Logistics and supply chain professionals need to keep in mind that there is a bottom line angle to towing the “green” line. Dave Meyer presents some definitions of reverse logistics from a traditional versus sustainability focused mindset, and extended product responsibility.
by Dave Meyer, Sustainable Economic and Environmental Development Solutions (SEEDS) Global Alliance (Northwest Operations) and SVP of Greenbridge International, LLC. Follow Dave on Twitter @DRMeyer1 and LinkedIn.
I Love Logistics. That is the new brand “That’s Logistics” ad from UPS– and I love it. Why? First, because it’s a catchy ad and it made me smile. But also, because in the jingle, there’s a line: “carbon footprint reduced, bottom line gets a boost, that’s logistics.” This phrase should be a subtle reminder logistics and supply chain professionals that there is a bottom line angle to towing the “green” line. Read on and you’ll see why.
Today, consumers and authorities expect manufacturers to reduce the waste generated by their products. Therefore waste management has received increasing attention. Enactment of new environmental laws in the past several years—such as the European Union’s Restriction of Hazardous Substances (RoHS) and Waste Electrical and Electronic Equipment (WEEE) directives—are forcing companies to plan how they will retake possession of goods from end users at the end of a product’s life cycle. But in the face of these regulatory drivers though, being sustainable and environmentally responsible at the reverse supply chain arena is a complex issue. In the international and domestic marketplaces, laws and regulations have been implemented to regulate how manufacturers, collectors, recyclers, refurbishers and material processors should behave in an environmentally responsible manner. Recent movement in the area of electronics recycling and competing approaches for electronic waste management also underscores the challenges of reverse logistics to assure safe, responsible and ethical movement of end of life, post consumer goods
Putting a New Face on Reverse Logistics
Reverse logistics isn’t anything new. The field of study and application of reverse logistics in the supply chain space has at least a 40-year evolutionary history. What is new, though, is the intersection of reverse logistics with social and environmental issues.
Let’s start with a definition or two. Where primary distribution is the flow of products or goods from its origin to the place or point of consumption; reverse logistics involves a secondary channel flowing in the opposite direction. It can comprise such diverse transactions as returns, recalls, and waste management. At this point the product reaches the point of end of life when it consumes its intended value. A traditional definition of reverse logistics comes from Rogers and Tibben-Lembke[1]:
”The process of planning, implementing and controlling the efficient, cost-effective flow of raw material, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing or creating value or for proper disposal.”
A less traditional view now being taken more seriously from a sustainability perspective is:
The process of collecting used products and materials from customers to be reused, recycled, or upcycled into other products. This process treats these materials as valuable industrial nutrients instead of disposed of as trash. This is the complement to the traditional supply chain, [logistics] and distribution system used to produce and deliver products to customers. Sustainability Dictionary
This definition supports the realization of a true “closed loop supply chain.” Closed-loop supply chains emphasize the importance of coordinating the forward with the reverse streams. This underscores certain aspects of the cradle to cradle (C2C) concept advanced by McDonough and Braungart[2] and the idea of “extended producer responsibility.” And that is precisely why supply chain and logistics professionals can take a move or two from the C2C playbook and apply their trade–in reverse.
To follow the goods during from design to end of life management then creates many advantages to manufacturers and to end users in the secondary market, such as:
- 1. Increasing the types of services to the customer and added revenue streams;
- 2. Tracing the life of the product and gathering information related to the life of the product;
- 3. Maintaining contact with the customer contact for longer periods of time, thereby increasing brand fidelity;
- 4. Managing the activities of recovery in definite periods;
- 5. Stimulating up-selling;
- 6. Checking the state of the sales or returns in real time
In Part 2, I will present some compelling case studies that demonstrate the value-added characteristics of reverse logistics. Then I will offer up some tips on key questions you might ask to get started on reverse logistics planning and implementation, and who should participate in the process ________________________________________
[1] Going Backwards: Reverse Logistics Trends and Practices Pittsburgh: RLEC Press, 1999
[2] Cradle-to-cradle design: creating a healthy emissions strategy for eco-effective product and system design, Michael Braungart, William McDonough, Andrew Bollinger, Journal of Cleaner Production 15 (2007) 1337-1348
