In: Operations Management
(31) What do you understand by the term “Reverse Logistics”? Explain 2 ways in which the management of reverse logistics differ from that of traditional logistics in supply chains.
(32) Is reverse logistics beneficial? If you say no, explain why you think so. If you say, yes, explain why you think so.
(33) Explain how depletion of resources, quality issues, and e-commerce serve as key drivers for reverse logistics.
Answer:-
31) Reverse Logistics:-
Reverse Logistics can be defined as operations which involve reuse of items and materials. The purpose of reverse logistics is to maintain a financially savvy stream of crude materials from the end item to the point of origin to extract most extreme value or an efficient removal.
Two manners by which management of reverse logistics differs from traditional logistics:-
In traditional logistics, the sales forecast is used to meet the demand of the item. The inventory is shipped to conveyance centers and afterward forwarded to retailers.
This process is initiated by the organization. However, in reverse logistics, the item streams in reverse due to the move that was made by the customer and not by the firm.
Traditional logistics has a standardized progression of inventory or items based on factual information and forecast. Reverse logistics process needs to be optimized from the time to time since it is a reactive measure on part of the firm.
32) Yes, reverse logistics is beneficial due to the following reasons:-
Transparency in Product Life Cycle:-
Its presents a clear picture of how and where every ounce of item is being used. Reverse logistics streams from final item to its origin where the objective is to recapture the value of an item through an efficient recycling process to maintain a strategic distance from any wastage and save cost.
The process becomes completely clear and can be optimized every now and then.
Ideal Utilization of Resources:-
The objective of every business is to accomplish more with less. It's better to utilize the resources completely rather than dumping it in the garbage.
Being scarce in nature, resources which are utilized efficiently saves the expense of new crude material and saves time.
33) Depletion of Resources:-
Resources are scarce and overutilization affects the business and natural environment. In reality as we know it where resource does not come cheap, reverse logistics minimizes and heavy cost involved due to wastage or inefficient use of resources.
Quality Issues:-
Returns caused due to quality issues becomes expensive for an organization if the reverse logistics process isn't in place. This helps the managers to identify the underlying driver from where these issues are arising from and optimize the process with the goal that these issues don't happen.
Managers can collect, examine and evaluate quality issues in an effective reverse logistics system.
E-Commerce:-
Reverse logistics is not, at this point a choice however the need of great importance for e-commerce businesses. The rate of return in e-commerce ranges between 3% to half. Numerous companies face an issue where the expense of processing a return is more expensive than the cost fo selling the item.
Reverse Logistics minimizes the damage caused by returns and sets out a process of recapturing its value through reuse or through a financially savvy removal.
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