"Reverse Logistics consists of the process of planning, executing and controlling the efficiency and effectiveness of the flow of raw materials, inventory in process, finished products and related information, from the point of consumption to the point of origin, in order to recover value or correct disposal. ” (Rogers and TibbenLembke, 1999) through (Mendoza, 2015).
logistics-reverse-martin-railingIntroduction
This is a concept that day by day becomes better known, the main reason for this is the advance that has been presented over the last few years in the area of information and communication technologies.
Reverse Logistics specializes in the return of the different products that a company manufactures. The main objective of this is to recover and recycle packaging, waste or hazardous waste, as well as customer returns, seasonal inventories and obsolete products.
In companies, reverse logistics has had a very relevant link, inside, the reasons for this are the values that are operated and harm the comparative results of companies. It is necessary to recognize that the administration of inverse flows can be an advantage, because by minimizing processes, better results are obtained in the supply chain and logistics is recognized as the method to manage the movement of knowledge, merchandise and money circulating.
The term reverse logistics is not only used in relation to logistics, it is also used in recycling, waste and residue disposal, source reduction, repair, and manufacturing. This concept is increasingly known, this is due to environmental awareness, which requires analyzing waste problems, used components, their reuse and the environmental impact in relation to waste deposits in dumps or their best ideas to reduce the environmental impact.
The theme of social networks, the development of the internet and its innovations accompanies us in our daily life, we have made it part of our routine since it has made life easier for us, all this has led to the fact that alongside new business opportunities provided by e-commerce, specific logistics needs have also been created, which must be addressed by organizations in the sector as quickly as possible, with efficiency and vigor.
Key concepts
Here are some concepts that are considered key, for a better understanding of the article.
Logistics
"Important operational function that includes all the activities necessary to obtain and manage raw materials and components, as well as the handling of finished products, their packaging and their distribution to customers." (Ferrel, Hirt, Adriaenséns, Flores and Ramos) through (Jamart, 2012)
"It refers to something that is contrary." (Oxford, 2018)
Reverse logistics
"Reverse Logistics consists of the process of planning, executing and controlling the efficiency and effectiveness of the flow of raw materials, inventory in process, finished products and related information, from the point of consumption to the point of origin, in order to recover value or correct disposal. ” (Rogers and TibbenLembke, 1999) through (Mendoza, 2015)
Reverse logistics.
Hearing the term Reverse Logistics we can believe that it is something new that emerged just a few months ago, but this is incorrect since the principles of this concept come from the year 1971 by Edward N. Luttwak, where smart entrepreneurs are outlining efficient methods to reuse their products.
The supply and logistics area of companies has been constantly changing in these times, the reason for this is the changes that have arisen in the experience of customer behavior and the purchase they make. These actions have had a direct effect on the way in which the managers and administrators of the companies have to begin to carry out their delivery tactics, this in order to retain their clients and obtain higher market shares.
But those in charge of logistics not only face challenges in the way in which they are responsible for producing and distributing all their products or the services they offer to each of their clients (this term is known as forward logistics), but also in the way in which they can reverse this process.
One of the most important parts of a distribution strategy (which have been ignored for a long time) is the logistics processes that exist when dealing with materials or products that are returned by consumers.
The transfer of services and goods from the department that manufactures them to the final customers depends on logistics. Reverse logistics is responsible for issues arising in the management of the supply chain of the transfer of materials from the customer or consumer to the manufacturer or to collection sites, for recycling or in other cases, destruction. If we look back, we will notice that logistics was only about having the right goods in the right place, at the right time and at a minimum cost, but nowadays, all these actions, which may seem simple, have been complicated to the point of becoming a process.
With reverse logistics, when a product is returned to the company or company that manufactured or distributed it, either within the allowed period of time or a product at the end of its useful life, the company has different ways of managing it with intent. to recover a part of its initial value.
Supply chain managers begin to understand that by not having an adequate method of returns, they are companies that are losing money and investments. It is at this point that different questions arise such as Why did the client decide to return this product? What was the failure of these products? Is it possible to reuse or make a profit from a returned product?
These questions become more common as the area of deliveries and shipments of goods grows larger, the only way to answer all these questions is to create a reverse logistics strategy that manages to improve the efficiency of the supply processes.
This management has become a skill that focuses especially on reducing costs, efficiency and return of shipments and giving the best possible experience to customers.
Logistics objectives.
Some objectives that logistics pursues are the following:
- Offer support to the life cycle of products or services: We know that logistics refers to the delivery of products or services that are required in a timely manner, it must be able to handle the returns of the same (reverse logistics). The return can be of a product in a defective state, recycling of products or packaging. Decrease the deviations: The stability of the performance cannot be reduced, an example of this is the delivery periods, these have to remain the same. The consolidation of movements: Transportation prices are often high, but can be reduced if small shipments are combined with large shipments, as well as less frequently. Minimum inventory:Logistics seeks to have a minimum inventory because the cost of having abundant inventories is very high, which is why it must remain in small quantities.
Reverse logistics objectives.
Some objectives that logistics pursues are the following:
- Recycling: The main objective of reverse logistics is the recycling of the materials used. One of the most widely used products in the industries is packaging, because it is necessary when transporting the products, the negative point of this is that these containers are of no use to customers. In this case, one of the alternatives is to reuse this type of material, returning it to its manufacturing center so that it can be reused as raw material for other products that are manufactured. consumer as for the producer, these wastes must be processed and treated in the corresponding way to correctly perform the standards,in addition to being responsible in the ecological field, something that today is more than necessary. Usually the origin center has the facility to deal with these types of waste. Product substitution: It is normal that when delivering a certain order there is an incident or error, for example, when ordering, the data was not answered correctly and the customer chooses to make a last minute change. In these cases it is recommended to make a substitution of the products. The client will return the unwanted product to the distributor and in exchange the latter will take care of replacing it with the one the client wishes.It is normal that at the time of delivering a certain order there is an incident or error, for example, when placing the order, the data was not answered correctly and the customer chooses to make a last minute change. In these cases it is recommended to make a substitution of the products. The client will return the unwanted product to the distributor and in exchange the latter will take care of replacing it with the one the client wishes.It is normal that at the time of delivering a certain order there is an incident or error, for example, when placing the order, the data was not answered correctly and the customer chooses to make a last minute change. In these cases it is recommended to make a substitution of the products. The client will return the unwanted product to the distributor and in exchange the latter will take care of replacing it with the one the client wishes.The client will return the unwanted product to the distributor and in exchange the latter will take care of replacing it with the one the client wishes.The client will return the unwanted product to the distributor and in exchange the latter will take care of replacing it with the one the client wishes.
Steps for correct reverse logistics.
Diagnosing the elements and materials that must be managed by the company: This is the first step to carry out the reverse logistics, it refers to how it could be done as well as what uses could be made of these.
Examine and consider the economic and environmental impacts: In order to determine the way in which the products are going to be stored, it is necessary to take into account both impacts.
Catalog the waste: In this step the following criteria are considered: status, destination, level of danger, storage and the type of treatment that will be given.
Decide what strategies are to be followed: The strategies that exist are, recycle, reuse, restore or redesign.
Define what treatment will be performed on each product in order to reuse it: It is necessary to correctly determine what treatment each product will have.
Storage: Once the waste is treated, they are transported and stored.
Control of expenses: The last step refers to the expenses that occurred during the treatment and reuse of the products, in the same way it must be calculated how much the materials were used to reuse them.
Steps for correct reverse logistics, own elaboration with information from (Navarro, 2015)
Advantages offered by reverse logistics.
According to Sánchez (2018), some advantages offered by reverse logistics well applied to organizations and consumers are the following:
- The uncertainty of the arrival of the products that are out of use tends to decrease.The opportunity to be present in new marketsThe client develops a greater confidence towards the companyThe presentation and reputation of the company improvesThe company obtains competitive advantagesFeedback data on the productThe level The risk of liability and returns is reduced Recovery of defective products is achieved. The environmental impact caused by the products becomes less, this is very favorable for companies.
Disadvantages of reverse logistics.
Like everything that happens around organizations, reverse logistics has some disadvantages that according to Mendoza (2015) are the following:
- It is necessary to carry out previous studies in order to establish the decision policies on the subject. Each of the departments that make up the company must be involved and related to the activities carried out in reverse logistics. Inspections must be carried out in each one of the products in a meticulous and individual way, since each of these has different characteristics. The products can arrive during the process in an indeterminate way. This process is more about handling and treating waste.
Points needed to boost reverse logistics.
- Social responsibility: It is usually promoted by non-governmental organizations and buyers' associations that, supported by the purchasing power they have, look for products that are environmentally friendly, as well as insurance. Cost-benefit considerations: The objective of this is to achieve a cost of lower production but with better products. Legal requirements: These derive from the protection of health and the environment, from considerations towards the costs of waste processing, among others.
Reasons for the need for reverse logistics.
An organization can start to apply reverse logistics for different reasons, some of these are:
- Products with a defective state, that is, when a product has an abnormality and causes damage to the consumer due to design defects, erroneous labels or faulty manufacturing. Re-integration of excess inventory. A seasonal inventory, this is widely used since Its design is special to meet seasonal demand in a more economical way, this by varying production levels. Returns made by customers.
Products that are included in reverse logistics.
It is necessary to know that there is a classification of the products that can be included in the reverse logistics process, Navarro (2015) shows us the following:
- Discontinued products: This includes each of the first quality products that were impossible to sell but can still be reused. Seasonal goods: Refers to products manufactured for the winter or summer season. Excess stocks: A clear example of This is that sometimes companies order more than they have sold, this causes them to keep a considerable amount of products and the sale of these is almost impossible. The products that are sent to be destroyed: An example of this are the batteries.Existence of defective products: Usually the sale of defective products is impossible but this does not mean that they are useless and have to go directly to the trash, it is possible to find a new use for them.
The reverse logistics information system.
The information obtained through reverse logistics cannot be stored or processed by software since it is non-existent, so the most logical thing is to develop a customized system or the most economical option, to modify one that is already owned. The chosen system must be as flexible as possible to handle the different cases that may arise in returns, as well as being complex enough to function properly through the company's departments. In order to achieve successful software, it is necessary to have significant information that can help with the returns and the expenses that these imply, and to establish a database with the information regarding the reasons for the returns, which can be:
- The service or repair of the product or Composition in factory: The product is returned to the supplier for its composure Shipping error: The product sent to the customer is not correct or Customer error when placing an order or Maintenance or Does not work well or The Customer placed a duplicate order or Duplicate or Incomplete shipping: The shipment was missing a component or part or Expired Not ordered by the customer or Wrong quantity or Damaged during shipping: This case will be claimed from the transport company or Damaged or For defects or damaged or not working well or other
Activities carried out by reverse logistics.
- DestructionRemoval of merchandiseReturn to originsAdministrative methodologyClassification of merchandiseReconditioning of merchandiseRecovery, reuse of containers and packaging
Example of reverse logistics.
The number of companies that have joined reverse logistics is increasing more and more, this is proof of the great benefits that it attracts, not only for companies but also for the environment. If we talk about the examples of reverse logistics, it is impossible not to mention a company that was a success in this field: Amazon.
This multinational company has left confidence and support for this method and has told most of the companies that offer their products through the platform. The return policy of "Amazon reverse logistics" is one of the most envied.
Recycling and reverse logistics.
Reverse logistics can be used in such an important and controversial area, especially today, the recycling of materials and products highly harmful to the environment. Certain companies have found that a well-performed reverse logistics system can earn their companies the reputation of "environmentally committed companies" as well as considerable cost savings. Creating a correct reverse logistics will involve the use of external consultations, in addition to a great effort.
Thesis proposal
Implementation of reverse logistics in the cyber that is located within the Technological Institute of Orizaba.
Objective.
With cyber using reverse logistics, you can make better use of the worksheets that have already been qualified, using them as recycled sheets and you could also use computers that have already been discarded, after review by students of the Technological Institute of Orizaba and with this lower costs, for the benefit of all.
Thanks.
I thank my family, for giving me all the support and the drive to continue day by day, the Orizaba Technological Institute for opening its doors to me and allowing me to continue my studies with the Master in Administrative Engineering and Doctor Fernando Aguirre y Hernández for motivating me with their Knowledge in the Administrative Engineering Foundations seminar to carry out each of the assigned articles.
Conclusion.
Reverse logistics helps to care for and protect the environment by recycling products and materials that affect terrestrial ecosystems. In addition, reverse logistics has many advantages for the companies that carry it out, such as improving their image, developing a better reputation, having the opportunity to open new markets similar to that of the company's main activity, including reduction of costs and increased profits. In this way, reverse logistics provides great savings options for commercial companies, which must be considered for their effective development. To achieve all the objectives of reverse logistics, it is necessary to create awareness and collaboration between each of the departments and the agents, that is, the suppliers, distribution,human resources, transport and shipping, and end user. Reverse logistics has endless benefits for the environment and for companies, both parties appreciate this, although it must be mentioned that it is not an easy task to perform.
Bibliography.
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