Reverse Logistics Magazine – Reverse Logistics: Customer Satisfaction, Environment Key to Success in the 21st Century
- Damaged merchandise
- Seasonal inventory
- Restock
- Salvage
- Recalls
- Recycling
- Hazardous material
- Obsolete equipment disposition
- Asset recovery
Reverse Logistics Executive Council
One major challenge for logistics providers is performing all tasks for the retailer, including:
- Collection
- Scanning
- Credit store and invoice vendor
- Product disposition
Reverse Side Of Logistics: The Business Of Returns – Forbes.com
Reverse Logistics services
|
| Repair Depot |
Refurbishing / Testing / Screening |
Recycling |
| Resellers/brokers – B-Channel |
IT Management Software |
Help Desk / Call Center Support |
| 3PL (3rd Party Logistics) |
Fulfillment & Kitting |
Warehousing |
| End of Life Management |
Field Service |
Spare Parts Management |
| Warranty Management |
Replacement Management |
Asset Management |
| Destruction Certification |
SLA Service Lifecycle Agreement |
Reverse Logistics Wiki : Reverse Logistics Lexicon
Is Six Sigma Worth It?
By Natalie Rhode, Johnson, Fain & Rhode, LLC
Almost everyone has heard the buzz about “Six Sigma”… it’s something that many large corporations are implementing and by all accounts, it is saving them millions, if not billions, of dollars. You may have even done some research to learn what Six Sigma is about and realize that it requires:
- Program Structure,
- Organization Culture,
- Formal Problem Solving,
- Statistical Experts,
- Key Metrics &
- Program Effectiveness.
Certainly, it is impossible to embark on a journey to Six Sigma without an investment.
The real key, however, is determining whether that investment has the opportunity to improve your business’s financial performance. Two key measures that can provide this answer are your business’s overall Sigma Level Performance and the associated estimation of your Cost of Poor Quality. We have developed a tool which calculates these measures based on industry data and three (3) significant data points from you…
1) Number of Opportunities for Defects,
2) Number of Defects and
3) Annual Sales.
It really is that simple to quickly estimate the potential impact a Six Sigma Program can have on your business results.
Key Reverse Logistics Management Elements
• Gate keeping
• Compacting Disposition Cycle Time
• Reverse Logistics Information Systems
• Central Return Centers
• Zero Returns
• Remanufacture and Refurbishment
• Asset Recovery
• Negotiation
• Financial Management
• Outsourcing
Process Improvement
In attempting to improve reverse logistics processes, a firm can move along several fronts. Suggested improvements are listed in the table:
- Streamline turn-in procedures
- Route items with an eye to what happens to them next
- Integrate the forward and reverse pipelines
- Explore the potential of commercial software applications or techniques for improving reverse flow management
- Align financial incentives with improvements
Key functions in the system include:
• Forecasting
• Planning
• Inventory Control, Tracking and Delivery
• Field Resupply
• Reverse and Forward Logistics
• Depot Repair
Logistics Support Management Systems Functions and General Specifications
The required computerized field service logistics management systems (FSLMS) technology needs to be organized in terms of the following major functions or modules:
Logistics Management and Control (LOG)
including parts order entry and order processing, inventory tracking and control, physical distribution and courier resupplies and (as an option), depot repair/rehabilitation scheduling and control.
Financial Control and Accounting (FCA)
including billing and invoicing to insure full revenues for logistic services rendered, including warranty, extended warranty, and service contract administration, and financial control of the revenue and cost components of service logistics operations.
Logistics Database Management and Reporting (DBMR)
this function must include standard and ad hoc reporting, with 4GL capabilities, using a relational or networked database.
Special Logistics Document & Configuration Control System
to support need for drawings and configuration documents from the field. This may be satisfied by a corporate wide system or make use of in Computed Aided Logistics Support (CALS) type technology.
Contract Life Cycle Management (CLCM).
This function provides visibility of the complete span of customer relationships from the prospect and proposal stage though quotation to active service contract. The facility includes, in addition, configuration management and revision tracking.
Logistics Management and Control (LMC).
The functionality required in the FSMS system should provide basic logistics management and support of the total inventory. The support should include techniques for managing and controlling the complete field inventory and spare parts “pipeline,” including central and regional depots, down to the field customer service engineer level,
and trunk stock, and at field sites, and the return cycle to a central repair depot, to include the following:
Inventory Tracking and Control (ITC)
of the full logistics pipeline (from central warehouse to the field customer service engineer level) and/or field site level to keep track of in-transit inventory, returned parts and equipment, borrowing control, repair/rehab stock control. Data should be reported and tracked for effective and defective parts status, by stock keeping unit (SKU).
Order Entry and Processing (OEP)
to include on-line entry of orders, order pricing, order tracking and updating, allocation of inventory, automatic back ordering as required, generation of picking documents, shipping papers and transportation documents (shipment optimization, way bills, and freight manifests), and recording/capturing data for later billing and
invoicing of the customer.
Part Management Agreements (PMA)
to include parts on customer site or in special stocking locations, monitor used parts and their replenishment, revision compatibility with customer equipment.
Equipment Configuration Maintenance (ECM)
to keep track of the installed base of equipment and networks being serviced and supported, the manufacturer of the equipment in the case of third party maintenance, and
any relocations of equipment and networks in the field. Wherever applies the function will monitor the revision of the equipment installed and software used and be updated whenever they are revised.
Inventory Forecasting and Planning (IFP)
for all inventory stocking points, to better plan and forecast inventory and to optimize total inventory levels within the logistics pipeline.
Depot Rework/Refurb Operations Control (DRROC)
to schedule, track, and process material through the repair rework facility.
Inventory Replenishment (IR)
to include generation of material requisitions to the next higher inventory stocking level. Identification of primary and secondary sources of supply for spare parts and consumables, generation of purchase orders to vendors or replenishment order to manufacturing facilities, quality control processing and receipt processing to update
inventory.
Physical Distribution (PD)
to include management control, dispatch, tracking of physical delivery of parts to sites via courier, or dedicated mobile van. This function must link at a general level to the manufacturing systems and technology in order to automatically order proprietary product spares as required to maintain the service inventory at optimum levels,
and report on product quality as delivered (i.e., DOA in field, and product MTBF and MTTR).
Financial Support
including billing and invoicing. The key required basic functions include financial accounting and control, and profit and loss analysis to include the following:
Cost Allocation
of direct and indirect logistics service expenses to accurately reflect the profitability of the logistics service organization by service portfolio as a whole, and by major element, by customer segments and for major customer accounts, service area, service technician/mechanic, or other criteria.
Customer Credit Checking
to validate the customer’s credit status for time and material and contract service calls.
Profit Contribution Analysis
to determine profitability for the service organization and by portfolio segment, specific types of service call, service area, service technician/mechanic, customer, type of equipment being maintained, maintenance contract or any combination of the above. This function must be able to link to the corporate financial system, and
administration systems, if required.
Logistics Database Management and Reporting
The service logistics management system should also include an integrated database management system, including a comprehensive structured database to provide timely, accurate, and flexible information for reporting to all levels of the field service management and service organization structure basic reports to be generated by
the system.
Logistics & Technical Document Storage and Retrieval
This function should include the capability to store and retrieve documents, and images, and other graphics and should be compatible and/or linked to the Corporate Engineering support document retrieval system.
Logistics Planning & Forecasting Functions
This functionality should include the full capability for planning and forecasting at both the strategic and tactical level.
Depot Repair Systems
The required computerized depot repair service management systems technology should be organized into the following. Key functions, include:
Repair Entry Processing (RFP)
including front-end screening for no trouble found units; repair entry, routing, tracking and control, identify repair item, assign work order/control number, route by type of repair/type of unit
Depot Service Planning and Scheduling (SPS)
including the management requirements for doing simple and complex depot repair and refurbishment tasks such as contract repair management, system
integration, reverse engineering, etc.
Leveraging Technology in Reverse Logistics
Reverse Logistics face many challenges, such as:
Poor systems
ERP, financial, CRM, Warehouse and logistics systems that were designed to move product in a forward supply chain through manufacturing to the end customers. Little or no thought has been devoted in these systems to handling the returns, especially in a mid or high volume environment.
Communication
effectively handling a returned unit through the full reverse supply chain cycle involves many more people than were required through forward logistics. Communication or processing maybe required by the customer, Customer Service, Receiving, Shipping, Finance, repair or refurbishment, inventory managers, sales (for the refurbished goods). This communication is further complicated since one or more of these processes may be outsourced.
Many Systems
often many systems, spreadsheets and manual lists are utilized to process the returned unit. Often difficult and time consuming processes and reconciliations are required to keep these systems running smoothly.
Few resources
lack of financial, Information Technology (IT) or people resources.
Little Direction
few organizations have allocated management or executive level resources and time to the area of Reverse Logistics.
Formal Processes
“First we define and document the processes we will use to process our client’s returns. Then we configure our technology to meet their needs”. The formal processes ensure everyone understands what will be done and then we use technology to monitor our progress.
Visibility
You should be able to follow a returned item through it full processing life cycle. If a customer calls with query about the status of a serial numbered item, “I can
provide them with an instant answer without leaving my desk”. Partner visibility is also essential. “Our clients have access to our system to answer their own inquiries, perform analysis or prepare their plans and forecasts.”
Integrated Systems
our ability to exchange a lot of data with our clients ERP system, enables us both the streamline our processes. For instance, when we receive a unit for one of their Return Authorizations (RMA or RA), our system automatically notifies their ERP system so it can begin credit processing for that customer’s RMA.
Accurate Data
Reverse Logistics processes are data intensive. “We capture data at every step in the process.” This ensures a well documented audit trail should any questions or difficulties arise. Accurate, verifiable data is required to present to the different groups who are impacted by the returns. For instance Product Development needs to be certain the product failure data is accurate before they are willing to implement a manufacturing change.
Using technology to improve your Reverse Logistics is likely one of the best opportunities to reduce costs and increase profits for your company. A lot of success has been demonstrated in the forward supply chain. It is now time to take a closer look at your Reverse Supply chain.
2004
Seeking Excellence Within the Four Walls of the Warehouse
Going Backwards: Reverse Logistics Trends and Practices University of Nevada, Reno
Center for Logistics Management. Dr. Dale S. Rogers, Dr. Ronald S. Tibben-Lembke ©
1998, Reverse Logistics Executive Council
University of Nevada Logistics Council (UNLC) This UNR student organization assists logistics
students with career planning, resume development, and industry relations.
UNR Center for Logistics Management The mission of the Center for Logistics Management at
the University of Nevada is to create and disseminate new knowledge in business logistics and
related areas, educate students and practitioners in logistics excellence, and to contribute to the
effective practice of logistics management.
International Journal of Logistics Management (IJLM) Provides a global forum for the exchange of
new ideas and practices in the dynamic field of logistics management and the emerging area of
supply chain management.
The Council of Logistics Management (CLM) The mission of the Council of Logistics
Management is to serve the evolving logistics profession by developing, advancing, and
disseminating logistics knowledge.
The Educational Society for Resource Management APICS is a not-for-profit international
educational organization respected throughout the world for its education and professional
certification programs.
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