We live in an age in which organizations need to carry out their activities that help them achieve their objectives, but at the same time that allow them to contribute to the improvement of the same environment. A large number of the problems facing society today are those of an environmental nature since the large number of factories or companies in the world have contributed to the deterioration of the planet.
That is why new government programs, business policies, etc., appear every day that seek to solve some of these problems. The development of current companies implies adaptation to this type of program in which it is sought to reduce the environmental impact of the processes of the production of the organization's own products or services.
Social responsibility is one of the great challenges of organizations, which often implies changing the practices that were being carried out, implementing new programs, carrying out changes in processes, etc. All this to make the participation of the company in environmental care known to society.
This article addresses the issue of reverse logistics, one of the tools in environmental care and benefit to achieve the objectives of the company before society.
BASIC CONCEPTS
In order to arrive at the concept of reverse logistics, it is necessary to know some basic concepts that lead to a better understanding of the terminology used in this matter.
LOGISTICS
The first thing we need to understand is the concept of logistics. When we hear this word, a set of activities comes to mind that are planned and ordered in such a way that the achievement of them can lead to achieving the objective that we have proposed. This is not wrong, but a more formal definition tells us that logistics can be defined as “the process of planning, executing and controlling the flow of costs in an efficient and effective way of raw materials, inventory in process, finished products and information. related from the point of origin to the point of consumption in order to adjust to customer requirements ”. (POLO, 2016)
It is important to highlight the importance of such planning and implementation so that the order established in the beginning can be executed in such a way that from beginning to end of the process the activities are carried out as best as possible and the final product of the process can meet the demands of the company, but above all with the demands of the demanding customer.
From the point of view of organizations, companies must carry out adequate planning and implementation to be able to get the materials to the company that allow them to transform them through a process to later distribute them to consumers. The importance of having the necessary elements at each stage of the process allows the procedures to be carried out in a timely manner.
In organizations, logistics is studied from three aspects:
- Distribution logistics. It focuses on reducing the cost of transporting products to the final consumer. Internal logistics. It focuses on the flow of materials used in the processes that are carried out within the company Integration logistics. It is responsible for integrating the internal and external activities that the organization carries out in order to develop its products. This logistics is carried out in order that costs can be reduced, but without neglecting the quality of the processes and products.
Today's companies seek to implement comprehensive logistics that includes all processes from the collection of raw materials until the product reaches its final destination. Collection, production, storage, distribution activities, etc., are part of the logistics projects that organizations implement.
According to Miguel Gómez Aparicio, the objective of logistics is "to generate correct products, in the correct quantities, in the best conditions and that they are delivered to the correct place and time at the correct price". (GOMEZ, 2013).
All activities that are part of the creation or elaboration of the products must be taken into account when establishing logistics. From the primary activities which are a direct part of the process to the support activities which provide support to the former.
As part of the study of reverse logistics, it is important to note that, in the logistics process, an order must be followed, that is, all activities are carried out with a one-way chronology from raw material to final destination.
SUPPLY CHAIN
"It is a network of facilities and distribution means whose function is to obtain materials, transform said materials into intermediate products and finished products, and distribute these finished products to consumers." (ZAMARRIPA, 2008).
The supply chain is divided into three parts:
- Supply. It focuses on obtaining all those raw materials and materials that are needed to carry out the manufacture or elaboration of the products. Once the concentrated inputs are available in the supply stage, these inputs are transformed into a finished product through a process. Distribution. In this stage, the company ensures that each of the finished products can reach its final consumer. Through a system of a transport, distribution, warehouse and customer network.
For Zamarripa (2008) the supply chain includes from the suppliers of our suppliers to the clients of our clients.
SUPPLY CHAINS (ZAMARRIPA, 2008)
Making a relationship between logistics and supply chains, we can determine that in order to carry out the activities of the supply chains, planning and logistics must be carried out that allow increasing the quality of the processes, which allows the reduction of the costs in each of the processes and achieve customer satisfaction, as well as attracting new customers.
REVERSE
A definition of the word inverse tells us that it is opposite or contrary to an order, in direction or in sense. The processes are carried out in a sense as mentioned in the definitions of logistics and supply chain. However, today there are new needs that have generated the creation of new processes and procedures.
One of these needs is that of environmental care by reducing the impact that organizations and their processes have on it. The creation of government policies and laws has generated that companies seek to recover their products and generate a better amount of waste.
REVERSE LOGISTICS
This is how reverse logistics arises. Reverse logistics is a process within the administration of the supply chain that has gained importance, since it allows managing customer returns, impacting the service and recovery of the value of the product, adequate final disposal and development of friendly practices with the environment. (GOMEZ MONTOYA, 2010).
Another definition of reverse logistics consists of the movement of products from the point of consumption to their point of origin, that is, the recovery of finished products.
A third definition tells us that "reverse logistics is the process dedicated to the recovery and recycling of containers, packaging, solid waste, as well as those products that were returned by the customer, excess inventory and products that are already obsolete." (POLO, 2016)
In this sense, the name of reverse logistics is derived from the fact that the activities are carried out in the opposite direction to the normal or established direction. Traditional logistics focuses on activities directed towards the end consumer while reverse logistics deals with activities from the end consumer to the company or supplier.
INTEGRATION OF LOGISTICS AND REVERSE LOGISTICS (VEYRON, 2014)
OBJECTIVES OF REVERSE LOGISTICS
There is no organization that carries out its procedures or processes without having a goal in mind. The implementation of a system that uses reverse logistics must be in accordance with the main operating objectives of the company and not only of the organization but also of those internal and external public that participate in the processes. It is imperative that the application of the reverse logistics system adds value to the process and helps reduce costs. At the same time, reverse logistics has other objectives, among which are:
- Carry out an adequate administrative process of the different flows of products, information, materials, monetary values, etc. who participate in the different processes Identify, design, implement and improve processes so that those products that are recovered through reverse logistics can be repaired, reused, recycled or even eliminated, always focused on reducing the environmental impact of the processes and in the search to maximize the economic benefit for the organization Align and coordinate those reverse logistics processes with those that are part of traditional logistics and the supply chain, for which different tools, machinery and technologies can be used of the information.In this sense, the cost-benefit must be considered, preventing costs from rising and being detrimental to the company. Minimizing the amount of products that must be recovered. Through the implementation of quality control systems in the processes and through the management with the other participants outside the organization with which some specifications for the handling of the products can be negotiated.
Reverse logistics seeks to manage not only products but also all elements of the supply chain, such as information, products, money, etc. The achievement or benefit not only seeks to be economic but also to reduce environmental impact, reduce costs and improve the relationship with external publics that allow them to conserve them. (GOMEZ MONTOYA, 2010)
Likewise, some of the reasons for which reverse logistics is applied are:
Through the implementation of product recovery campaigns, it is possible to maintain or retain customers.
- It is possible to reduce costs by using recycled materials instead of those materials or new raw materials It allows the reduction of inventories by being able to change the packaging of the products It improves the image of the company before its customers by demonstrating the sense of responsibility for environment.
ELEMENTS OF REVERSE LOGISTICS
Speaking of those elements that participate in the reverse logistics process, we find the following:
- Main: suppliers, distributors, clients, retailers, companies in charge of recovering the products. They are in charge of starting the reverse logistics operations whose activities are focused on the management of the recovered product. Specialized: transport services, storage, recyclers, reprocessing, in charge of waste disposal. They are hired or generated by the company that is responsible for the management of the recovered product in order to execute some processes that allow the recovery of the product. Related: government organizations, environmentalists, etc. They are organizations that through regulations or requirements that can affect or benefit the development of reverse logistics activities.
REVERSE LOGISTICS PROCESSES
Reverse logistics is carried out through a set of processes. Through the use of the various resources available to the company and through proper coordination between the different audiences involved.
In this sense, there are value generation processes and others that are support processes. The value generation processes are those that intervene to transform products or materials in order to make them suitable for reuse, recycling or elimination. In the case of the support processes, they do not contribute to the transformation of the products, but they do support the transformation procedures to be carried out efficiently.
Some of the main processes are:
- COLLECTION: It is the process of collecting those products or residues from the place where the final use commonly called clients was granted to be able to transfer them to the place where the recovery treatment will be given. The origin of the products must be planned correctly, as well as their destination since it is necessary to carry out an adequate process of planning, execution and control in it because if you want to have an adequate reverse logistics system, this process is critical. PRODUCT SELECTION AND CLASSIFICATION. Once the collection process is carried out, it is necessary to inspect those materials or products recovered in order to determine aspects such as the reason for the return, the type of products, the quantities recovered, etc.The selection also allows to know the quality of those recovered products since depending on it will be the use or application that may be granted. Establishing a classification of the products also offers an advantage in the handling of the products as they are grouped according to various criteria such as: materials, final destination, etc. Direct recovery of the product. Sometimes the product can be returned to the market or to the production process immediately. Those characteristics for which these products were returned are easy to modify and can be returned to the customer. Transformation. Are those activities carried out in order to transform the recovered products or those residues that could have been recovered, in order to grant them or new use,use them as material for some other production process or, in the case of waste, cause the least impact on the environment when discarded. Not all levels of transformation are the same since in some cases the product can be partially repaired, in others functional parts are used and a new use is assigned to them, recycling is another of the activities that allows the use of the product in different production processes or assigns other uses to the product. It is responsible for moving the products from the recovery place to the transformation place. In order to avoid additional expenses, organizations often use their traditional logistics transport system to also carry out reverse logistics transport activities.As its name indicates, it refers to the storage or protection of the products during their different stages, this storage can be temporary or through periods of time that are programmed for their control.
Each of these processes must coordinate and complement each other since they are not isolated processes. Each of them has the main objective of managing the recovered products.
TREATMENT OF RECOVERED PRODUCTS IN REVERSE LOGISTICS
When a product has been recovered from the client and is transferred to the point that the company has designated for its transformation, it is imperative that the company decides what it is intended to do to the product, making an analysis of the implications in costs and in terms of environmental.
The treatment that can be given to the products during the transformation stage are:
- Reuse. The product can be used again without the need for additional processes or special treatments. Examples of this type of activity are customer returns for damage to packaging but that can be used Reprocessing: can be carried out at different levels such as: repair of the product, remanufacture of product parts, when it is carried out In carrying out this type of activity, the product can be used by restoring its functionality or by implementing it in new products. Recycling. The parts or packaging of the products can be used in the creation of new products that do not necessarily have to meet the same characteristics of the original product, but without increasing costs and increasing environmental impact.In this activity, the product is destroyed and sent to the trash.
For organizations it should be the last option since after this it is no longer given another use at least by the organization itself. (GOMEZ MONTOYA, 2010)
From the economic point of view, the best application option to a product should be reuse because its application does not imply an increase in costs. Reuse of the product or even rework is used to achieve the reuse of a product or applications in other products. Recycling also allows the use of product elements in different products but that in the same way result in benefits for the company. Considering the costs, the least viable option for the handling of the products turns out to be the elimination since it implies operating expenses to be able to dispose of them without being able to obtain a profit.
DEVELOPMENT OF STRATEGIES BASED ON REVERSE LOGISTICS
When the organization does not have a system based on reverse logistics, it is necessary to analyze its implementation based on the reasons for which it is desired to establish it based on these reasons, it is possible to generate strategies to carry it out. From the point of view of the reasons to implement a reverse logistics system we find.
- ENVIRONMENTAL REASONS. If the purpose is to care for the environment, strategies should be designed that favor recycling and reduce the environmental impact generated through waste. CUSTOMER SERVICE. If what motivates the implementation of reverse logistics is customer service, the organization should strive to improve the returns of orders for those defective products or even those whose expiration dates are close. ECONOMIC. If the reason is economic, a good strategy would be focused on the recovery and reconstruction of those products that have been returned.
It should be considered that reverse logistics is not the exclusive task of any department of the company, but rather that the entire organization must be involved since this is a demanding program.
CONSIDERATIONS FOR THE IMPLEMENTATION OF REVERSE LOGISTICS
Not any organization can implement it since it must take into account the following considerations:
- Time to be used so that the program can be implemented correctly Budget allocated Human resources to be used in each of the stages Determine if reverse logistics is a strategy or simply an exercise Benefits on investment Appoint the person responsible for implementing the process If available hires an external company, an evaluation is necessary, as well as the degree of intervention of said company in each of the processes In the case of dealing with clients, it is necessary to determine those in charge of dealing with the same, develop procedures to follow in the processes that the customer intervenes and there are products to return and make them known to customers so that they can work in harmony.
In the same way, when you want to implement the reverse logistics system successfully, it is recommended to map the reverse logistics processes so that the entire organization has knowledge of the processes that are being carried out. Another aspect that should not be forgotten is that any process carried out in organizations must be measurable, so establishing performance indicators benefits the company by being able to assess each of the proposed proposals. Finally,and no less important is the fact of allocating sufficient financial resources not only to carry out the activities of the process but also for those administrative activities that allow to carry out the control and measurement of the processes in such a way that it can be determined with anticipation of impacts and achievements. (REVERSE LOGISTICS)
PROBLEMS FOR THE IMPLEMENTATION OF REVERSE LOGISTICS
Some of the disadvantages for the implementation of a reverse logistics system are:
- The products to recover. Depending on the type of product that is recovered, the type of technology to be used will also depend, as well as the strategies to carry it out. The ease of recovery of the product, as well as the costs that this represents may change with each product. The recovery option to apply. Each of the different processes that can be applied to the process from reuse to disposal have unique application characteristics to be considered in the implementation of the system. Business objectives. Reverse logistics must be part of the objectives of the company or a means to achieve them. The dimension of the company.Depending on the size of the organization, it is the scope that it has to carry out each of the activities as well as to be able to carry out all the logistics strategies. (ROJAS, 2016)
REVERSE LOGISTICS APPLICATION EXAMPLES
Some examples of the application of reverse logistics in companies are the following:
- Tire waste management: Various strategies are increasingly being implemented to use tires once they reach their useful life. From the elaboration of ornaments to the use of transformation processes to turn them into new products such as waterproofing. Recycling of computer equipment: there are companies that are dedicated to collecting computer equipment which can be reused or for use of some of its components. Cell phone recycling: like computers, cell phone companies sometimes carry out equipment collection drives. The same happens with batteries of this type of equipment. Collection of products.There are companies mainly focused on the production of food consumption products, which are in charge of collecting the products from customers before their expiration date arrives and placing them at a lower price in other establishments. It is one of the sectors with the greatest boost in reverse logistics in order to be able to use various components of its equipment. Breweries. Through the collection of their containers which can be used again and even be melted for the manufacture of different packages Paper. Companies reuse the paper or can even transform it into new paper and sell it without the need to hide its characteristics. Refurbished products. For sale on the internet,they allow companies to sell electronics and computer equipment at a lower price.
CONCLUSIONS
In an environment as competitive as the one that organizations must face every day, they cannot afford the loss of capital derived from those products that have no commercial outlet. For this reason, reverse logistics can be a very interesting tool for organizations to recover their products, but above all to give value to them again and that they can provide a profit. Companies cannot allow themselves to dispose of their equipment or components without them giving them some benefit, on the contrary, it should be the last option.
Implementing a reverse logistics system not only provides an economic benefit but can also provide a social and environmental benefit. Recognition of an organization that cares about society and the environment allows companies to be accepted towards different publics and towards those clients or those publics that could become clients.
More and more organizations should implement a reverse logistics system to the extent of their possibilities in order to stay at the forefront and competitiveness that the new times demand.
THESIS PROPOSAL
Analysis and proposal for the implementation of a reverse logistics system in a company in the region.
OBJECTIVE
Analyze the feasibility of implementing a reverse logistics system and prepare an implementation proposal.
Bibliography
- GOMEZ MONTOYA, R. (DECEMBER 17, 2010). REVERSE LOGISTICS A PROCESS OF ENVIRONMENTAL IMPACT AND PRODUCTIVITY. Obtained from: http://www.scielo.org.co/scielo.php?script=sci_arttext&pid=S1909-04552010000200006GOMEZ, JM (2013). LOGISTICS AND COMMERCIAL MANAGEMENT. MADRID: MCGRAW-HILL.POLO, AM (MAY 9, 2016). DEFINITION AND EXAMPLES OF REVERSE LOGISTICS. Obtained from http://www.gestiopolis.com/definicion-ejembres-logistica-inversa/ROJAS, K. (MARCH 7, 2016). FUNDAMENTALS OF REVERSE LOGISTICS. Obtained from http://www.gestiopolis.com/fundamentos-la-logistica-inversa/ZAMARRIPA, N. (MARCH 1, 2008). Obtained from SUPPLY CHAIN:
Amisaday Huerta Zamora. Degree in Administration from the Higher Technological Institute of Tierra Blanca
Student of the Master in Administrative Engineering at the Technological Institute of Orizaba
With gratitude to the National Technological Institute of Mexico for being able to belong to him and to Dr. Fernando Aguirre y Hernández for the motivation for the preparation of these articles for the subject of Fundamentals of Administrative Engineering.
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