INTRODUCTION:
It is common for companies to fix their management concepts from supplier to customer, most have a tendency to ignore the final destination of their products when they end their useful life. However, the current lifestyle and the consumption habits of society cause the generation of a lot of waste and the management of this in an integral part of the economy. However, the problems arising from waste demand activities that minimize the damage to the environment produced by some production and industrial processes.
This is exactly where reverse logistics comes in as a new business culture that takes into account strategies, designs and production processes, aspects such as the consumption of energy and raw materials, the amount and type of materials used, the emission of polluting substances or the residuous generation. Reverse logistics encompasses all aspects from the consumer to the manufacturer in the return process to subsequently proceed to the reuse or destruction of a good
DEFINITION OF LOGISTICS:
"Process of projecting, implementing and controlling a flow of raw materials, inventory in process, finished products and related information from the point of origin to the point of consumption in an efficient and economical way possible in order to meet the requirements of the end customer. " (UNAM)
"Logistics is defined as the 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 related information from the point of origin to the point consumption, in order to meet the needs of customers "(López Parada)
DEFINITION OF REVERSE LOGISTICS:
Reverse logistics is also called reverse distribution, retro-logistics, or recovery and recycling logistics.
Basically it is the same as logistics, but in reverse; that is, it is the process of projecting, implementing and controlling a flow of raw materials, inventory in process, finished products and related information from the point of consumption to the point of origin in an efficient and most economical way possible with the purpose of recover its value or that of the return itself.
“Reverse logistics is responsible for the recovery and recycling of containers, packaging and hazardous waste; as well as the processes of return of excess inventory, customer returns, obsolete products and seasonal inventories. It even anticipates the end of the product's life, in order to give it an outlet in markets with higher turnover. " (Domínguez & Arena)
“Reverse logistics is an important sector of activity within logistics, which encompasses a multitude of activities. Some of these activities have purely ecological connotations, such as the recovery and recycling of products, thus avoiding a deterioration of the environment. Others seek improvements in the production and supply processes, as well as greater benefits. " (Oltra Badenes)
VECTORS FOR THE PROMOTION OF REVERSE LOGISTICS:
- Cost benefit considerations: recovery of value in containers, packaging, packaging and handling units and recyclables, better products with a lower production cost.
- Legal requirements: derived from considerations for the costs of waste processing, derived from the protection of health and the environment.
- Social responsibility: it is promoted by non-governmental organizations and by customer associations seeking safer and more environmentally friendly products. You do not lose money since you have a position in a "Premium" segment that likes to consume in a "correct" way.
REASONS FOR THE USE OF REVERSE LOGISTICS:
- Obsolete Products Defective Products Seasonal Inventories Return of Excess Inventory Returned Product
WHAT DOES REVERSE LOGISTICS COVER?
- Cash and carriers Customers End customer Supermarkets Hypermarkets
KEY ELEMENTS FOR GOOD REVERSE LOGISTICS;
- Inbound filteringReturn cycle timelineInformation systemsCentralized returns centersNon-return contractsReturn authorizationRepair RecyclingFlexibilityBalance and donationReverse FinanceOutsourcing
REVERSE LOGISTICS CLASSIFICATION:
- Networks for recycling: These are usually simple, low-link and centralized structures. These networks are characterized by their efficient management, a high volume of recovered products. The high utilization rates of these networks are determined by the high transformation costs.
- Networks for the re-manufacture of products: “Its main objective is the recovery of parts and components of products with high added value. In these systems, the original manufacturers usually play a very important role, sometimes being solely responsible for the design and management of the reverse logistics system. The design of the network responds to a multilevel typology, of a decentralized nature, for which synergies with the direct channel are usually sought. " (Rubio Lacoba, 2003)
- Reusable product networks: in this network, recovered products are reintroduced into the supply chain after cleaning and maintenance, they are decentralized structures in which original and reused products circulate and in which the most significant cost is the cost of transport.
Networks Reusable Products
PROCESSES IN REVERSE LOGISTICS:
Reverse Logistics Processes
- The purpose is to assess leftover material reuse activities, preferably use recycled materials, choose containers, handling units, packaging, packaging and reusable and recyclable containers through product engineering activities and retraining of human resources, thus promoting a culture of " return".
- In this step, technological innovations are sought for the use of recycled materials, clear recycling policies are developed respecting product standards and financing is carried out for studies to reduce the use of virgin raw materials.
- The substitution of materials is sought, mainly heavier ones for lighter ones with equal or greater performance.
- The waste rate in the use of materials should be evaluated since waste management is a non-negligible cost.
REVERSE LOGISTICS ACTIVITIES:
- Removal of merchandiseClassification of merchandiseReconditioning of productsReturn to originsDestructionAdministrative processesRecovery of containers, packaging and hazardous waste Recycling of containers, packaging and hazardous waste.
REVERSE LOGISTICS MANAGEMENT ELEMENTS:
- Inbound filtering: having a control of merchandise, both defective and those that do not meet the return requirements.
- Time cycles: a good decision-making mechanism must be defined in order to know what will be done with each possible return and how to reward company personnel who manage to shorten this time cycle as much as possible.
- Reverse logistics information systems: Since there is no special software for this purpose, one must either develop one or modify one that is possessed in the most appropriate way. However, the system must be very flexible in order to handle a huge variety of different possible return cases. It must also be complex enough to be used in various departments of the company.
- Centralized Return Centers (CDC) - These are places that are dedicated to handling returns efficiently and quickly. In this place the products are ordered, processed and shipped to their destinations. CDC has multiple benefits such as a great improvement in the returns process, awareness and training of staff in this regard, increased profits, customer satisfaction and reduced inventory levels.
- "ZERO" returns: it is a program where the supplier specifies to its customers that it will not accept returns and that instead the customer will receive a discount.
- Repair, reform, partial use and recycling: Repair and reform involve a conditioning and / or updating of the returned product. The partial use is based on a recovery only of the functional elements.
- Recovery of assets: it seeks to recover as much economic and ecological value as possible while reducing the final amounts of waste. All this is done by classifying and disposing of the returned products, whether surplus, expired, obsolete, waste, etc.
- Negotiation: Here we have a haggling phase; that is to say; that the value of the returned product be negotiated using previous guidelines on pricing.
- Financial address: a return involves a lot of hassle. There are adequate programs that provide direct support to accounting activities, collecting and supplying the necessary information.
- Out Sourcing: You can contract the reverse process outside; However, all responsibility should not be left to these firms since the success of reverse logistics is proportional to the level of control that one has over it.
REVERSE LOGISTICS STRATEGY:
- Define the priorities: in this step, the reason for the implementation of the reverse logistics program should be analyzed, if there is a need to implement it and what are the reasons for doing so.
- Define the resources to implement: here you must analyze how much time you are willing to use, what amount of the budget, what human resources for the reverse logistics program, what will be the acceptable benefits on the investment, who will direct and supervise the process, etc.
- Define how the communication with customers will be: when a call for return occurs, it must be established, who will attend the customer, if a call center will be established, if an external service will be hired to answer calls, if scripts will be defined, etc..
ADVANTAGES OF REVERSE LOGISTICS
(Meza González & Amaya Mier, 2006) :
- Increase in customer confidence to make the purchase decision Reuse of some materials Feedback of product information Decrease in uncertainty in the arrival of defective products The company has the possibility of entering other markets Improvement of the company's image
DISADVANTAGES OF REVERSE LOGISTICS:
- To establish decision policies on the subject, prior studies are required. Inspections must be done individually and thoroughly on each product. Reverse logistics involves all departments of the company. Returns in small quantities tend to represent higher costs when integrated into the system. Tickets are unpredictable
DIFFERENCES BETWEEN DIRECT LOGISTICS AND REVERSE LOGISTICS:
Differences between Reverse and Direct Logistics
CONCLUSIONS:
Sometimes you have to backtrack in order to move forward, and companies must focus on all interactions with the consumer and develop a relationship with the consumer as it is the only way to serve them properly.
Reverse logistics is a recent topic and few companies use it because many are unaware of the concept, however, reverse logistics is of great help to preserve the environment as materials are recycled.
However, reverse logistics is an enormous support to increase the competitiveness of organizations.
Bibliography
- Domínguez, A., & Arena, R. (nd). Council of Supply Chain Management Professionals Round Table Mexico. Retrieved on MARCH 7, 2016, from http: //www.cscmpmexico.com.mx López Parada, J. (sf). Incorporation of Reverse Logistics in the Supply Chain and its influence on the organizational structure of companies. 31-89. Barcelona: University of Barcelona, Meza González, J., & Amaya Mier, R. (JULY 12, 2006). Reverse logistics: a tool to support the competitiveness of organizations. Reverse logistics: a tool to support the competitiveness of organizations. Engineering and Development.Oltra Badenes, R. (sf). Reverse logistics: Concept and definition. VALENCIA: UNIVESITAT POLITECNICA DE VALENCIA. Rubio Lacoba, S. (2003). The reverse logistics system in the company: analysis and applications.University of Extremadura.UNAM. (sf). FACULTY OF ENGINEERING. Retrieved on MARCH 07, 2016, from the FACULTAD DE INGENIERÍA: http://www.ingenieria.unam.mx/industriales/descargas/documentos/catedra/loginver.p df
