htmlOrtiz, S. (May 06, 2009). CNN Expansion. Obtained from CNN Expansión: http://www.cnnexpansion.com/manufactura/2009/05/06/logistica-inversa-al-reves-no-es-igualReal Academia Española. (October 16, 2014). Royal Spanish Academy. Obtained from the Spanish Royal Academy: www.rae.es Logistics magazine. (March 9, 2015). Logistics magazine. Obtained from Logistics Magazine:
