From the beginning of the business activity, the concept of the commercialization of goods and services in relation to its processes, had always been in a single direction and in a single sense, which consisted of focusing the resources and efforts that should go from the supplier to the customer, that is, from its manufacture, its packaging and distribution, until its consumption when it reaches the customer's hands.
Years later, and as a motive for capturing a wider market, a monitoring of the effect produced by the product is started, with the intention of generating feedback and future improvements. However, the broadest monitoring that most companies reach is to investigate the degree of satisfaction that the product generated in the consumer, but they completely ignore the final destination of these when they end their useful life, ignoring the responsibility of what what will happen to the product after its use by the consumer.
Some companies argue that investing resources in reusing their products generates higher costs that customers would not be willing to pay, therefore, once their useful life is over, they are incinerated or transferred to the landfill, generating serious damage to the environment. ambient.
For certain types of companies, the importance of business activity lies in offering a rapid response to their markets, maintaining optimal supply lines that allow the achievement of this objective and the only possible view is the possibility of global expansion for the company. improvement of this activity.
Later, aspects such as after-sales service and the establishment of links with the customer began to be taken into account. Taking responsibility for a sale already made has become a form of added value that makes any product more attractive to the consumer's perception. One form of after-sales service are the well-known returns: items that were not considered by customers as worthy of the investment they made and which are almost never considered as a factor that affects the customer-company relationship.
Due to this problem, this article will address an issue that offers the possibility of recovering and economically taking advantage of those products that no longer meet consumer needs; This recovery generates a flow of materials and products from the consumer to the producer, which, in contrast to the traditional producer-consumer logistics flow, is called Reverse Logistics or Reverse Logistics Function.
DEFINITION OF REVERSE LOGISTICS
The concept of reverse logistics was coined by E. Luttwak in 1971, and outlined the process of retrieving products from their customers through after-sales service. Traditionally, the main concern of companies was to get the product or material from the manufacturer to the customer.
Growing concern for the environment has brought the recycling process to fame. Environmental awareness and concern for the welfare and conservation of natural resources seem, at times, to cause greater dissatisfaction in consumers than their own disagreements. In any case, what is appreciated are a few of the many manifestations of a type of material flow that has been called Reverse Logistics.
The Council of Logistics Management defines the concept of Reverse Logistics as "Process of planning, implementation and control, in an efficient way, of the flow of raw materials, materials in process of manufacture and finished products, as well as the information related from from the point of origin to the point of consumption, in order to meet the needs of customers ”.
In this way, all the activities that Logistics alone comprises are included in Reverse Logistics. The difference is that these activities are carried out in the opposite direction.
For Sergio Rubio (2003), Reverse Logistics is “The process of planning, development and efficient control of the flow of materials, products and information from the point of consumption to the place of origin, so that the needs of the consumer are met, recovering the waste obtained and managing it so that its reintroduction into the supply chain is possible, obtaining added value and / or achieving an adequate disposal of it ”.
According to Rogers, Tibben-Lembke, (1998) “It is the process of efficiently planning, implementing and controlling the flow of raw materials, inventory in progress, finished products and the information related to them, from the point of consumption to the point of origin with the purpose of recapturing them, creating value for them, or discarding them ”.
MAIN OBJECTIVES PURSUED BY REVERSE LOGISTICS
Logistics has primarily two objectives: to be more environmentally efficient through recycling, the reuse of products, the reduction of raw materials used and the economic recovery of end-of-life products. Considering the last objective, the recovery of value can be done through two perspectives:
- Demand: the recovery of out-of-use products and their reintroduction into the supply chain can become a commercial instrument for the manufacturer to enhance its image in the market, presenting itself to consumers as an environmentally aware company that manufactures products that respect the environment, reducing the emission of waste and pollution levels On offer: the recovery of materials and products out of use means substituting raw materials and original components for these recovered items, which reduces the costs of their manufacture and your selling price.
IMPORTANCE OF REVERSE LOGISTICS
Reverse logistics is a new topic, given the growing concern for the environment and if it is considered that this concept involves recycling and reuse of end-of-life products, as well as reduction of raw materials in manufacturing processes.
Reverse logistics is becoming increasingly important in organizations due to the following factors:
- The pressure of environmental legislation that has been approved in several countries The increasingly short life cycle of products The demand of society for green production. The professionalization of recycling.
In addition to the above factors, reverse logistics establishes an important bond with the customer, creating in him a feeling of satisfaction and loyalty, sometimes higher than when the consumer had a direct relationship with the producer.
BENEFITS OF REVERSE LOGISTICS
Some of the potential advantages or benefits of implementing a Reverse Logistics program according to Daugherty are:
- Reduction of the "surprise" or uncertainty in the arrival of Out of Use Products (PFU). Reuse of some materials. Possibility of the company to cover other markets. Greater confidence in the client when making the purchase decision. Considerable improvement of the image of the company before consumers Obtaining feedback information about the product Reduction of environmental impact Reduction of losses due to returns.
MAIN DIFFICULTIES
- Previous studies are required for the establishment of policies on the matter. It is not a simple manipulation of the product. All company departments are related to the reverse logistics activities that it is intended to establish. The inputs into a reverse logistics process are “unpredictable”. Inspections must be carried out on each product individually and thoroughly. The new (reverse) chain includes a number of non-existent processes in direct logistics. It must be decided whether the company carries out the different activities with its own resources or whether Instead, it will require the services of a specialized carrier. Returns in small quantities tend to represent higher costs when integrated into the system.
In any case, the positive and the negative of a Reverse Logistics program implemented in a company will depend on its nature and the way it is applied, so the factors mentioned above may easily not apply to all cases.
PARADIGMS OF COMPANIES
In general, medium and large companies that have a greater possibility of applying Reverse Logistics extensively, have the following beliefs on the subject:
- That it is not a factor to achieve competitive advantage That the responsibility of the manufacturer ends when the customer purchases the products That rework times are longer than in traditional logistics That returns cannot provide benefits in terms of potential costs and profits.
Supposing that a company decides to establish a system of this type, given the benefits it would provide, as defined above, it is worth asking what would be the way to carry it out and what tools would it have for it.
TOOLS FOR DECISION-MAKING
The use of mathematical models in reverse logistics poses difficulties for their use. In addition to the mathematical conflicts that traditional logistics solutions have, in reverse logistics there are uncertainties such as the following:
- Quantitative uncertainty: regarding the quantity of end-of-life products Qualitative uncertainty: regarding the quality of end-of-life products. Temporal uncertainty: regarding the moment of recovery Spatial or location uncertainty: regarding the place of recovery.
To establish a reverse logistics system, important decisions must be made in each part of the process and consider the advantages or benefits that some options have over others. The main tools used are:
Source: Iniestra, JG (March 8, 2012). Reverse Logistics a second business opportunity. Retrieved on February 18, 2017, from
THIERRY METHOD
Martijn Thierry, proposes five options to obtain value from end-of-life products:
- Repair: The aim is to get the used product back into working order, although its quality is generally lower than that of new ones. Examples: household appliances, and electrical and electronic appliances Restoration: involves returning the used product to specific quality levels (generally lower than the original ones) and thus extending its useful life. Examples of this recall option are found in the civil and military aviation industry Remanufacturing: This option provides the used product with quality standards as rigorous as the originals, thus achieving lower manufacturing costs. Examples of this option are copiers, household appliances, and disposable cameras.Only a small part of the reusable components is recovered, which will be used for repair, restoration and remanufacturing options. Examples: electronic components, integrated circuits, precious metals, among others. Recycling: consists of recovering the manufacturing material of the out-of-use product to use it in making new ones. It is the best known and most widely applied option: glass, paper, cardboard, cans, among others.paper, cardboard, cans, among others.paper, cardboard, cans, among others.
METHODOLOGY FOR THE ESTABLISHMENT OF REVERSE LOGISTICS
Due to the heterogeneity of companies that exist in relation to the line of business and the technology they use in their processes, it becomes difficult to establish a homogeneous and ideal methodology for all of them. However, in general terms, it is certain that all of them must go through the following stages for the establishment of Reverse Logistics.
- Recognition of the Situation. In the first instance, the Reverse Logistics process begins with an acknowledgment of the situation; phase in which the fact that you are about to receive a product from a customer, be it internal or external, becomes official. Reverse Distribution. A recovery or reverse distribution of the item in question is then carried out, physically transferring it to a place where the company can dispose of it without implying that any action is taken with respect to them. Once you have the item, you can proceed to review it, and thus make the appropriate decision about what to do with it. In this phase it is necessary to consider the factors: Classification. To reduce the number of destinations of the merchandise. Consolidation.Regarding the products to find the best destination.
Among the decision options you can find:
- Remanufacturing. From the combination of its components, especially in series and by mechanical means. Renovation. To be put back on the market.Reuse. With the purpose of giving it its own use or as a complement to another product. Raw material for its use. Elimination. Under environmental terms to disintegrate it. Reengineering. Analysis and redesign of economy and fundamental reconception. Product Design. Reverse Logistics activities should start from the product design stage. “Resource reduction” should be the essential objective of any program that seeks to effectively operate Reverse Logistics activities. The second option to be considered is the reuse of the items in question, followed, in their order, by recycling, without these being mutually exclusive.or with respect to other options Reuse. As a last choice, the disposal of the product should be considered, from which some benefit can still be obtained; for example, those of which it is possible to recover some forms of energy. The benefits that can be obtained from a good that comes from the hands of the client are not only material, other aspects that must be taken into account include information, relationship with the client and, consequently, the creation of a relationship of trust.The benefits that can be obtained from a good that comes from the hands of the client are not only material, other aspects that must be taken into account include information, relationship with the client and, consequently, the creation of a relationship of trust.The benefits that can be obtained from a good that comes from the hands of the client are not only material, other aspects that must be taken into account include information, relationship with the client and, consequently, the creation of a relationship of trust.
KEPNER TREGOE METHOD
The Kepner Tregoe method of decision making is a structured methodology for obtaining, prioritizing and evaluating information. It was developed by Charles H. Kepner and Benjamin B. Tregoe in the 1960s. Also known as the Kepner Tregoe matrix or competitive profile matrix.
So the idea is not to find a perfect solution but rather the best possible option, based in fact, on achieving the result with the least negative consequences. It is marketed as a way of making unbiased decisions, in which it is said to limit conscious and unconscious biases that divert attention away from the results.
There are four basic steps when using the Kepner Tregoe method to make decisions:
- Situation Analysis: used to clarify the situation, outline a general line of the issue and choose a direction Problem Analysis: is where problems are defined and their causes are determined Decision Analysis: alternatives are identified and analyzed the risk of each. Analysis of potential problems: the best of the alternatives is scrutinized against potential problems and negative consequences, and actions are proposed to minimize the risk.
To choose the corresponding analysis, the following methodology should be followed:
- Prepare a statement about the decision: include not only the desired result but also the required action. Define: strategic requirements, "I must have", operational objectives, "I want to have", constraints "limits on the system." List of objectives and relative value assignment
- List of alternatives: generate as many potential routes of action as possible, whether or not they are feasible at first. Score each alternative: first, any alternative that does not fit with the "must haves" must be eliminated, each alternative must be considered. a versus "desire" on a scale of 1 to 10. Then the goal value is multiplied by the satisfaction score to get the value score. This is then repeated for each alternative.
- Two or three higher alternatives are chosen: to consider potential problems and negative effects of each Consideration of each alternative against all negative effects: comparing alternatives against adverse effects, scoring for probability and importance.
- Analyze the value score: against the classification of the adversity of each one and the highest score is chosen. The winning option is considered against each negative consequence and an action plan is suggested to minimize the adverse effects.
REVERSE LOGISTICS IN E-COMMERCE
E-commerce-oriented reverse logistics is a booming concept, especially as a result of the advances made in recent years in the field of information and communication technologies. The development of social networks and the Internet has led to the emergence of very concrete and specific logistics needs, along with the new and almost unlimited business opportunities, which companies in the sector must face as quickly, effectively and efficiently as possible.
Reverse logistics is a key and fundamental aspect for e-commerce activities supported by new technologies, and which seek to improve the level of customer satisfaction while positively increasing its reputation in the market.
In our days, there are two types of reverse logistics for electronic commerce and according to the purpose for which they fulfill:
- Returns logistics, in charge of managing returns from the distribution point to the product's center of origin. Waste logistics, which includes the recovery, recycling or pertinent treatment of waste.
Among the great challenges faced by return logistics, such as forecasting, are the reduction of costs and times: increasingly, consumers understand that returns must be free (with the costs borne by the company), and thus it is reflected in a good part of the already existing offer; in addition, there is also an increasing need for immediacy when it comes to product changes.
SUCCESSFUL CASES IN THE APPLICATION OF REVERSE LOGISTICS
- Manufacturers collect used products directly from customers. Xerox Corp., provides postage prepaid packaging to return your cartridges without costing customers a penny. This saves the company between 40% to 65% of its manufacturing costs by reusing parts and materials. (Ginsburg 2001) Manufacturers of consumer goods such as disposable cameras and cell phones use points of sale to collect their products. For example, Eastman Kodak Co. receives disposable cameras from department stores; On average it is estimated that 76% of the total weight of a disposable camera is used in the production of a new one. In the automotive industry independent third parties are responsible for the collection of used products to send them to the original manufacturers (OEMs).
CONCLUSION
Undoubtedly, the customer is the most important, this is the most influential factor when trying to establish policies that affect the relationship between them and the company or their interaction with the product. As a result of the above, Reverse Logistics becomes vitally important in its study and application for each of the parties that intervene during the process that ranges from the manufacture of the product to its consumption.
Reverse logistics is a necessity and an opportunity to increase the quantity and quality of recycled material. In this article, the benefits that can be achieved were detailed, these being not only environmental, but also economically quantifiable.
In turn, reverse logistics allows companies to maintain a closer relationship with distributors and customers, favors brand image by reducing environmental impact by reducing waste, while reducing industrial packaging costs by allowing reuse.
Reverse Logistics activities serve as a support tool for one of the most important terms nowadays "competitiveness" of organizations, because its implementation allows to reinforce the ties between them and the client, making the latter feel important to the provider. Reverse logistics implies a good service in every sense of the word, that is, it takes into account all the possibilities of contact with the client, makes it feel that they are meeting their requirements and, therefore, that the company remains in a good position in the market.
BIBLIOGRAPHY
- Bautista, JC (January 25, 2015). Make decisions with confidence. Retrieved February 18, 2017, from: https://www.decision-making-confidence.com/tomar-decisiones.html Córdoba, JJ (August 6, 2014). Recovery and use of waste. Retrieved on February 17, 2017, from https://red.uao.edu.co/bitstream/10614/6983/4/T05024.pdfIniestra, JG (March 8, 2012). Reverse Logistics a second business opportunity. Retrieved on February 18, 2017, from http://www.endamientos.com/Presentaciones/LS/2012/Talleres/Gaytan.pdf Lacoba, SR (May 05, 2003). Library.unex.es. Retrieved February 17, 2017, from http://biblioteca.unex.es/tesis/8477236135.PDF Martijin Thierry, MS (1995). Strategic issues in product recovery management. California Management, 114. Porter, M. (2001). Competitive advantage:Creation and sustenance of a superior performance. Mexico City: Homeland.
GRATITUDE
Sincere gratitude to the Technological Institute of Orizaba, for becoming and continuing to reign as the parent home of our professional training. To the Division of Graduate Studies and Research (DEPI), for encouraging us to search for a better future. To the National Council of Science and Technology (Conacyt) for the support and backing it gives us. Finally and in a special way, to Dr. Fernando Aguirre y Hernández, a pioneer in the construction of a different vision and results.
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