The term "logistics" can be defined as the process of planning, executing and controlling the cost flow efficiently and effectively of raw materials, inventory in process, finished products and related information from the point of origin to the point of consumption. in order to adjust to customer requirements. Reverse logistics includes all the activities mentioned in the definition above with the difference that it covers them in reverse.
Therefore, reverse logistics is: The process of planning, executing and controlling the cost flow efficiency, starting from raw materials, inventory in process, finished products and related information from the point of consumption to the point of origin in order to reuse or eliminate it. More precisely, reverse logistics is the process of moving goods from their typical final destination for the purpose of reuse, or their proper disposal.
Reverse logistics is more than the reuse of recycled packaging and packaging materials. Redesigning packaging to use less material, or reducing energy and transport pollution are important activities, but they could be secondary to the real importance of implementing logistics as such. In this writing we will review this concept. (Moral, 2011)
The logistics concept
Logistics at the business level consists of organizing the activities necessary for the supply of all materials, production, warehouse and distribution of products. Logistics in companies can be seen in three different ways:
- Logistics for physical distribution that focuses on lowering the cost of transportation Logistics to integrate internal activities that focuses on the flow of materials within the company Logistics to integrate internal and external activities that aims to reduce production costs or better prices.
Today logistics is being seen by companies as a way of integrating supply, production, warehousing and distribution activities to achieve a competitive advantage in the company. Logistics directly affects the quality and final cost of the product.1
Competitive Advantages and Reverse Logistics
Logistics aims to generate the right products, in the right quantities, in the best conditions and delivered to the right place at the right time at the right price. (Aparicio, 2013)
There are two types of essential logistical activities: primary and support according to Michael Porter. The primary ones are those that are part of the production process of the company and the support ones are those that support the primary activities.2
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1 Image taken from the book Logistics and Commercial Management by Juan Miguel Gómez Aparicio
2 Image taken from the book Logistics and Commercial Management by Juan Miguel Gómez Aparicio
Reverse Logistics Activities
Reverse logistics
Logistics has always been known to be about the flow of materials along a downstream supply chain. But, there are two other flows of "materials" that must also be managed efficiently:
- Containers and containers used in distribution and Products that are returned by the customer as well as those that have been used after their useful life: products that are already out of use.
The management of all the containers and containers includes several processes that can become complete due to various legal, sanitary, economic restrictions and problems specific to the process that obviously do not add value in the supply chain. But the increase in trade, especially at the global level, has highlighted the need and importance for companies to manage this type of material very well.
Managing products that have already completed their life cycle such as tires, batteries, cars and electronic equipment is so far a complex issue to deal with because current and future society has not paid attention due to the treatment of this waste. and in turn the world legislation contributes to this phenomenon remains latent. What is currently a rule is that the one who produces the waste is the one who must treat it after its useful life. In this way, despite the fact that the product could have been manufactured in a certain place, it is necessary that at the end of its useful life, it be treated in the same way anywhere in the world.Today many companies see that this is a problem that may grow in the future and that if it is exploited, it can become a competitive advantage to improve the image of the organization. (Pires, 2007)
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. With reverse logistics, what you do is worry about returning the product to the company for any reason.
The reasons why reverse logistics are applied are:
- Campaigns to replace products which helps to retain customers Helps to replace virgin raw materials with recycled materials helping to reduce costs Gives the possibility of changing product packaging to reduce inventories Helps the company to raise its image with its customers for its commitment to environment.
Reverse logistics can be leveraged by organizations to reuse the returned products while showing a good image to their customers, making them feel that they can return the products without any inconvenience.
Real examples of reverse logistics
Reverse logistics is becoming increasingly important as many companies are changing the way they do business. They can take advantage of it to differentiate themselves from their competitors by offering good customer service and reducing production and operating costs. In addition to this, international standards such as ISO 14000, whose objective is to manage the environmental aspects of organizations, allow programs to be implemented where reverse logistics plays a fundamental role.
The traditional way in which the life cycle of products is managed, starting with supply, production, consumption and waste, has created problems that affect the sustainable development of societies. This has led to the start of managing a change of perspective in the way resources are used, especially in the way of recovering these products and materials to incorporate them again in the economic cycle.
In countries where the rate of solid waste generation is higher than the capacities of sanitary landfills, this type of change is occurring the most. This is how the new way of looking at the life cycle of products has been supplying, production, consumption, re-use, recycling and finally disposal, which has been promoted by laws and regulations at the global or local level, as well as for economic reasons. since you can have savings by reusing or recycling some materials instead of discarding them to re-produce them again.
Developing countries are what in recent decades have seen opportunity in this type of operations due to the advantages they offer.
Companies that produce beverages such as soft drinks, water or milk have had to resort to reverse logistics due to pressure from the community in general due to the large accumulation of waste from this industry.
As an example you can see the company FEMSA Coca cola based in Mexico City. This company is the fourth largest producer of plastic bottles in the world, which is why it decided to implement the Numetrix / 3 software that specializes in reverse logistics. With this tool, the company improved the special promotions program in such a way that the peaks in demand coincided with the peaks of return of the bottles to the inventory. In this way, the need to manufacture more bottles to meet demand was reduced. (Garcia, 2010)
conclusion
Reverse logistics is a process that offers companies opportunities to create competitive advantages before their clients and competitors, since they can take advantage of the returned products for their re-incorporation into the market or give their clients confidence that they can return the products without inconvenience.. It also offers an alternative to help mitigate the environmental impact generated by waste such as plastic bottles. Applying reverse logistics in the company can also help you to have a good position with your clients by transmitting the image as a company that cares for the environment.
Bibliography
Aparicio, JM (2013). Logistic and commercial management. Madrid: McGraw Hill.
Garcia, LA (2010). Comprehensive logistics management: best practices in the supply chain. Bogota: Ecoe Ediciones.
Moral, LA (2011). Supply Chain Management Dictionary: Supply Chain Terminology. Bogota: Ecoe editions.
Pires, LC (2007). Supply chain management. Spain: McGraw-Hill.
A g radecimientos
To the Technological Institute of Orizaba for giving me the opportunity to train professionally and to Professor Fernando Aguirre y Hernández for all the knowledge he has shared in his subject Fundamentals of Administrative Engineering to learn and improve my abilities to write quality scientific articles.
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