gailen vick executive director rla may 29, 2013
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Gailen Vick Executive Director www.RLA.org May 29, 2013. The Reverse Logistics Association was formed :. To support third party service providers To educate OEMs & Retailers on why they need to outsource their RL - PowerPoint PPT PresentationTRANSCRIPT
Reverse Logistics: The way into the future
Gailen Vick
Executive Directorwww.RLA.orgMay 29, 2013
Reverse Logistics: The way into the future
• To support third party service providers • To educate OEMs & Retailers on why they
need to outsource their RL• To enable Private Industry, Consultants,
Academics & Government Leaders to connect and share new ideas and opportunities
The Reverse Logistics Association was formed:
Reverse Logistics: The way into the future
To educate all industries about the Reverse Logistics processes which are common to all.
To produce events around the world where OEMs, ODMs, Branded and Retail companies receive information on RL support services.
What Is The RLA’s Mission?
Reverse Logistics: The way into the future
Where Does Reverse Logistics Fit?
CORPORATE IDENTITY CHANGE
•Customer Service (Helpdesk)•Depot Repair•Service Logistics (Field Service)
– Transportation/Warehousing– Spare Parts Management– RMA Management– Replacement Management
•End-of-life Manufacturing•Fulfillment Services•IT Process Management•Recycling•Refurbishment/Screening•Warranty Management•“B” Channel Management•Asset Management•Environmental Resources
•PCB Assembly•Box Assembly•Volume Manufacturing•Integration•Configuration•Final Testing•Distribution to Customer•Customer Fulfillment•Transportation
•Vendor Relations•Planning•ProcurementInventory Planning•Component Fabrication
•Design Development•Technology Roadmaps•ASIC Development•Mechanical Design•PCB Layout•Prototyping•New Product Introduction
Aftermarket Customer Services
Manufacturing & Distribution
Material Management
New ProductDevelopment
REVERSE LOGISTICSEND USER / CONSUMER
FORWARD LOGISTICS
Supply Chain - After Market Supply ChainPRODUCT LIFE CYCLE
• Sustainability
Reverse Logistics: The way into the future
How Do We Spread The Word?- RLmagazine.com• 51 Editions• WW Circulation of 90,000+
• Published Monthly• Weekly News Clippings
• DIGITAL – on all e-readers
kindle
Reverse Logistics: The way into the future
The RL Dilemma
di·lem·ma:
a difficult or persistent problem
Source: Merriam-Webster dictionary
Reverse Logistics: The way into the future
Reverse Logistics DilemmaEvery Company Has An RL Dilemma
• Obvious-Consumer Electronics, Computers, Automotive
• Not so obvious-Books, Apparel, Retail, Grocery, Software
• Practically invisible-Pharmaceuticals, Aerospace, Agriculture, Medical, Energy
Reverse Logistics: The way into the future
Companies don’t know they have a Dilemma!
Senior Management Frequently Unaware Of:- Size of RL operations- Cost of RL operations- Impact of RL operations on bottom line- Impact of RL operation on customer service- Impact of legislation on RL- Many line/staff managers don’t know RL Operations even exist
SEE THIS
MISS THIS
Reverse Logistics: The way into the future
How to Make a Difference
• Ownership within EnterpriseWho Owns the RL Function?
• Distributed across functions• “Hidden” in operations or customer service
• MeasurementTools to measure the performance of RL?
• Few, specialized software tools• Financially absorbed in other departmental budgets
Reverse Logistics: The way into the future
The RL Impact• Finance
What are the true costs / benefits to the organization?• I.E. Actual costs vs. retained asset value
• OperationsHow is RL affecting operational efficiency?• I.E. Quality improvements based on RL
• Sales & MarketingWhat is the effect of RL on sales?• I.E. Customer satisfaction, brand reputation,
remanufactured goods impacting prices
RL affects the bottom line
Reverse Logistics: The way into the future
Source: RLA Amsterdam Conference 2010, Keynote AddressRehman Mohammed, Cisco
Reverse Logistics: The way into the future
Sources: RLA Amsterdam Conference 2010, Keynote AddressRehman Mohammed, Cisco & Investor.cisco.com – FY 2009
(2.4% of FY’09 Net Saving)
FY’09 Net Income – $ 6.1 Billion GAAP
Reverse Logistics: The way into the future
What is the Impact to Mother Earth?• Environmental
• Are we a good corporate citizen?• Are we alienating clients?
• Governmental / Legislative• Are we meeting governmental requirements?• Are we open to legal action?
• E.g. RoHs, WEEE, SB 50• Bottom Line Cost
• 3% to 15% in every company
It all affects the bottom line
Reverse Logistics: The way into the future
After tax Profits;Are They Right?
% Returns TakeAway
From Bottom Line Profits
Product Production Cost
ReverseLogistics ITManagement
Results If You Manufacture 1 Million Units/Year
Revenue per Unit is $1 - $1,000,000 totalProfit per unit is 5% After Tax - $50,000 total
Average Return Rate is 10% - 100,000 total unitsReturns represent $100,000 in lost revenue – After returns your P&L shows a $50,000 LOSS!
Reverse Logistics recovers 80% of the returns - $80,000 to the company’s after tax profit
After Tax Profit with RL recovery - $30,000
So who is most important, the VP of Sales that took $50K from your company, or the Reverse Logistics professional that gave you a
Bottom Line - $30K After Tax Profit?
Reverse Logistics: The way into the future
Solution
The Chief Reverse Logistics Officer (CRLO) would:• Have authority to make changes on RL globally,
but day-to-day responsibility stays in the hands of each Department
• Monitor the P & L to develop a Virtual profit center• Acquire the necessary tools to support the finance
department and report effectively to the Executive Staff
Resolve The Dilemma
Create A “C” Level Position For RL Management
Reverse Logistics: The way into the future
Please hold your Questions