Logistics: Challenges And Approaches For Reverse Logistics
• Allocating special budget for Reverse logistics.
• Including Reverse logistics as a Key Result area in Job responsibilities.
• Including Reverse logistics in training of employees.
• Dedicating special areas for Return material storage.
• Giving Reverse logistics same priority as forward logistics.
• Including Reverse logistics performance in employee appraisals.
• Nominating special transportation for returns.
• Collaborating between supply chain members for Reverse logistics.
• Maintaining appropriate costing data for returns.
• Dedicated software for reverse logistics. • Including Reverse logistics in MIS reports.
• Using data from failure analysis and product returns …show more content…
4) The Actors involved (members of the forward flow channel or specialized parties). Reverse logistics by its nature is complex and obviously a number of challenges needs to be countered. Some of the challenges are addressed by Ronald S Tibben- Lemke and Dale S Rogers.35 They have explained the same in their article. It is generally found that closer the point of origin of the Reverse Logistics activity to the end user the larger the challenge for the supply chain. Some of the challenges as given by Ronald S Tibben-Lemke and Dale Rogers are given below:
1. Forecasting for returns is difficult due to nature of uncertainty as it initiates from customers. Rates of returns are unpredictable.
2. Transportation routes are from many points to one point as the collection been done from multiple points and flow moving towards a single or few destinations.
3. The quality of the returned products and their packaging is not uniform as the magnitude of damages differ from case to case. The identification and handling is also a big challenge.
4. The final destination or the reverse routes to be followed are not clear due to the wide range of …show more content…
The speed of returns processing and its importance in the supply chain is not controlled as it is dependent on many variables.
8. Costs of handling and transportation of the reverse flows are higher as compared to regular forward flows as they are less structured and not uniform. The visibility of various costs is difficult to capture due to the complex nature of the reverse flow.
9. Difficult to manage the inventory of returns and follow the regular inventory management principles for returned goods.
10. The product life cycle which determines the product attractiveness and its corresponding value is more complex for the returns.
11. Negotiation is not straightforward due to reasons of non-uniform quality. It becomes complicated and is effected by concern of the vendor about the secondary market.
12. The returned products have to face marketing difficulties as prices are significantly lower than that of new products. Also the customers cannot be assured of a consistent supply of these type of products which are having high variety.
13. The entire reverse movements process is having lower visibility. The reason been that due to the lower priority of RL for the firms the Information System required for increasing the efficiency and effectiveness mostly are not made