Reverse logistics is how companies manage the flow of returned and excess merchandise moving through the supply chain. returns are the retail industry s quietly mounting logistics problem Nov 02 2022 web nov 28 2022 returns are the retail industry s quietly mounting logistics problem november 28 2022 2 30 am customer returns are skyrocketing in the u s but many items don t . Resource reduction refers to the minimisation of materials used in a product and the minimization of waste and energy achieved through the design of more environmentally efficient products (Carterand Ellram, 1998). The concept is to evaluate the validity and implementation of current reverse logistical operations in the retail business of primark. 21 December. Using the information, we develop a generic returns process flow by integrating various broad factors: demand, package and product conditions, test and repair, secondary market, vendor, charity giving, recycle, and disposal. Demand is changing with a high pace; customer may like something today and something else tomorrow and to keep up with this pace organizations need to adopt returns management. Retailer emphasis on training customers in the proper use of their products which can help in improving customer relations as well as decreasing costs of product returns. This could reduce the uncertainty in the timing and quality of returns that has been blamed for the unpredictability of reconditioning and refurbishing returned products (Guide and Van Wassenhove, 2002). Supply chain management is a process which binds and links the entire process from supplying a product until it gets delivered to the end customer. There are always new challenges facing businesses as the retail industry rapidly changes due to technological evolution. The concept is to evaluate the validity and implementation of current reverse logistical operations in the retail business of primark. The problem could be as simple as the color not being as bright as the customer thought, or maybe the item didn't meet the customer's needs. One way to do that is to find an ecommerce fulfillment center that uses robots. Written by guest Updated: September 24, 2019 6:25: . According to the NRF, nearly 40% of consumers returned a holiday gift last season. December 21, 2021. https://assignbuster.com/the-impact-of-reverse-logistics-in-retail-industry/. For this, data analysis orbig data can help significantly. This year weve seen particularly high return rates on clothing, consumer electronics, health and fitness products and baby items. Any use of the work that does not include an appropriate citation is banned. Many famous brands and companies have realised how strictly linked reverse logistics and sustainability are, such as H&M and Apple: Recycled clothing lines. Collect key principles and research strategic data. The aim of this study is to identify the problems being faced in reverse logistics process and to provide solutions for these problems. Forward logisticsthe process of moving goods from manufacturers to their end usersis the half most consumers regularly interact with. In that case, we invite you to learn about the trends that will help you create a disruptive strategy, which will allow you to differentiate yourself from your competitors and be recognized as a success case in this field. The different types of forward supply chain management include direct order fulfillment, hub services, pick-and-pack services, and shipping. The field study will be done on evaluating companys annual turnover, sales and collection of relevant data via companys website, conducting interviews with various decision makers of concerned departments. How to improve supply chain management with the help of reverse logistics? "The impact of reverse logistics in retail industry." The second policy deals with the disposal chain, in which used products are carried to landfills (Murphy, P R. and Poist, R F.2003).There exists a range of ordered sequencing that different companies adopt depending on which activities are engaged in by the firm. *You can also browse our support articles here >. TakeShyp, for example. This aftermarket activity involves activities like Refurbishment, Replacement, Remanufacturing, Scrap and even Excess inventory, etc. Few research studies have published specific empirical data regarding the reverse logistics practices of companies. All work is written to order. The three largest container carriers Maersk, MSC and CMA CGM have on order capacity equal to 15.6 percent of their current combined fleet; the next 18 largest carriers have orders equal to 19.8 percent of their existing fleet. Reverse logistics is also about keeping the environment healthy by not disposing too much waste, reducing the waste particles or reusing them. Identifying fraudulent returns. In retail, inbound logistics refers to receiving your inventory or raw materials that your manufacture to create a new product. Typical reverse logistics activities would be the processes a company uses to collect used, damaged, unwanted (stock balancing returns) or outdated products, in addition to the packaging and shipping materials from the end-user or the reseller. Despite a demand for fair returns policies, the reverse logistics process isn't necessarily a consumer concern. PDF | On Oct 14, 2019, Dayong Xu published RESEARCH ON STRATEGIC MODE AND DEVELOPMENT OF REVERSE LOGISTICS IN RETAIL INDUSTRY | Find, read and cite all the research you need on ResearchGate This multi-stage study employed interviews, site visits, and a mail survey to collect responses from 230 members of the Warehousing Education and Research Council (WERC) regarding their reverse logistics practices. According to McKinsey, some companies' automated pallet-handling systems can halve average shipment-processing times. There are two types of returns that fashion distributors have to deal with. In other words, it's your return process, which can be quite messy. Returns processing. Returns provide a revenue generating opportunity via value recapture- return, refurbish, recycle. Many firms have only become aware of the importance of reverse logistics relatively, and have yet to realize the strategic. The complexity of planning for reverse logistics Creating and managing a streamlined returns process in a world where consumers shop both in-store and online can be difficult. It would be more helpful to make the use of newsletters, online forum, regular meetings through events, telephonic calls. The field study will be done on evaluating companys annual turnover, sales and collection of relevant data via companys website, conducting interviews with various decision makers of concerned departments. Reverse logistics also accounts for about 5% of the total logistics spend in the U.S. (2021) 'The impact of reverse logistics in retail industry'. The first is the return made directly from the customer, either directly to the warehouse or to the store that then returns them to the warehouse. A reverse logistics supply chain management strategy is critical to maintaining healthy inventory turn and operating expenses. But, by leveraging Industry 4.0 tech like RFID-enabled Industrial Panel PCs and Rugged Industrial Tablets, businesses can maximize the efficiency of their return . How reverse logistics influence environmental and social retail environment? 2. Reverse logistics is the process which involves planning, implementing, cost effective flow of stocks and machinery, finished goods, in-process inventory and related information from the point of supplying to the point of final consumption. Modern marketing. Refurbishing is working on the same product and enhancing and changing it from inside completely. Companies have operational procedures for machine centres; however, returns flows among machine centres are informal in many cases or many factors are not considered (Trebilcock, 2002). Payment of the value indicated on the device. Robinson Worldwide. Reverse logistics includes all the operations it takes to manage the physical movement and cost of returned items. The percentage of returned goods can be more than 50% in certain industries. Reverse supply chains require coordination across multiple business partners and points of origin. For a clothes store like Primark, which go as per the market demand, they need to update themselves with time as customers these days are all looking for style, current trends and so on. Manufacturers and retailers face several challenges when setting up a reverse logistics process that is efficient and cost-effective for the business and its customers. The reverse material movement from end customers to suppliers has received much less attention (Rogers and Tibben-Lembke, 2001). Optimization of the reverse logistics process: Reducing product return times becomes a priority without compromising the profitability of the business. The increase of eco-efficiency leads to reverse logistics activities in the firm. Few more terms, often used with reverse logistics are: Reconditioning the machinery when it is not performing up to its mark, repairing it and then using it again. Now a days, managers reactions were not quite strong as to whether recycling materials that are un-useable generate considerable revenues or if channel clearing considerably reduces obsolete items inventory, and if repaired items yield reasonable profits in secondary markets. Free resources to assist you with your university studies! Reverse logistics is the process which involves planning, implementing, cost effective flow of stocks and machinery, finished goods, in-process inventory and related information from the point of supplying to the point of final consumption. The qualitative research interview seeks to describe and the meanings of central themes in the life world of the subjects. How to improve supply chain management with the help of reverse logistics? Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. Also, the profit margins could be lower for the manufacturer because in addition to the refurbishing cost, the product often must be sold at a lower price. The Sears reverse logistics stream is now a multi-step process: Store level. Download In fact, one study found that 30% of shoppers deliberately over-purchase and then return unwanted items. 8) 8. Retail behemoths like Amazon flag accounts hitting concession limits and could refuse. The qualitative research interview seeks to describe and the meanings of central themes in the life world of the subjects. A reverse logistics system will enable us to plan in advance, often as early as the design process, the way to handle returns efficiently and ways this can most effectively feed into the product design plan. To conclude, reverse logistics is a process that is beginning to become relevant because it directly influences the reduction of return times to two minutes, the experience of users with the brand, positively impacting the companys profitability, and aligns the process to sustainable objectives. Reverse logistics is the process of moving goods from their point of consumption back to their point of origin for either disposal or recapturing value. Many of the costs associated with reverse logistics are hidden, making this a bountiful hunting ground for supply chain cost reductions, for those who dare to go looking. Remanufacturing and refurbishing are the two vital aspects of reverse logistics which helps in reutilisation and reselling of a product. To stay on the website, agree to our An analytical study via interview will be conducted for the collection of primary data. Returns Management Challenges in the Manufacturing Sector. 3 Reverse Logistics Challenges Manufacturers Can Overcome to Unlock Incredible Potential MPO Resources Nucleus Analyst Report: MPO Improves Service Levels by 15% This Nucleus Research paper reports on how the MPO cloud platform and how it improved service levels for its customers. Finding relevant literatures and evaluating it, online survey methods, interpreting research questions. Finalizing the benchmark of the research area. Please enable JavaScript on your browser and try again. Being at the beginning of your supply chain and one of the first steps in your business process, inbound logistics are a critical step. Reverse logistics is the process of taking products back from customers. Completing the initial draft and heading towards next step. The ultimate goal of reverse logistics programs is to produce reverse logistics. The scope of this role includes the management of the Triage Team, assignment/disposition of returned products, and close collaboration with Repair, Inventory, and our . By 'container', here I mean the re-fillable ones distributed to mass-consumption venues where the beverages are resold on tap, not small retail containers like . That's why reverse logistics are becoming just as closely monitored by C-level executives. Different products may go through different routes; same products with different types of damages also may undergo different operations. What do you expect to stand out in the industry by generating a disruptive reverse logistics experience? Reselling is done after one or more of the above three. Every year, 15% of goods sold are returned or deemed excess, and many retailers do not have adequate systems in place to manage this flood of items. The goal is to get merchandise to customers as fast as possible, which means heavy investments in technology to streamline this process. Desk study or research will consider examining literature collected via the website of the retail store, retail industries journals, press, statistics and magazines and other media sources. It is quite clear that in the future, more firms will lavish considerable attention on reverse logistics. Reverse logistics software delivers the data you need to pinpoint inefficiencies and excess costs, while at the same time driving automation and efficiency. Today logistics plays a fundamental role in the end customers experience, which is why companies are increasingly focusing their efforts on having an efficient supply chain. 3. Few more terms, often used with reverse logistics are: Reconditioning the machinery when it is not performing up to its mark, repairing it and then using it again. Online spending represented 21.3% of total retail sales last year, compared with 15.8%, the year prior. The traditional reverse supply chain is long and complicated, with goods traveling from consumer to retailer to vendor to liquidator to wholesaler to reseller and finally, to a secondary buyer. From the day after Christmas and throughout January, retailers can anticipate that about1 in 3 holiday gift recipientswill return an item, either due to wrong size, wrong color, wrong style, damaged or simply unwanted. Copyright AssignBuster / All rights reserved. This piece of study or investigation emphasizes more on the utilisation of the reverse logistics approach in retail business like that of renowned store primark. "The impact of reverse logistics in retail industry." The interviewer can pursue in-depth information around the topic. Business logistics, both integrated and reverse, is an important activity in the supply chain, capable of managing raw materials, stocks, transport and information. Fully utilising the resources in-order to follow the concept and application. Reverse logistics encompasses all operations related to the upstream movement of products and materials. The reverse material movement from end customers to suppliers has received much less attention (Rogers and Tibben-Lembke, 2001). Most firms handle the product returns process themselves and typically within the same facilities that handle forward logistics. Strategic and Statistical analysis of the data and writing the output. (2021, December 21). Murphy and Posit (2000) have reported that recycling of materials, reducing consumption and reusing materials are the three most commonly utilized green logistics strategies. Also, this device is handy for logistics and transport companies because it allows the user to leave the goods in an individual box so that later this merchandise can be picked up by a carrier or in the case that the person cannot receive the package, there is also the possibility that the logistics company leaves the package in a box near the customer and sends a notification so the person can pick it up. Results suggest that in spite of the growing importance of reverse logistics, few executives have product return processing as their primary responsibility and often undertake this activity along with other job responsibilities. Many firms have only become aware of the importance of reverse logistics relatively, and have yet to realize the strategic. The relevant preamble section has been excerpted to encourage broad dissemination. Get the Ecommerce, Marketing & Operations info you need when you need it. (Lincoln, NE), 3 benefits of technifying your logistics chain, Artificial vision, looking for patterns in the logistic chain. Results indicate that, contrary to general understanding, the majority of retailers and wholesalers reported a recovery rate of over 75% of product cost (James R. Stock and Jay P. Mulki, 2009). As supply chain complexity increases, reverse logistics becomes more critical to organizations seeking a competitive edge. Tobin Moore is the co-founder and CEO ofOptoro, Delivering Personalized Experiences to Better Connect with the Customer, How to Foster Engagement Without Cutting Prices, Strengthening Ecommerce Fraud Operations During Economic Uncertainty, How Flexible Labor is Reshaping Ecommerce Fulfillment Operations, Automation-as-a-Service: Flexing to Meet Ecommerce Fulfillment Demands, Foreign Trade Zones: A Hidden Gem for Retailers, Automation and Robotics: Moving Past Limitations to Gains, Shipping Capacity Management: The Outlook for 2022 Peak Season, Cross-Border Ecommerce: Facing Logistical Challenges, Seizing Opportunities, How WineDirect Uses Waveless Tech to Drive Scale, Order Accuracy, SMS Marketing Over the Holidays: What it Means for 2023, Making Loyal Customers Out of Holiday Shoppers, Supply Chain, Sustainability Tools: Working in Tandem. With the ongoing growth of e-commerce, the volume of returned inventory continues to rise for logistics managers in a variety of industry sectors. Retailers can help a great deal by initial sorting and by making decisions on processing versus returning to manufacturer. The reverse logistics market is predicted to observe substantial recovery in 2021, owing to changing social distancing measures, rising E-commerce, retail, and pharmaceutical sales, and refurbishment initiatives of automotive industry leaders worldwide to recycle and reuse crucial vehicle components such as a battery. Only this way will it be possible to manage returns quickly and efficiently. Return deliveries - costs by region 2015-2019. This enables the companies to implement supply chain management into the business. The increase of eco-efficiency leads to reverse logistics activities in the firm. Here it is essential that there is proper order in receiving, inspection, and classification of returned items. Retail stores like primark do not initiate reverse logistics activity as a result of planning and decision making on the part of the firm but in response to actions by consumers or downstream channel members. According to the Reverse Logistics Executive Council, reverse logistics is the process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal (Xiaoming Li, Festus Olorunniwo, 2008). Interviews are particularly useful for getting the story behind a participants experiences. reverse logistics (rl) can be considered as a way to understand the process of movement of products from downstream to the point of production for the purpose of recapturing value and proper disposal (khan & sabzwari, 2009).the philosophy of reverse logistics management has been creating buzz for the past decade; still organizations don't really Few research studies have published specific empirical data regarding the reverse logistics practices of companies. The two key aspects of reverse logistics are returns management and refurbishing or . The investigation consists of field as well as desk study. In e-commerce businesses, the seller includes return policy in case the buyer does not like the product. For reverse logistics, however, it's all about January, February, and March. Some companies are even building their entire businesses around the growing consumer habit of buying online and returning unwanted items. Returning items directly to stock, repackaging and returning to stock, and selling as scrap, were the three top disposition options employed by firms. The main task in interviewing is to understand the meaning of what the interviewees say(Kvale,1996). The service requires full cookie support in order to view this website. The person opens the box with a QR code or designated key and takes the package away. Dont limit yourself to only reading the content. Even worse, it can do so without anyone ever noticing or feeling accountable. Unfortunately, businesses without strong reverse logistics will run into massive headaches, including increased costs, disrupted supply lines, unhappy workers, and angry customers. Reverse logistics is also about keeping the environment healthy by not disposing too much waste, reducing the waste particles or reusing them. www.industryweek.com is using a security service for protection against online attacks. Reverse logistics is required by every e-commerce business. Retailers can help a great deal by initial sorting and by making decisions on processing versus returning to manufacturer. "The role of reverse logistics professionals is to reduce the quantity of returns and the cost related to handling products that need to be removed from the supply chain for whatever reason." Reverse logistics is a complicated process, says Chris O'Brien, vice president of Minneapolis-based C.H. Most returned products are processed to put back to shelf. Reverse logistics is the process which involves planning, implementing, cost effective flow of stocks and machinery, finished goods, in-process inventory and related information from the point of supplying to the point of final consumption. The impact of reverse logistics in retail industry, We'll write a high-quality original custom paper on, https://assignbuster.com/the-impact-of-reverse-logistics-in-retail-industry/, Primark the global beauty market (abf, 2016). Expand your knowledge of reverse logistics management and its application to civilian and military enterprises with an online Master of Arts in Reverse Logistics Management from American Public University (APU). What is the importance of reverse logistics in cost reduction? Several major retail companies have filed for bankruptcy since 2017, and this trend . Primark, is a well known retail stores were people do a purchase in bulk due to its low prices. You already know what reverse logistics is and the challenges of implementing such a strategy in a company. The outcomes of the eco-efficiency calculations will help authorities in formulating criteria for collection of disposed products and in monitoring end-of-life performance of take-back systems (Huisman, 2002). A reverse logistics system will enable us to plan in advance, often as early as the design process, the way to handle returns efficiently and ways this can most effectively feed into the product design plan. Lara L. Sowinski. The situation in the UK was no different, with the rate of online growth over 37% . Since reverse logistics involved many more steps and processes as materials move back through the supply chain, it's understandable that it takes up a notable amount of all logistics costs in the U.S. A reverse logistics flow is much more active, with much less visibility. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. The notion of reverse logistics (RL) in a supply chain (SC) has been extensively used in businesses around the world due to environmental requirements, the recovery of potentially valuable materials for secondary manufacturers, and sustainable businesses [1,2].Many governments worldwide require manufacturers to follow the "extended producer responsibility (EPR)" principle because waste . Following the guidelines of the supervisor step by step and implementing the necessary changes to be made. Remanufacturing is similar to refurbishing but may require completely disassembling the product. This could reduce the uncertainty in the timing and quality of returns that has been blamed for the unpredictability of reconditioning and refurbishing returned products (Guide and Van Wassenhove, 2002). Seeking to optimize the routes and plan them more efficiently when delivering the products should be sought, as well as the time of picking them up. E-commerce as share of total retail sales worldwide 2015-2021, with forecasts to 2026. successful reverse logistics strategic framework with critical factors. AssignBuster, 21 Dec. 2021, assignbuster.com/the-impact-of-reverse-logistics-in-retail-industry/. Looking for a flexible role? AssignBuster. At the time of return, information about the item and its condition may be entered into the retail stores information system, and forwarded to the returns processing centre (Ronald S. Tibben-Lembke and Dale S. Rogers, 2002). Organizations in order to survive the competition and to maintain a good customer relationship have to be good at exchange policies and need to shorten the time from accepting the returns to the actual supplier so that they can reduce the operational costs and increase profitability. Here we share with you some of the challenges that this methodology brings: Todays consumer is highly demanding, and this applies to logistics as well. Traditional or forward logistics deals with the flow of products from the factory to the consumer. To make your user experience better, our website uses cookies. Most returned products are processed to put back to shelf. Without a dedicated management focus, reverse logistics can impact supply chain costs substantially. In view of this, manufacturers desire to maximize profits often dictates the proportion of product that gets refurbished (Vorasayan and Ryan 2006). Recycling happens only when the product is not in condition where it can be worked on like reconditioning, refurbishing, remanufacturing so as to resell it. Remanufacturing and refurbishing are the two vital aspects of reverse logistics which helps in reutilisation and reselling of a product. According to the National Retail Federation, consumers returned an estimated $428 billion in merchandise to retailers last year, and with holiday spending getting underway, this problem is unlikely to go away anytime soon. October 10, 2011. "The impact of reverse logistics in retail industry." 3. Remanufacturing is similar to refurbishing but may require completely disassembling the product. Companies must recognize that reverse logistics has become an important source of opportunity for improving visibility and profitability and lowering costs across the supply chain. All this is done to analyze the data and to know how often does primark change its outstanding stocks on the shelves, check the unsold stock to avoid wastage in-order to make improvements in the reverse logistics processes. Despite the best efforts of . Reverse logistics start at the end consumer, moving backward through the supply chain to the distributor or from the distributor to the manufacturer. Global reverse logistics market size 2020-2028. Retail stores and even other suppliers have exchange policies or payback policies which provides customer with an ease of exchanging goods and supplies, once these items are returned, it then goes to production houses for refurbishment or to see what can be done with them in order to reuse or resell them. It's perhaps best to start with an understanding of the nature of reverse logistics in the fashion industry. The reason is simple. Desk study or research will consider examining literature collected via the website of the retail store, retail industries journals, press, statistics and magazines and other media sources. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. Also, the profit margins could be lower for the manufacturer because in addition to the refurbishing cost, the product often must be sold at a lower price. Two alternative waste management policies are studied and compared. How to encourage customer loyalty using reverse logistics? Now people want to have the products in one or a maximum of two days, and if the shipping service is free, so much better!They also want to be able to return the products easily and without any additional costs. From November to December, retail stores and websites were flooded with shoppers looking to buy the perfect items for everyone on their holiday shopping list. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. Formerly, firms have been spending significant time and money in improving their forward supply chains while ignoring their potential reverse supply chains. Reverse logistics is the process which involves planning, implementing, cost effective flow of stocks and machinery, finished goods, in-process inventory and related information from the point of supplying to the point of final consumption. But arguably, it's U.S. retailers who have felt the greatest impact in recent years. Suppose your goal is to implement reverse logistics. Most overstock goods return only a fraction of their original selling price. Most of the companies set up their processes based on some knowledge of materials flows: inbound receiving, sorting, testing, storing, and outbound shipping. A reverse logistics flow is much more active, with much less visibility. Companies must recognize that reverse logistics has become an important source of opportunity for improving visibility and profitability and lowering costs across the supply chain. Discuss the coursework and the research subject of the dissertation. How reverse logistics influence environmental and social retail environment? Most of the companies set up their processes based on some knowledge of materials flows: inbound receiving, sorting, testing, storing, and outbound shipping. No plagiarism, guaranteed! When a customer returns an item to a retail store, the store collects the items to be sent to a centralized sorting facility. Customers need a way to return items they've purchased if they are dissatisfied with them, and this process needs to run smoothly. With online sales receiving a boost from COVID-19 lockdowns, that figure is only going to rise. 3. With the rise of online shopping and free returns, that number is expected to increase significantly. This sample can be utilized as a research and reference resource to aid in the writing of your own work. The first policy deals with the recovery chain, that is, the flow of used products from consumers to recovery facilities. Strategic and Statistical analysis of the data and writing the output. And we want to tell you that there is a technological and innovative toolthat has been created to help you optimize the time in reverse logistics and reduce the high costs that this kind of process involves. Successful enterprises instinctively look . The ultimate goal of reverse logistics programs is to produce reverse logistics. The service requires full JavaScript support in order to view this website. Returns are becoming one of the greatest supply chain challenges companies face today. On the contrary, there was a deceleration in retail sales globally in 2020. However, the problem could also be more severe, like faulty manufacturing or damage. Reverse logistics have become an important operational activity as well as a challenge with the emergence of eCommerce. Despite a demand forfair returns policies, the reverse logistics process isnt necessarily a consumer concern. A company should know how to reuse or resell by doing some refurbishment. For this purpose, 23 industrial enterprises were examined in the scope of sample. Returning items directly to stock, repackaging and returning to stock, and selling as scrap, were the three top disposition options employed by firms. Still, it is not only a matter of having optimized delivery logistics but now we are also talking about reverse logistics. For instance, In the beverage industry, companies are using . The salvaging process involves either repairing products that cannot be sold as new or refurbishing products to a usable state and then selling them as second-hand goods. Organizations in order to survive the competition and to maintain a good customer relationship have to be good at exchange policies and need to shorten the time from accepting the returns to the actual supplier so that they can reduce the operational costs and increase profitability. The second policy deals with the disposal chain, in which used products are carried to landfills (Murphy, P R. and Poist, R F. 2003). If a firm is not able to resell the items, they often end up in land fills, or perhaps recycled. Using the information, we develop a generic returns process flow by integrating various broad factors: demand, package and product conditions, test and repair, secondary market, vendor, charity giving, recycle, and disposal. Finishing the remaining part and Submitting the two copies with a CD of softcopy on 24th September, 2010. 4.Print the label and stick it on the box. . In todays business world, Companies are looking for ways to improve there businesses by reducing costs, and improving labour efficiency. According to the Reverse Logistics Association, the reverse logistics industry in the United States is estimated to have more than $50 billion in annual revenues. This isnt easy to predict, no one can really forecast what is in today and out tomorrow, this is where returns management comes in picture. Return Recycling Products that are broken or worn out may still have value. If a firm is not able to resell the items, they often end up in land fills, or perhaps recycled. The important task of management is to mind the gap between returning of products till the time it reaches the supplier; this plays an important role in reducing the costs and increasing the profitability. They are then encouraged to keep what they like and return what they dont. These tools generate relevant contributions for companies in optimizingthe number of employees needed at each moment, the times established from the reception of the returned product, and its subsequent departure to its destination, which can be resale or recycling. 7) 7. Companies have operational procedures for machine centres; however, returns flows among machine centres are informal in many cases or many factors are not considered (Trebilcock, 2002). For a clothes store like Primark, which go as per the market demand, they need to update themselves with time as customers these days are all looking for style, current trends and so on. They simply have to fill it out, leave it in the box assigned to the order, and even get their money back! Changing buyer habits are also causing increases in excess inventory. Enter the email address you signed up with and we'll email you a reset link. Infrastructure issues can also cause slowdowns and delays, where ports struggle to process and service a large number of incoming shipments, and freight fleets are also affected by labor shortages and an increasing drop in available drivers. Technological tools, such as the one we mentioned, facilitate the organizations operations and, in this case, those involving logistic processes. In this case, advanced analytics can positively impact the process because it allows for a complete vision of the transportation operations through the optimization of the use of fleets, the number of drivers, and the established routes for possible eventualities. Usually, reverse logistics comes into play after the customer receives the products and starts the recycling or return process. Internal communications. Retail stores like primark do not initiate reverse logistics activity as a result of planning and decision making on the part of the firm but in response to actions by consumers or downstream channel members. Retailer emphasis on training customers in the proper use of their products which can help in improving customer relations as well as decreasing costs of product returns. Results indicate that, contrary to general understanding, the majority of retailers and wholesalers reported a recovery rate of over 75% of product cost (James R. Stock and Jay P. Mulki, 2009 ). Transportation to returns processor for evaluation, handling, aggregation, and return to vendor or for salvage. Sophisticated returns automation systems enable you to leverage a products value by quickly placing it in another product for resale before values depreciate (Anderson, Pat, 2009). 1. The CubiQ go locker is a disruptive and technological device that brings dynamism and agility to retail companies seeking to optimize their reverse logistics chain, provide a disruptive service to users, reduce return times to approximately two minutes without contact with others improving the customer experience. www.industryweek.com is using a security service for protection against online attacks. However, this leaves reverse logistics de-prioritized. Recycling happens only when the product is not in condition where it can be worked on like reconditioning, refurbishing, remanufacturing so as to resell it. It can be used for products that are defective, surplus, or returned by customers. Please enable cookies on your browser and try again. The presence of application system is important now-a-days in order to maintain and analyze the huge amount of data collected through staff meetings. Keeping the customers happy is the only source of income, so satisfying all they need is really very important. Numbers for the 2020 season are still being tallied, but The National Retail Federation (NRF) projects holiday e-commerce numbers to reach an increase between 20 and 30 percent, and totals could reach up to $218.4 billion, up from $168.7 billion in 2019. These set of responses are quite surprising because they are contrary to observations from the experiences reported in the trade literature (Reese, 2005). Following the guidelines of the supervisor step by step and implementing the necessary changes to be made. While you're investigating the technology a 3PL has to offer, consider whether you can automate any part of the logistics process. "Maximum diversity sampling . This tech start-ups app leverages carrier data to enable customers to compare options and determine the easiest, most affordable way to return their purchases. December 21, 2021. https://assignbuster.com/the-impact-of-reverse-logistics-in-retail-industry/. Completing the initial draft and heading towards next step. 6) 6. How to encourage customer loyalty using reverse logistics? AssignBuster. While product returns are understandably a key concern for e-retailers, there are actually five main events that require reverse logistics solutions: Top 5 reasons for a reverse logistics flow: Customer returns - especially from eCommerce purchases Failed deliveries Returning damaged parts Waste management and disposal and recycling 1. Sophisticated returns automation systems enable you to leverage a products value by quickly placing it in another product for resale before values depreciate (Anderson, Pat, 2009). This piece of study or investigation emphasizes more on the utilisation of the reverse logistics approach in retail business like that of renowned store primark. The person goes to the locker where the package is. Analyze essays structure, specific vocabulary, and citation styles to develop your writing skills. It is "the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. Finding relevant literatures and evaluating it, online survey methods, interpreting research questions. The important task of management is to mind the gap between returning of products till the time it reaches the supplier; this plays an important role in reducing the costs and increasing the profitability. It also involves recycling of programs, machinery fault or similar asset problems. The retail-logistics industry is split into two halves. A. Discuss the coursework and the research subject of the dissertation. Interviews may be useful as follow-up to certain respondents to questionnaires, e. g., to further investigate their responses (McNamara, 1999). Complex Return Order Flows. This work, titled "The impact of reverse logistics in retail industry" was written and willingly shared by a fellow student. Show all . "Moving backward through the supply chain is more difficult and complex because there isn't a priority and products are moving against the normal flow," says Dr. Dale Rogers, professor of supply chain management, University of Nevada. But for retailers, its a$1.75 trillion headache. Donating Returns Products may also be donated to a charity if the supplier cannot use them. The first is top-of-mind for retailers and customers alike: Forward logistics. StitchFixfeeds inventory data into analgorithmto send customers five personalized items each month. With regard to reverse. According to the Reverse Logistics Executive Council, reverse logistics is the process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal (Xiaoming Li, Festus Olorunniwo, 2008). The impact of reverse logistics in retail industry. Results suggest that in spite of the growing importance of reverse logistics, few executives have product return processing as their primary responsibility and often undertake this activity along with other job responsibilities. Company reverse logistics examples. Reverse logistics offers an opportunity for improving visibility and profitability while lowering costs across the supply chain. In todays business world, Companies are looking for ways to improve there businesses by reducing costs, and improving labour efficiency. Reverse logistics can also include processes where the end consumer is responsible for the final disposal of the product, including recycling, refurbishing or resale. Logistics for MSMEs: Though the adoption of technology in reverse logistics is at a preliminary stage, its use is bound to grow in times to come. We're here to answer any questions you have about our services. 3. This study provided new insight on reverse logistics as an important strategic initiative for the retailers to gain customer satisfaction, competitive advantage and cost effectiveness. Collect key principles and research strategic data. Without an efficient reverse logistics platform, you can turn off customers and prevent them from ever buying from you again. The outcomes of the eco-efficiency calculations will help authorities in formulating criteria for collection of disposed products and in monitoring end-of-life performance of take-back systems (Huisman, 2002). Indeed, the National Retail Federation (NRF) estimates that over $400 billion in goods are returned in any given . These two aspects greatly impact the user experience but involve a lot of effort by the companies. A problem-driven content analysis methodology was also conducted reviewing previous studies published from 2008 through 2015 to determine the key factors that affect reverse logistics decisions of managers towards successful reverse It would be more helpful to make the use of newsletters, online forum, regular meetings through events, telephonic calls. The investigation consists of field as well as desk study. Reverse logistics is a very essential process which is included in the supply chain management process. To avoid problems further along in the supply chain, having a robust inbound . Reverse logistics is a very essential process which is included in the supply chain management process. The technology is available, and success stories exist for replication and innovation. All this is done to analyze the data and to know how often does primark change its outstanding stocks on the shelves, check the unsold stock to avoid wastage in-order to make improvements in the reverse logistics processes. These set of responses are quite surprising because they are contrary to observations from the experiences reported in the trade literature (Reese, 2005). Resource reduction refers to the minimisation of materials used in a product and the minimization of waste and energy achieved through the design of more environmentally efficient products (Carterand Ellram, 1998). Reverse logistics is a very essential process which is included in the supply chain management process. If you need assistance with writing your essay, our professional essay writing service is here to help! Retrieved from https://assignbuster.com/the-impact-of-reverse-logistics-in-retail-industry/. The research is a case study which can be defined as "integrated multi-case design" type. Reverse logistics offers an opportunity for improving visibility and profitability while lowering costs across the supply chain. Knowing these potential risks can cause delays, it's imperative to plan accordingly. The reason is simple. That's up from an estimated $221.7 billion in 2015, according to a report from MarketWatch that year. Once a product has been returned to a company, the firm has many disposal options from which to choose. Finishing the remaining part and Submitting the two copies with a CD of softcopy on 24th September, 2010. 2021. December 21, 2021. https://assignbuster.com/the-impact-of-reverse-logistics-in-retail-industry/. In 2014, returns after Christmas were up15% and projected to continue rapidly growing as consumer habits shift. Lack of demand and oversupply was one of the biggest problems in the past few years. Interviews may be useful as follow-up to certain respondents to questionnaires, e.g., to further investigate their responses (McNamara,1999). Cookies Policy Different products may go through different routes; same products with different types of damages also may undergo different operations. Murphy and Posit (2000) have reported that recycling of materials, reducing consumption and reusing materials are the three most commonly utilized green logistics strategies. 1. It is essential to take into account reverse logistics because if handled correctly, it brings excellent benefits related to customer satisfaction, reduction on environmental impact, savings in production costs, allows us to offer a more competitive after-sales service, moderation of storage costs, generation of new sources of income, recovery of defective parts, among others. Design for recycling (DFR) has become an important dimension for some manufacturers in the recent times (Masanet, 2002). A company should know how to reuse or resell by doing some refurbishment. Now more than ever, planning and implementing a reverse logistics strategy is crucial. These problems include: Problem 1: Tracking Value - One major challenge is determining and tracking the value of the unit. Interpreting and formulating the relevancy of the collected data for making the supreme structure. At the time of return, information about the item and its condition may be entered into the retail stores information system, and forwarded to the returns processing centre (Ronald S. Tibben-Lembke and Dale S. Rogers, 2002). 5. Reverse logistics is how companies manage the flow of returned and excess merchandise moving through the supply chain. Retail stores and even other suppliers have exchange policies or payback policies which provides customer with an ease of exchanging goods and supplies, once these items are returned, it then goes to production houses for refurbishment or to see what can be done with them in order to reuse or resell them. Our essay sample database helps hundreds of students with their written tasks daily. Most firms handle the product returns process themselves and typically within the same facilities that handle forward logistics. A recent survey by Cowen and Co. warned thatinventory was above sales growth for many retailers in 2015, meaning another slice of revenue lost for retailers. Design for recycling (DFR) has become an important dimension for some manufacturers in the recent times (Masanet, 2002). Formerly, firms have been spending significant time and money in improving their forward supply chains while ignoring their potential reverse supply chains. We will be happy to hear what you think: [emailprotected]. A brand new system might have a value of $5,000. What is the importance of reverse logistics in cost reduction? Forward Logistics. Rent the Runwayssoftware algorithms keep track of over65,000 dresses and 25,000 accessories. Thankfully, today we have the right technological support in place to help us sail through many of these hurdles. The first policy deals with the recovery chain, that is, the flow of used products from consumers to recovery facilities. ContactMedelln, COCalle 12 Sur # 51 79Oficina 201Phone: (+57) 304 448 26 14E-mail: info@mekagroupcol.com, endorsed by National Conferenceon Weights and Measures. There exists a range of ordered sequencing that different companies adopt depending on which activities are engaged in by the firm. Refurbishing is working on the same product and enhancing and changing it from inside completely. 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