SCDigest Editorial Staff

SCDigest Says:

As the report notes, many, if not most, companies do not pay greater attention to reverse logistics issues because they don’t well understand the true costs or potential benefits from improvement. What do you say? Send us your comments here

Many commentators and industry professionals have been promoting for years that it is time most companies paid greater attention to reverse logistics processes. For the most part, however, reverse logistics has occupied a very low place on the logistics priority list.

That is starting to change, driven in part by the connection between reverse logistics and green supply chain initiatives, growing regulation regarding disposal of hazardous materials and other areas that impact reverse logistics processes, and recognition by companies that there are, in fact, significant dollars to be saved by greater attention to reverse logistics issues. (See Logistics in Reverse Gear; also view our on-demand videocast Building an ROI for Reverse Logistics).

Two industry organizations – APQC and WERC - have recently partnered to do an in-depth analysis of reverse logistics best practices, published in a new report titled Reverse Logistics: Backward Practices that Matter. The research was performed by analysis of two 3PLs specializing in reverse logistics, as well as the reverse logistics practices of McKesson and Raytheon.

The full report must be purchased, but an executive summary listing of the 12 best practices is available for free from the APQC web site (see Reverse Logistics Best Practices Executive Summary).

The 12 best practices identified are as follows:

Reverse Logistics Strategy:

• Raise the awareness of the importance of reverse logistics to a high level in the organization.
• Gain senior management support for reverse logistics efforts and build cross-functional teams.
• Design detailed codes that can be used to track the reason for each individual return and use to eliminate the underlying root causes.
• Develop a detailed disposition strategy for returned goods.

Build Clear Reverse Logistics Physical and Information Flows

• Accurately assess the true cost of returns and reverse logistics.
• Assign someone clear, ultimate responsibility for returns and reverse logistics policy.
• Develop educational and collaborative process with supply chain partners.

Enable Process and Operating Systems

• Ensure returns information is visible and traceable throughout the channel.
• Work with partners to develop joint reverse logistics processes and returns management initiatives.
• Focus on holistic processes to eliminate the silos that plague reverse logistics chains.

Craft Measurement Systems to Drive Results and Continuous Improvement

• Develop rigorous, targeted and visible reverse logistics measures.
• Institute a continuous improvement mindset.

As the report notes, many, if not most, companies do not pay greater attention to reverse logistics issues because they don’t well understand the true costs or potential benefits from improvement.

Why don’t we pay more attention to reverse logistics issues. Will green supply chain initiatives and regulation finally drive more attention? Is there usually a strong ROI? Let us know your thoughts at the Feedback button below.