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Understand why reverse flows in the supply chain were traditionally regarded as being unimportant to the financial success of companies. Appreciate why global supply chains present special challenges for reverse flows. Discuss the reasons for some of the early reverse logistics systems and closed loop supply chains. Understand why there has been a significant increase in the volume of items moving in reverse in supply chains today and list the eight major categories of reverse flows. Appreciate the difference between reverse logistics systems and closed loop supply chains and understand their respective characteristics. Understand the three major forces that drive reverse logistics systems and describe their differences and similarities. Discuss the differences between value streams and waste streams for reverse flows.
Introduction
Traditionally, reverse flows were not viewed as adding value for customers or revenue for the manufacturer or producer. Information and financials (cash) are also an important dimension of reverse logistics and closed loop supply chains. Global supply chains present challenges and opportunities for reverse flows Including green laws.
Reserve logistics involves the processes for sending new or used products back up stream for repair, reuse, refurbishing, resale, recycling, or scrap/salvage.
Closed loop supply chainsDesigned and managed to explicitly consider both forward and reverse flows activities in a supply chain.
Customer Returns
A variety of reasons for customer returns can be given (as indicated previously) including defective or unwanted items, warranty problems, recalls, and miss-shipments. Recycling and environmental concerns are frequently viewed simultaneously because of their association with regulatory policy at the local, state, and/or federal level. Value has become an important for businesses and even some nonprofit organizations.
Environmental Challenges
Economic Value
Priority relative to other issues and potential projects or programs in the organization Inattention or lack of buy-in from top level management in the organization Financial resources necessary for operations and asset infrastructure Personnel resources required to develop and implement the reverse flows program Adequacy of material and information systems to support the returns program Local, state, and federal restrictions and/or regulations
Summary
Forward flows in the supply chain have traditionally received the most attention, and reverse flows have often been ignored or mismanaged. Effective supply chain and logistics management requires that reverse flows be accorded careful attention as important elements of a supply chain. Good management of reverse flows can reduce costs, enhance sales, and positively affect the profit margin of a company. Globalization of business and the associated more complex supply chains have added new challenges for proper reverse flows management. The scope and magnitude of flows has increased dramatically because of customer service policies, catalog and Internet sales, and environmental policies.
Summary (cont.)
The scope and magnitude of flows has increased dramatically because of customer service policies, catalog and Internet sales, and environmental policies. Reverse logistics systems and closed loop supply chains are similar concepts, but they have distinctive characteristics and procedures. The major forces affecting the volume of goods being handled in the reverse flows processes of organizations are customer returns, environmental policies, and issues and economic benefits for organizations. Proactive management of reverse flows can lead to the creation of a value stream as opposed to a waste stream. When designing a returns flow program, consideration needs to be given to the various types of returns with the development of procedures and processes for each one. Forward flow costs are usually well defined, making tradeoffs easier to analyze. Care needs to be given to developing realistic costs for reverse flows in order to analyze tradeoffs.