Next, the concept of reverse logistics and everything related to its understanding is explained, since for some decades it has begun to observe the importance that has, from the environmental point of view and from the economic point of view, the management responsible and adequate for industrial waste.
Some companies, mainly induced by increasingly restrictive legislation in terms of waste generation, begin to consider the use of cleaner production processes in which the quantity of raw materials used is reduced, less waste is generated, the use is rationalized of energy sources, etc., thus obtaining higher quotas for environmental well-being. It is important to mention that reverse logistics is not the same as green logistics, the latter tries to use the most organic or ecological inputs and materials in its processes, while reverse logistics minimizes the impact generated by its activities.
The role that companies play in the degradation of the planet is particularly relevant. The company is not only responsible for the proper management of by-products and waste generated in the exercise of its activities, but is also responsible for those products placed in the hands of the consumer and that have ceased to meet their needs: the so-called Products Out of Use (PFU).
These can incorporate added value capable of being recovered by the company and reintroduced into its cycle of operations, so that on the one hand an economic benefit is obtained by taking advantage of the value of the PFU and on the other, it contributes to improving the environmental conditions of our environment.
DEFINITIONS
Reverse logistics is the process of planning, implementation and control efficiently and at the optimal cost of the flow of raw materials, materials in the process of production and finished products, as well as related information, from the point of consumption to the point of origin in order to recover the value of the materials or ensure their correct disposal. (HAWKS, 2006)
Another definition of this word is the following: “reverse logistics is responsible for the recovery and recycling of packaging, packaging and hazardous waste; as well as the processes of return of excess inventory, customer returns, obsolete products and seasonal inventories. It is even advanced to the end of the product's life, in order to give it an exit in markets with higher turnover. (HORTAL, 2011)
HISTORY
Although environmental awareness began to manifest itself in the late 1950s and early 1960s, it was not until the 1970s that environmental deterioration and depletion of natural resources became evident. Thus, it is how they begin to look for forms of economic growth and development that avoid continuing with the processes of environmental deterioration. On the other hand, mechanisms are also sought that allow for the recovery and sanitation of the environment.
However, it was not until the 90s when the management of end-of-life products began to be analyzed in depth. In this decade, a series of works are carried out in which the problem of the scarcity of resources and raw materials is addressed, as well as the opportunities that the recovery and reuse of used products represent for the company and for society.
One of the first works is that of James Stock (1992) in which the logistical processes concerning the return of products from the consumer to the producer, recycling, reuse of materials and components, waste disposal and operations are analyzed. restoration, refrabrication and repair. In this work, the concept of Reverse Logistics begins to be used. (MESERÓN, 2007)
RETURN LOGISTICS MODEL
Client ==> Company of origin ==> Recycling and disposal of parts ==> Start of a new production cycle
Customer: consumer of the item in question. The responsibility for returning the item rests with it once the useful life has expired.
Origin Company: origin supplier of the product itself. The company is committed to environmentally friendly waste management. The company is in charge of providing «client-supplier» transport services, as well as offering discounts on its range of products for renovation, in order to make it attractive to the public
Recycling and disposal of parts: The company shows its facet of commitment to caring for the environment by taking responsibility for recycling and handling waste that is harmful to nature. But also, recycling parts can be a great opportunity to optimize inventories. This is achieved through the rescue of useful parts that can be used in a remanufacturing process.
Start of a new production cycle: recyclable parts are treated and used in new production processes (creation of other products). (ATOM, 2013)
Diagram of a Production Cycle
REASONS FOR RECOVERY OF OUT-OF-USE PRODUCTS (PFU)
Legal reasons: The pressures made by social groups in demand of greater respect for the environment have caused public administrations to demand a set of good environmental practices.
Economic reasons: Most companies look for added value and a business opportunity in the execution of their activities.
These business reasons can also be analyzed from two points of view:
Demand point of view: The use of PFUs can be used as an instrument of good image and ecological marketing.
Supply point of view: The utilization of the PFU would suppose the substitution of the raw materials and original components by these recovered articles, which could generate a decrease in the manufacturing costs and in the sale price.
ACTIVITIES OF INVERSE LOGISTICS
- Return to origins Destruction Withdrawal of merchandise Classification of merchandise Reconditioning of products Administrative processes Recovery, recycling of packaging and hazardous waste
RECOMMENDATIONS FOR THE CREATION OF A CLEAR RETURN SYSTEM.
Start from the end: Design your systems first, taking reverse logistics as the top priority. It doesn't matter how attractive your website is; There must be a clear return policy.
Prepare a clear presentation: We cannot pretend to sell, for example, clothing on the Internet, and realize that we are asked for several sizes in order to see later which one suits them, and return the rest using the return system. The best way to maintain a low level of returns is to ensure good quality both in the images and in the information provided to the client (sizes, colors, size equivalency tables…)
Impulsive purchase usually ends in impulsive return: With the use of new technologies such as «One Click» (process by which the client, through the web, places an order with a single click of the mouse), this makes it too easy to buy a product Impulsively, and this may create "remorse" on the part of the customer, causing the order to return upon receipt. To avoid this, it is advisable to include an order cancellation option available for at least one hour after purchase.
Tell the customer what to do: It is necessary to package the order and give clear instructions on how to return a purchase, orders must always be accompanied with detailed instructions on this matter.
Informs, informs and informs: The probability of returns will increase the more time passes from the moment of purchase to the receipt of the order by the customer. It must be provided with an online tracking of the package, also keep customers informed of possible delays in the delivery of their order.
It implements self-configuration tools: the Internet allows you to configure products online, thus reducing returns. It offers customers the possibility to configure their products, packages, offers… This will greatly reduce the possibility of returns. Dell Computers reports that those customers who configured their PCs online returned much fewer orders than those visited by traditional offline vendors.
Includes online tools: Some transport companies (UPS, TNT…) have free online tools that you can integrate into your page and greatly facilitate order returns. When a customer requests a return, the system will provide the customer with a return label that will print from their local printer and paste on the package to be returned.
Take advantage of your off-line warehouse: If your company has a physical warehouse in addition to the website, it offers the possibility for the customer to make their return at one of the stores or physical centers. Apart from the comfort that is offered to the client, the product will be close for incorporation back into the process. (GAYTAN, 2012)
MANAGEMENT ELEMENTS IN REVERSE LOGISTICS
There are ten key elements for proper management in reverse logistics:
- Inbound Filtering: This is to control the defective merchandise or that did not meet the return requirements.Time Cycles: Returns are always exceptional processes, making it very difficult to reduce the time cycles related to decisions regarding accepting a returned order. It is about defining a good decision-making mechanism, that is, what to do with each possible return (resale, repair, elimination). Also here would be the decision on how to reward company personnel who manage to shorten this time cycle as much as possible.Reverse logistics information systems: Since there is no software specially designed for this purpose, a customized system can be developed, or the implementation and modification of one that is already owned.This system should be flexible to handle the enormous variety of different cases that can occur in returns, and complex enough to work well across the possibly numerous departments of the company. Reverse logistics software must gather meaningful information to aid in monitoring.
This program must include information regarding the reasons for each return, among which are:
- Repair / Service Factory repair: Returned to the supplier for repair. Seller error when shipping. Customer error when ordering. Entry error. Error in the order processing system Shipping error. Wrong Material Shipped Incomplete Shipping Wrong Quantity Duplicate Shipment Duplicate Customer Order Not Customer Order Component or Part Missing Damaged Not Working Damaged Shipping In this case, the company will be claimed. of transport.
- Centralized return centers: Return centers are facilities dedicated to handling returns quickly and efficiently. Products will be ordered, processed and shipped to their respective destinations. These centers have been used for some years, but lately they have been increased for the following reasons: - Increase in benefits is achieved. - The returns process is greatly improved. - Staff are trained and trained in this regard. - Inventory levels are reduced. - Customer satisfaction logic. «ZERO» returns: In a traditional ZERO return program, the supplier informs its customers that returns will NOT be accepted. Instead, the supplier can provide the customer with a discount on the general order invoice, and then,Depending on the supplier, the client will either destroy the product or freely dispose of it in another way. Repair and reform. There are four categories. Repair, reform, partial use and recycling. The first two involve conditioning and / or updating the returned product. The partial used is based on the strict recovery of only those elements or parts that are still functional. Recovery of goods. It is the ordering and disposition of the returned products, that is, surplus, expired, obsolete, undone, etc. Done in a way that increases profits and lowers costs. The goal is to recover economic and ecological value as possible, in turn by reducing the final amounts of waste. You can rebuild, resell, recycle, repackage, or destroy these returned products.The decision will establish the design of your processing facility, the type of training for your employees and the specific procedures regarding the handling of the returned products. In traditional logistics, prices are set by brand managers or marketing specialists. In the reverse process, "haggling" can be generated, where the value of the returned product will be negotiated without the use of previous guides on pricing. These negotiations tend to be "flexible." Financial management: The huge number of accounting problems associated with a return involve costs. Merchandise that is returned to the supplier due to surplus stock or because it has not been sold. It is returned through the normal reverse logistics channel. So far everything is going well. However,the accounting system, for example, will automatically establish a discounted price on these products, since they come through the return channel, and are assumed to be out of date, damaged, defective… There are adequate programs that can directly support these accounting activities, collecting and supplying the necessary information. «Out sourcing». Outsourcing firms perform reverse logistics processes more efficiently and better, and they enable the company to direct its efforts in selling more and better. (UNAM, 2015)collecting and supplying the necessary information. «Out sourcing». Outsourcing firms perform reverse logistics processes more efficiently and better, and they enable the company to direct its efforts in selling more and better. (UNAM, 2015)collecting and supplying the necessary information. «Out sourcing». Outsourcing firms perform reverse logistics processes more efficiently and better, and they enable the company to direct its efforts in selling more and better. (UNAM, 2015)
REVERSE LOGISTICS PROBLEMS
Some problems have to do with the development of the reverse logistics system, this model must include all aspects for its optimal performance and sometimes inconveniences arise in terms of the following aspects:
- The type of product in question, in terms of its technology and ease of recovery. The recovery option (recycling, remanufacturing or reuse) that will be applied to the returned product. The objective of the Reverse Logistics System. The dimension of the company and its business objectives. The structure of the distribution channel.
Another problem that arises in reverse logistics systems is the uncertainty associated with the recovery processes of the PFU, both from the point of view of the quantity of products recovered, and from the point of view of their quality, in relation to the time of recovery or due to the place of recovery of the PFU. (LEVY, 2013)
BUSINESS
There are some companies that have implemented the reverse logistics model in their companies, an example of which is described below.
It is in Europe where the greatest development of reverse logistics has occurred and arose as a result of the concern about the increase in electronic waste and the need to return defective products in the 1980s, which is why they created the norm on waste electrical and electronic equipment Waste of Electrical and Electronic Equipment.
The countries belonging to the European Union, in 2005, established a collection plan for this type of waste and determined that the manufacturers would be responsible for financing the collection and treatment of the same.
In the United States, this practice spread from the 1990s.
In Mexico, the electronic sector is the one that has opted for reverse logistics, this sector has redoubled efforts in the use of materials and products that can be reused to give added value to its operations, that is, take advantage of what has already at some point been You can consider it as waste or its useful life has ended.
Transnational companies such as IBM and Hewlett Packard (HP) have also dabbled in this area, which manufactures and markets computer-related tools, programs, and services.
IBM has a presence in more than 160 countries around the world and has had billions of operating cost savings over the past four years, as it has long implemented actions in its supply chain. Since 1990, it has had a product recovery management program in several European countries and, in addition, it has a new line of computers made from cheaply recovered components, called ETN.
BET ON RECYCLING
In the case of HP, this company makes it easier for customers to replace products and dispose of them with mechanisms that minimize the impact on the environment. In the presentation called: HP's 'green' supply chain, a practical model of reverse logistics, the company realizes that, for more than 20 years, it has started recycling in more than 50 countries.
HP wants and accepts the return of all the cartridges it sells. No original HP cartridge, recovered through the HP Plant Partners system, has been disposed of in public landfills or landfills.
The company takes advantage of the materials used as raw materials for the production process - the closed-loop value chain concept - of which HP is a pioneer.
Like IBM, HP works on product design to improve product performance, minimizing energy consumption and making the most of raw materials. Recently, in Los Angeles, USA -in introducing new workstation models, to a group of clients including entrepreneurs from the automotive and film industries- Jim Zafarana, vice president and general manager of HP's Workstations division, emphasized in that these teams "include power sources with 85% efficiency, in order to reduce energy consumption, in general, and the amount of residual heat emitted into the environment".
THE REMANUFACTURE
Another company that follows the line of reuse and remanufacturing of products, even if they are not of the brand it manufactures, is ABB, a leader in technologies, electrification and automation, which has an Engineering and Manufacturing campus in San Luis Potosí, where five divisions operate.
In two of them, Robotics and Service, a process similar to reverse logistics is developed, since through the remanufacturing of robots the customer is given the option so that he can extend the useful life of the device for another four or five years and With this, you have the guarantee of optimal maintenance in your plant, avoiding production stoppages that cause millions of losses.
With this after-sales agreement that is made with the consumer, they are offered exchange, replacement or purchase advantages, in turn, treatment is given to the parts of the robots that are recyclable and also to the oil, which contributes to the care of the environment.
ABB has a contract with a company that is in charge of the disposal and handling of materials such as metals, wood, cardboard, plastics, etc. With this, environmental regulations are complied with, but, in addition, an economic benefit is obtained, whose profits are enough to pay for environmental services.
Swedish and Swiss capital ABB Mexico has the capacity to annually deliver 400 remanufactured robots. Sectors such as automotive, food, pharmaceutical, among others, are on the list of clients who use these services.
In the Service division, where there are medium and low voltage power switches, as well as boards and cells, the concept of the robotics part is managed, since the parts are recovered for recycling. (ORTIZ, 2009)
CONCLUSION
Reverse logistics is a new tool that supposes a reduction of adverse effects related to the activities of organizations, this concept has gained ground in recent years and also serves as a way to mitigate environmental damage, contributes to represent for the An organization has a competitive advantage by showing itself to its customers as a socially responsible organization, which means that people feel identified and buy more of its brand.
BIBLIOGRAPHY
- ATOM. (2013). BLOGSPOT. Obtained from http://logisticaprede.blogspot.mx/2013/05/logisticainversa.htmlGAYTAN, J. 2012). EMPHASIS. Obtained from http://www.en emphasis.com/Presentaciones/LS/2012/Talleres/Gaytan.pdfHAWKS, K. (2006). Reverse Logistics Magazine. Retrieved from http://rlmagazine.com/edition01p12.phpHORTAL, M. (2011). MATRA. Obtained from http://www.interempresas.net/Logistica/Articulos/50133-La-logistica-inversa-que-esy-para-que-sirve.htmlLEVY, D. (03 of 2013). SLIDESHARE. Obtained from http://es.slideshare.net/scourge/logisticainversa-17191095MESERÓN, S. (2007). BLOGSPOT. Obtained from http://evoluciondelalogistica.blogspot.mx/2007/12/resumen-de-la-historia-delogstica.htmlORTIZ, S. (2009). CNN. Obtained from http://www.cnnexpansion.com/manufactura/2009/05/06/logistica-inversa-al-revesno-es-igualUNAM. (2015). UNAM. Obtained from http: //www.ingenieria.unam.mx / industrial / downloads / documents / chair / loginver.pdf
