reverse logistics 101 - mark millar cilt hk 0212 final circ

8/2/2019 Reverse Logistics 101 - Mark Millar CILT HK 0212 FINAL Circ

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© M Power Associates1

“Reverse Logistics 101”exploring the What, Why, Where,

When, How and Who of Aftermarket

Service and Support

Mark [email protected]




Reverse Logistics 101 What, Why, Where, When, How and Who?




Reverse Logistics – many terms

- what’s the common theme?

Reverse Logistics

Spare Parts LogisticsReturns

Service Parts Logistics

Retrogistics

After-Sales-Support

After Market




Forward Logistics




Reverse Logistics

ReturnsCentre


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SCOR Model

Supply Chain Operations Reference Model

Returns: Processes associated with returning or

receiving returned products, for any reason



The process of planning,implementing, and controllingthe efficient, cost effective flowof raw materials, in-processinventory, finished goods andrelated information from the

point of consumption (back) tothe point of origin for thepurpose of recapturing value orproper disposal

Reverse Logistics Defined - is the process of

moving goods from their typical final

destination for the purpose of capturing value,or proper disposal

Source: University of Nevada, Reno, Center for Logistics Management



How is Reverse Logistics Different . . . . . .Forward Logistics Reverse Logistics

Product quality uniform Product quality not uniform

Disposition options clear Disposition not clear

Routing of product unambiguous Routing of product ambiguous

Forward distribution costs more easilyunderstandable

Reverse costs less understandable

Pricing of product uniform Pricing of product not uniform

Inventory management consistent Inventory management not consistent

Product life cycle manageable Product lifecycle less manageable

Financial Management issues clearer Financial Management issues unclear

Negotiation between parties morestraightforward

Negotiation less straightforward

Type of customer easy to identify andmarket to

Type of customer difficult to identifyand market to

Visibility of process more transparent Visibility of process less transparentSource: Dr. Dale S. Rogers, Center for Logistics Management, University of Nevada, Reverse Logistics Executive Council. Livonia, MI



Terminology - Alphabet Soup

RSP

RSO

RL

3PL

PUDOLSP WMS

MRO

RTV

RMA OOW

LLPFSE NFF

RTD



Reverse Logistics – Repairs and Returns



Key Characteristics of Reverse Supply Chains

Uncertainty of Supply

Value Improving

Customer Specific

Flexibility

Timing

Multi-partyCoordination

Source: Blumberg Advisory Group



Reverse Logistics Growth Drivers?

Market Trends Business Incentives



Lucrative Aftermarket customers will spend 5 to 20 times the initial sales price onsubsequent services and consumables

24%

45%

76%

55%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Revenue Profit

After Sales Services Initial Product Sale

Source: AMR Research



Growing Market for multiple Service Providers- for 3PL and Captive (Call Centers, Repairs, etc)



Business Factors driving Reverse Logistics

1. Manufacturing returns

2. Commercial returns

3. Product recalls4. Warranty returns

5. Service returns

6. End-of-use returns

7. End-of-life returns



Increasing Pressure on Reverse Logistics



Where – All types of products and SectorsTypical percentage Returns by Product Type

5%

6%

8%

15%

15%

20%

20%

20%

25%

30%

30%

50%

0% 10% 20% 30% 40% 50% 60%

Consumer Electronics

Auto Parts

Printers

Mass Merchandisers

Pharmaceuticals

Book Distributors

Electronic Distributors

Computer Manufacturers

CD ROMs

Book Publishers

Greeting Cards

Magazine Publishing



Reverse Logistics WhereParticularly Complex in some Sectors

1 2 3

Source: M Power Associates

High TechAutomotive Medical Equipment



Enterprise

Reverse Logistics Complex ApplicationsTwo primary application groups



Enterprise Applications

- often mission critical

Office Computer Systems Hospital Equipment

ATM Banking Network Telecommunications



Consumer Applications – all pervasive

Notebook

MP3Player

Camera

Mobile Phone

Blackberry

Tablet




Reverse LogisticsThree Phase Work Flow




Reverse LogisticsKey Elements of After Market Service

1. Transaction Processing (RMA)

• Customer Contact Centre, Warranty Validation

2. Returns Processing

• Advance Replacement, Swap, Repair & Return

3. Reverse Logistics – Inbound & Outbound

4. Returns Dispositioning & Diagnostics

• Screen & Test, NDF / NFF, RTV (Warranty)

• Repackage, Refurbish

5. Technical Repair (Outsourced)

6. Asset Recovery

• De-Kit, Spare Parts Recovery, Recycle, Disposal




Returns




Why products get returned

- reasons given by customers for product returns

0%

5%

10%

15%

20%

25%

Could the forward supply chain prevent some of these returns?




Return Activities

- in-sourced and outsourced




Reverse Logistics - Technology Intensive




Integrated Reverse Logistics System- incorporate Call Centre, Repair and Logistics Operations

Integrated

Systems

Source: Kewill Systems




Reverse Logistics Service Parts Logistics Flows, behind the scenes




Multiple Service Providers3PL, EMS, RSP, FSE, BPO, Call Centres




Sevens Steps Checklist to Successful reverseLogistics Operations

1 2 3

5 6 7

4

Centralize ReturnsOperations

Gather Accurate

Data

Appoint Leader

Ensure Real-time

Visibility

Develop BusinessProcesses

No Firefighting

Link BusinessProcesses



AppendicesFor the additional slides from the

appendices, please send your contact

details to me at [email protected]

Mark [email protected]

mailto:[email protected]

mailto:[email protected]

reverse logistics 101 - mark millar cilt hk 0212 final circ

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