Description
The PPT explains reverse logistics in detail.
Submitted by:
Reverse Logistics – the least used differentiator
RODNEY MOORE
‘Is the process of moving goods from their typical final destination to another point, for the purpose of capturing value otherwise unavailable, or for proper disposal of products’ - Reverse Logistics executive council • Is a “closed loop” approach to supply chain that includes product returns, recalls, replacement parts for refurbishment, as well as reuse or sale as raw material • Is NOT running the outbound operations in reverse
Benefits / Importance of reverse logistics Cost perspective
?100 billion US$ worth products returned in US
?6% of total products
? 15 % of mass merchandise
?35% of catalogue and e-commerce
Benefits continued… Company perspective
?Opportunity for revenue generation and differentiate market position ? ‘Branding Implications’ – products not sold in secondary markets. ? Establishing customer loyalties, increase in market share and ‘retaining customers’ ?Green image
Key incentives for reverse logistics
?Customer retention/satisfaction
?Recycling programs
?Damaged material returns
?Asset recovery/restock
?Downstream excess inventory (Seasonality)
?Hazardous material programs
?Obsolete equipment disposition
?Recalls
How to develop a Reverse Logistics Strategy
CURT BARRY
EXAMPLES
?Toshiba has tied up with UPS for repair processes and reduced turnaround time for customers to 4 days and less. ?The Smartlabel program from Newgistics allows customers to drop off returns at any USPS location. ?The new consolidated returns service from FedEx allows customers to drop off returns at any FedEx location. ?USPS’ recently launched parcel return services program.
Difficulties / Issues in Reverse Logistics
?Lack of awareness of costs associated with R L. ?Lack of defined processes and system support ?Sales and customer service personnel not trained/ encouraged for R L . ?Company policies and employee incentives can act as impediments. ?Paper work , poor work flow, multiple entities-customer, manufacturer, reseller and disposer.
Possible options for reclaimed products
?Refurbish (Improve product beyond original ) ?Recondition (Return product to original ) ?Salvage (Separate components for reuse) ?Repair (Prepare for sale as a used product) ?Sell to 3rd Party ?Recycle ?Discard/Liquidation (Landfill)
End-of-Life product recovery & Reverse Logistics
NEIL FERGUSON and JIM BROWNE
• Manufacturing Organizations exploring options to take back or recover products • Emergence of a material flow from end users back to the producers • Focus on end of life or unwanted products originating from end users
Contd...
• Reverse Distribution Network
A group of businesses that take ownership of products or facilitate exchange during the recovery process from the last user to final buyer in the secondary market
4 Major Reverse Chain Actors:
F O R W A R D
1. Retailers
R E V E R S E 2. Secondary Commodities Dealer
COMBINATION
3. Manufacturer controlled Recycling Centers
4. Resource Recovery Center
Integration of forward and reverse channels is a major issue in reverse distribution channels
Case Study: Development of Information Systems to support recycling of End of Life Vehicles
FORWARD DISTRIBUTION CHANNEL REVERSE DISTRIBUTION CHANNEL
PART REMANUFACTURER
AUTOMOTIVE MANUFACTURERS
USERS DISMANTLER
PART USER
MATERIAL RECYCLER
DISTRIBUTORS
HAZARDOUS MATERIAL RECYCLER
1. Requirement to reduce the amount of non-metallic materials going to the metal recycler by the dismantler 2. Requirement of greater links with producers and other players in the forward distribution channel and new emerging markets for plastics, rubbers, and glass 3. Development of an effective Information System to manage the returns process while tracking costs
Information Classification for Reverse Distribution System
- Component Location &
Identification, Disassembly Methods - Static in Nature - BMW codes each recyclable part used, to make recycling easier when a vehicle’s life ends
- Specific Location and
Quantity of the Product - Used in Collection Activity and planning and control of recycling activity - Retailers and users main providers of this information
- Service life, amount of usage etc. - Required to assess the quality of the product and its potential value - Dynamic Information available from end user or retailer - Used in sorting & collection activities by manufacturers
Information Classification for Reverse Distribution System
- EU
issued a proposed Directive on ELVs, requiring compulsory recycling of certain materials and minimum recycling levels for ELVs
- Timely and accurate
- Generated within the
access to information concerning product demand, price, and availability
- Should be presented to the recycler before the sorting activity occurs
dismantling process - Storage Information: availability, quality and price stock with the recycler - Sales Information: quality, quantity and price of products sold during a definite interval of time
Decisions taken for recycling of ELVs
1. Accept or Reject the ELV? 2. Which parts/materials have to be removed? 3. Which parts can be removed for resale?
Reject
4. Where are removed parts stored?
5. Is part available for sale? 6. Price of Requested Parts?
7. Where are ELVs stored?
8. When to sell material for recycling?
Decision Support System (DSS)
• The DSS divides the ELV into subsections. Each subsection recommends the list of parts, which are to be removed • The pre-treatment subsection lists the parts and materials, which the dismantler is legally required to remove from the ELV
• Such a web-based system allows a much greater level of communication both within the reverse distribution channel and between the dismantler and the forward distribution channel
RFID solution in RFID in Logistics –Logistics Reverse Reverse CASE STUDY
It has helped business to reduce : • Cost • Fine tune Inventory Management • Fortify theft detection • Achieve new velocity with real time visibility into business process across supply chain Case Study • Background • Current tracking and management system a. Manual b. Time consuming c. Requires several resource
RFID Goals and Business Goal
RFID Goals • On-hand inventory location tracking • Shipping order accuracy • Employee accountability (includes time/date) • Possible space management at the DC and workflow improvements • Scalable to all DCs Business Goals • Streamline the reverse logistic operations. • Scintel to help implement and manage technologies initiatives. • Collaboration with other firms to optimise operational performance.
Solution
• • • • Installing RFID tags at discreet point Tagging a pallet Reading the tag as it moved through the RFID portal Reading the pallet tag with the RFID reader then reading the RFID bin tag to associate the pallet to the bin • Regular inventory conducted for every activity within a bin.
Benefits / Challenges
Benefits Reduce Labor cost Boost to the bottom line Reduce shrinkage Accurate tracking Improved visibility Challenges Not a simple plug-and-play technology Understanding the change management aspects of implementing RFID solution. Deployment of RFID and sharing of information between retailer and suppliers.
• • • • •
• • •
The Six Hidden Costs of Reverse Logistics
LEE NORMAN AND WARREN SUMNER
• Untapped source of value of reverse logistics can be turned into additional revenue gains or cost reductions. • “Hidden” costs of reverse logistics across the organization, and no single responsibility of functional groups for managing those costs. • Companies have discovered a nontraditional but relatively easy way to move dollars to the bottom line, by automating the reverse logistics process.
The Six Hidden Costs of Reverse Logistics
LEE NORMAN AND WARREN SUMNER
1. Hidden Labor Costs
– – – – – – – Customer Relations Customer Service Finance Sales Traffic and shipping Receiving and Warehousing Asset Management
2. 3. 4. 5. 6.
Grey Market Items Lack of visibility Inability to forecast accurately Credit reconciliation Poor response time and brand toxicity
Reducing Hidden Costs by Automating the Reverse Logistics Process
? Ship a product with a pre-printed return label ? Call centers ? Automate the reverse logistics with a web interface that demanded an RMA (Return Merchandise Authorization) and compliant label before any return
• Saves 35-50% over a live call center
? Set up an entirely web-based RMA system that linked directly to your ERP
• Save 50-80% over pre-printed return labels
? Automate front-end RMA approval and label processes, as well as rulebased receiving, disposition and settlement
? Set up a web-based RMA system, link it to ERP, and train the customers to respect and adhere to the rigorous returns process, as enforced by web services
Simulation of design and analysis of a container Reverse- Logistic System
YUAN-TING CHENG AND TAHO YANG
Environmental Legislation
• RL activities will soon be an obligation and not just an option • Over the last years, new environmental laws have introduced the producer responsibility • The “producer” of goods that produce waste takes responsibility for those waste, rather than expecting society to pay for waste collection and disposal • Usage of Packaging containers influenced by environmental factor and transport issues • Costs and issues requiring strategic business decision must be considered before switching to returnable containers
Associated Problems and Costs
• • • • Requirement of lifetime maintenance Cleaned before reusing Repair or replace damaged containers Space to be maintained by the company implementing use of reusable container • Labor and Equipment incurred in moving and storing the containers Case Study – Toyota Automobile Company • Business Problem Decisions taken for the determination of appropriate shipping containers for the delivery of parts and material from the supplier
Alternatives
Alternative 1 • Use of expendable corrugated containers • One week used container gathered and shipped to recycler • Salvage value of the recycled material is $65/ tonne • Value of losses due to product damage is $600 per occurrence. Alternative -2 • Materials disposed instead of recycled • Landfill cost $62/ tonne Alternative 3 • Suppliers Purchase reusable plastic containers • Containers returned after each use at TMMI • Average life of the container is three years • Losses due to product damage will be $400 per occurrence
The comparisons of the results of each alternative with Run Length – 255 days
Alternative 1 Labor cost $1,752,700 Alternative 2 $1,752,700 $467,750 $954,700 $23,252,000 $26,428,000 Alternative 3 $1,752,700 $26,825,000 $699,210 $3,463,900 $32,741,000
Container cost $372,360 Transportation $963,450 cost Damage cost $23,252,000 Total cost $26,341,000
Summary of simulation results with run length of 765 days
Alternative 1 Labor cost $5,258,200 Alternative 2 $5,258,200 $1,404,900 $2,864,500 $70,744,000 $80,271,000 Alternative 3 $5,258,200 $26,825,000 $2,097,600 $10,392,000 $44,573,000
Container cost $1,114,800 Transportation $2,891,100 cost Damage cost $70,744,000 Total cost $80,008,000
Reverse Logistics – Turning “Green” to Gold.
KEVIN STEELE AND EMILY RODRIGUEZ
• Post-sales service is a critical differentiator and the means for customer retention • Reverse Logistics enhances the capabilities for managing and disposing returned products
• Objectives of Improvement
1. 2. Response Time – Driven by Customer Demand Cost Reduction – Driven by Internal Demand
• Consumers are looking for suppliers which are good environment citizens but they are not willing to pay high premiums • ‘Green’ Supply Chain Initiatives would establish the importance of RL in an organisation to educate employees, suppliers and customers to support environment friendly products and design
Areas of Opportunity
1. Returns Prevention & Warranty/Repair Policies 2. Logistics
• Reduce NTF (No Trouble Found) returns • Reduction in wasteful activity is also a reduction in cost
• Centralized v/s localized handling and repair • Early validation to prevent fraudulent return while still reducing cost and improving a company’s total carbon footprint • Reduce turnaround time (TAT) at the lowest cost while maintaining an acceptable quality level • Days of on hand inventory
3. Repair Operations
4. Recycling and Reuse 5. Product Design for Environment and Service
• Recycling at the correct point allows reclamation of base metals and other components
• Revere Logistics to participate in design process and factually demonstrate the impact on their operation
Steps to be taken by Reverse Logistics function
• Reverse Logistics staff have had to build expertise and capabilities as per business needs • Areas to be covered by RL
1. 2. 3. 4. 5. 6. 7. Spare part manufacturing, waste, energy use and emissions Safe and sustainable raw materials Manufacturing waste, energy use and emissions Environmentally safe packaging, energy use and emissions Shipment energy use and emissions Storage waste energy use and emissions Shipping, energy and emissions
Outsourcing in Reverse Logistics
JANUSZ GRABARA
There are two forms of outsourcing: • External (isolation)
• economically independent and outside (in legal terms) service provider
• Internal (separation) – strategic outsourcing
• independent, but capital-bound, service provider
Outsourcing in Reverse Logistics
JANUSZ GRABARA
Main factors for outsourcing include:
• the costs related to logistics activity are clearer, mainly through easiness of their recording • cost reduction is possible through selection of most competitive offer in the market, which enable more flexible use of the owned resources, • leveling of internal problems which make performance of tasks difficult.
Outsourcing in Reverse Logistics
JANUSZ GRABARA
• The arguments against implementation of outsourcing include: – probability of being dependent on service provider, – risk of deterioration in quality of own products (e.g. improperly transported), – necessity of exact calculations in terms of costs, especially in the aspect of cost reduction, – lack of possibility to use experience in logistics obtained during operation in the market.
Outsourcing in Reverse Logistics
JANUSZ GRABARA
• The companies who decide to subcontract logistics activities outside focus more on coordination of operation with service provider. • They can organize their logistics system and form structures so that it functions more efficiently within the chain.
• Coordination should be performed in a way that enables formation of an efficient structure adapted to the needs, so that the achievement of the predefined goal of logistically managed organization is possible
Outsourcing in Reverse Logistics
JANUSZ GRABARA
Reduction of costs connected with logistics is justified in case when it leads to increase in profits Advantages: • Elongated deadline for payments. Increase in current assets through more profitable form of liabilities. • Resources of enormous value are saved – warehouses, distribution centers, local storage areas. • The logistics companies show higher flexibility in terms of warehousing facilities and fleet. Opportunity to achieve time compression. • Fact of savings, which appears as a result of liquidation of the transport/warehousing departments. Reduction in costs not connected with core activities in the company
Group’s Point of View
Cost Benefit
Competitive Advantage
QUESTIONS
doc_363396523.pptx
The PPT explains reverse logistics in detail.
Submitted by:
Reverse Logistics – the least used differentiator
RODNEY MOORE
‘Is the process of moving goods from their typical final destination to another point, for the purpose of capturing value otherwise unavailable, or for proper disposal of products’ - Reverse Logistics executive council • Is a “closed loop” approach to supply chain that includes product returns, recalls, replacement parts for refurbishment, as well as reuse or sale as raw material • Is NOT running the outbound operations in reverse
Benefits / Importance of reverse logistics Cost perspective
?100 billion US$ worth products returned in US
?6% of total products
? 15 % of mass merchandise
?35% of catalogue and e-commerce
Benefits continued… Company perspective
?Opportunity for revenue generation and differentiate market position ? ‘Branding Implications’ – products not sold in secondary markets. ? Establishing customer loyalties, increase in market share and ‘retaining customers’ ?Green image
Key incentives for reverse logistics
?Customer retention/satisfaction
?Recycling programs
?Damaged material returns
?Asset recovery/restock
?Downstream excess inventory (Seasonality)
?Hazardous material programs
?Obsolete equipment disposition
?Recalls
How to develop a Reverse Logistics Strategy
CURT BARRY
EXAMPLES
?Toshiba has tied up with UPS for repair processes and reduced turnaround time for customers to 4 days and less. ?The Smartlabel program from Newgistics allows customers to drop off returns at any USPS location. ?The new consolidated returns service from FedEx allows customers to drop off returns at any FedEx location. ?USPS’ recently launched parcel return services program.
Difficulties / Issues in Reverse Logistics
?Lack of awareness of costs associated with R L. ?Lack of defined processes and system support ?Sales and customer service personnel not trained/ encouraged for R L . ?Company policies and employee incentives can act as impediments. ?Paper work , poor work flow, multiple entities-customer, manufacturer, reseller and disposer.
Possible options for reclaimed products
?Refurbish (Improve product beyond original ) ?Recondition (Return product to original ) ?Salvage (Separate components for reuse) ?Repair (Prepare for sale as a used product) ?Sell to 3rd Party ?Recycle ?Discard/Liquidation (Landfill)
End-of-Life product recovery & Reverse Logistics
NEIL FERGUSON and JIM BROWNE
• Manufacturing Organizations exploring options to take back or recover products • Emergence of a material flow from end users back to the producers • Focus on end of life or unwanted products originating from end users
Contd...
• Reverse Distribution Network
A group of businesses that take ownership of products or facilitate exchange during the recovery process from the last user to final buyer in the secondary market
4 Major Reverse Chain Actors:
F O R W A R D
1. Retailers
R E V E R S E 2. Secondary Commodities Dealer
COMBINATION
3. Manufacturer controlled Recycling Centers
4. Resource Recovery Center
Integration of forward and reverse channels is a major issue in reverse distribution channels
Case Study: Development of Information Systems to support recycling of End of Life Vehicles
FORWARD DISTRIBUTION CHANNEL REVERSE DISTRIBUTION CHANNEL
PART REMANUFACTURER
AUTOMOTIVE MANUFACTURERS
USERS DISMANTLER
PART USER
MATERIAL RECYCLER
DISTRIBUTORS
HAZARDOUS MATERIAL RECYCLER
1. Requirement to reduce the amount of non-metallic materials going to the metal recycler by the dismantler 2. Requirement of greater links with producers and other players in the forward distribution channel and new emerging markets for plastics, rubbers, and glass 3. Development of an effective Information System to manage the returns process while tracking costs
Information Classification for Reverse Distribution System
- Component Location &
Identification, Disassembly Methods - Static in Nature - BMW codes each recyclable part used, to make recycling easier when a vehicle’s life ends
- Specific Location and
Quantity of the Product - Used in Collection Activity and planning and control of recycling activity - Retailers and users main providers of this information
- Service life, amount of usage etc. - Required to assess the quality of the product and its potential value - Dynamic Information available from end user or retailer - Used in sorting & collection activities by manufacturers
Information Classification for Reverse Distribution System
- EU
issued a proposed Directive on ELVs, requiring compulsory recycling of certain materials and minimum recycling levels for ELVs
- Timely and accurate
- Generated within the
access to information concerning product demand, price, and availability
- Should be presented to the recycler before the sorting activity occurs
dismantling process - Storage Information: availability, quality and price stock with the recycler - Sales Information: quality, quantity and price of products sold during a definite interval of time
Decisions taken for recycling of ELVs
1. Accept or Reject the ELV? 2. Which parts/materials have to be removed? 3. Which parts can be removed for resale?
Reject
4. Where are removed parts stored?
5. Is part available for sale? 6. Price of Requested Parts?
7. Where are ELVs stored?
8. When to sell material for recycling?
Decision Support System (DSS)
• The DSS divides the ELV into subsections. Each subsection recommends the list of parts, which are to be removed • The pre-treatment subsection lists the parts and materials, which the dismantler is legally required to remove from the ELV
• Such a web-based system allows a much greater level of communication both within the reverse distribution channel and between the dismantler and the forward distribution channel
RFID solution in RFID in Logistics –Logistics Reverse Reverse CASE STUDY
It has helped business to reduce : • Cost • Fine tune Inventory Management • Fortify theft detection • Achieve new velocity with real time visibility into business process across supply chain Case Study • Background • Current tracking and management system a. Manual b. Time consuming c. Requires several resource
RFID Goals and Business Goal
RFID Goals • On-hand inventory location tracking • Shipping order accuracy • Employee accountability (includes time/date) • Possible space management at the DC and workflow improvements • Scalable to all DCs Business Goals • Streamline the reverse logistic operations. • Scintel to help implement and manage technologies initiatives. • Collaboration with other firms to optimise operational performance.
Solution
• • • • Installing RFID tags at discreet point Tagging a pallet Reading the tag as it moved through the RFID portal Reading the pallet tag with the RFID reader then reading the RFID bin tag to associate the pallet to the bin • Regular inventory conducted for every activity within a bin.
Benefits / Challenges
Benefits Reduce Labor cost Boost to the bottom line Reduce shrinkage Accurate tracking Improved visibility Challenges Not a simple plug-and-play technology Understanding the change management aspects of implementing RFID solution. Deployment of RFID and sharing of information between retailer and suppliers.
• • • • •
• • •
The Six Hidden Costs of Reverse Logistics
LEE NORMAN AND WARREN SUMNER
• Untapped source of value of reverse logistics can be turned into additional revenue gains or cost reductions. • “Hidden” costs of reverse logistics across the organization, and no single responsibility of functional groups for managing those costs. • Companies have discovered a nontraditional but relatively easy way to move dollars to the bottom line, by automating the reverse logistics process.
The Six Hidden Costs of Reverse Logistics
LEE NORMAN AND WARREN SUMNER
1. Hidden Labor Costs
– – – – – – – Customer Relations Customer Service Finance Sales Traffic and shipping Receiving and Warehousing Asset Management
2. 3. 4. 5. 6.
Grey Market Items Lack of visibility Inability to forecast accurately Credit reconciliation Poor response time and brand toxicity
Reducing Hidden Costs by Automating the Reverse Logistics Process
? Ship a product with a pre-printed return label ? Call centers ? Automate the reverse logistics with a web interface that demanded an RMA (Return Merchandise Authorization) and compliant label before any return
• Saves 35-50% over a live call center
? Set up an entirely web-based RMA system that linked directly to your ERP
• Save 50-80% over pre-printed return labels
? Automate front-end RMA approval and label processes, as well as rulebased receiving, disposition and settlement
? Set up a web-based RMA system, link it to ERP, and train the customers to respect and adhere to the rigorous returns process, as enforced by web services
Simulation of design and analysis of a container Reverse- Logistic System
YUAN-TING CHENG AND TAHO YANG
Environmental Legislation
• RL activities will soon be an obligation and not just an option • Over the last years, new environmental laws have introduced the producer responsibility • The “producer” of goods that produce waste takes responsibility for those waste, rather than expecting society to pay for waste collection and disposal • Usage of Packaging containers influenced by environmental factor and transport issues • Costs and issues requiring strategic business decision must be considered before switching to returnable containers
Associated Problems and Costs
• • • • Requirement of lifetime maintenance Cleaned before reusing Repair or replace damaged containers Space to be maintained by the company implementing use of reusable container • Labor and Equipment incurred in moving and storing the containers Case Study – Toyota Automobile Company • Business Problem Decisions taken for the determination of appropriate shipping containers for the delivery of parts and material from the supplier
Alternatives
Alternative 1 • Use of expendable corrugated containers • One week used container gathered and shipped to recycler • Salvage value of the recycled material is $65/ tonne • Value of losses due to product damage is $600 per occurrence. Alternative -2 • Materials disposed instead of recycled • Landfill cost $62/ tonne Alternative 3 • Suppliers Purchase reusable plastic containers • Containers returned after each use at TMMI • Average life of the container is three years • Losses due to product damage will be $400 per occurrence
The comparisons of the results of each alternative with Run Length – 255 days
Alternative 1 Labor cost $1,752,700 Alternative 2 $1,752,700 $467,750 $954,700 $23,252,000 $26,428,000 Alternative 3 $1,752,700 $26,825,000 $699,210 $3,463,900 $32,741,000
Container cost $372,360 Transportation $963,450 cost Damage cost $23,252,000 Total cost $26,341,000
Summary of simulation results with run length of 765 days
Alternative 1 Labor cost $5,258,200 Alternative 2 $5,258,200 $1,404,900 $2,864,500 $70,744,000 $80,271,000 Alternative 3 $5,258,200 $26,825,000 $2,097,600 $10,392,000 $44,573,000
Container cost $1,114,800 Transportation $2,891,100 cost Damage cost $70,744,000 Total cost $80,008,000
Reverse Logistics – Turning “Green” to Gold.
KEVIN STEELE AND EMILY RODRIGUEZ
• Post-sales service is a critical differentiator and the means for customer retention • Reverse Logistics enhances the capabilities for managing and disposing returned products
• Objectives of Improvement
1. 2. Response Time – Driven by Customer Demand Cost Reduction – Driven by Internal Demand
• Consumers are looking for suppliers which are good environment citizens but they are not willing to pay high premiums • ‘Green’ Supply Chain Initiatives would establish the importance of RL in an organisation to educate employees, suppliers and customers to support environment friendly products and design
Areas of Opportunity
1. Returns Prevention & Warranty/Repair Policies 2. Logistics
• Reduce NTF (No Trouble Found) returns • Reduction in wasteful activity is also a reduction in cost
• Centralized v/s localized handling and repair • Early validation to prevent fraudulent return while still reducing cost and improving a company’s total carbon footprint • Reduce turnaround time (TAT) at the lowest cost while maintaining an acceptable quality level • Days of on hand inventory
3. Repair Operations
4. Recycling and Reuse 5. Product Design for Environment and Service
• Recycling at the correct point allows reclamation of base metals and other components
• Revere Logistics to participate in design process and factually demonstrate the impact on their operation
Steps to be taken by Reverse Logistics function
• Reverse Logistics staff have had to build expertise and capabilities as per business needs • Areas to be covered by RL
1. 2. 3. 4. 5. 6. 7. Spare part manufacturing, waste, energy use and emissions Safe and sustainable raw materials Manufacturing waste, energy use and emissions Environmentally safe packaging, energy use and emissions Shipment energy use and emissions Storage waste energy use and emissions Shipping, energy and emissions
Outsourcing in Reverse Logistics
JANUSZ GRABARA
There are two forms of outsourcing: • External (isolation)
• economically independent and outside (in legal terms) service provider
• Internal (separation) – strategic outsourcing
• independent, but capital-bound, service provider
Outsourcing in Reverse Logistics
JANUSZ GRABARA
Main factors for outsourcing include:
• the costs related to logistics activity are clearer, mainly through easiness of their recording • cost reduction is possible through selection of most competitive offer in the market, which enable more flexible use of the owned resources, • leveling of internal problems which make performance of tasks difficult.
Outsourcing in Reverse Logistics
JANUSZ GRABARA
• The arguments against implementation of outsourcing include: – probability of being dependent on service provider, – risk of deterioration in quality of own products (e.g. improperly transported), – necessity of exact calculations in terms of costs, especially in the aspect of cost reduction, – lack of possibility to use experience in logistics obtained during operation in the market.
Outsourcing in Reverse Logistics
JANUSZ GRABARA
• The companies who decide to subcontract logistics activities outside focus more on coordination of operation with service provider. • They can organize their logistics system and form structures so that it functions more efficiently within the chain.
• Coordination should be performed in a way that enables formation of an efficient structure adapted to the needs, so that the achievement of the predefined goal of logistically managed organization is possible
Outsourcing in Reverse Logistics
JANUSZ GRABARA
Reduction of costs connected with logistics is justified in case when it leads to increase in profits Advantages: • Elongated deadline for payments. Increase in current assets through more profitable form of liabilities. • Resources of enormous value are saved – warehouses, distribution centers, local storage areas. • The logistics companies show higher flexibility in terms of warehousing facilities and fleet. Opportunity to achieve time compression. • Fact of savings, which appears as a result of liquidation of the transport/warehousing departments. Reduction in costs not connected with core activities in the company
Group’s Point of View
Cost Benefit
Competitive Advantage
QUESTIONS
doc_363396523.pptx