| In today's highly competitive business environment, | | | | regulations. C Glenn Mauney, opines, "many countries |
| the success of any business depends to a large | | | | states have instituted regulatory requirements |
| extent on the efficiency of the supply chain. | | | | regarding recycling and product disposition that |
| Competition has moved beyond firm-to-firm rivalry to | | | | requires increased record keeping and tracking. For |
| rivalry between supply chains. Managers in many | | | | example, from 2003, European Union is bringing a |
| industries now realize that actions taken by one | | | | legislation that will require tire manufacturers |
| member of the supply chain can influence the | | | | operating in Europe to arrange for the recycling of |
| profitability of all others in the supply chain. | | | | one used tire for every new tire they sell. Some |
| Companies like Wal-Mart are trying to squeeze more | | | | companies are using reverse supply chains as an |
| costs out of their supply chain to offer everyday | | | | integral part of new businesses. |
| cheaper price to the customers. On the other hand, | | | | Reverse supply chains differ from forward supply |
| more and more companies are focusing on their core | | | | chains in information flow, physical distribution flow |
| competencies while outsourcing the rest. But without | | | | and cash flow. To manage reverse supply chain, |
| efficient and effective supply chain, companies | | | | companies need sophisticated information systems. |
| cannot benefit from outsourcing. | | | | Some of the technology involved in reverse supply |
| Supply chain is defined by The Council of Logistics | | | | chain is similar while in some areas the technology |
| Management as "the process of planning, | | | | used differs from that of traditional supply chain. |
| implementing and controlling the efficient, | | | | According to C Glenn Mauney, "depending on the |
| cost-effective flow of raw materials, in-process | | | | volumes and complexity of the returned goods flow, |
| inventory, finished goods and related information | | | | there is some information capture specialization and |
| from the point of origin to the point of consumption | | | | processing efficiencies in returned goods processing |
| for the purpose of conforming to customer | | | | that requires some unique systems." Technology |
| requirements." However, a company's supply chain is | | | | used in reverse supply chain such as real-time |
| not limited to delivering products to the | | | | inventory tracking system (bar codes and |
| end-consumers. What about the defective products | | | | sensors) are similar to that used in the forward |
| that are returned by the consumers back to the | | | | supply chain. On the other hand, Devangshu Dutta |
| company? | | | | said that activities such as warranty tracking or |
| Necessity of Reverse Supply Chain | | | | de-manufacturing of product is different. Agrees |
| The foremost reason behind companies giving | | | | Karen Peterson. According to her, "repair optimization; |
| importance to reverse supply chain is that it reduces | | | | slow moving inventory optimization; and reverse |
| operating costs by reusing products or components. | | | | logistics," are the areas where reverse supply chain |
| For example, previously, Estee Lauder Companies | | | | differs from forward supply chain. |
| Inc., used to dump nearly $60 mn worth of its | | | | In designing a successful reverse supply chain, it is |
| products into landfills every year. However, after | | | | important to know what type of product will be |
| setting up reverse supply chain it has been able to | | | | returned at which point in time at which place and in |
| reduce the volume of destroyed products by half. | | | | which condition. Hence, importance of data is |
| Companies have started realizing the importance of | | | | immense. C Glenn Mauney opines, "tightly integrated |
| reusing products or components; as a result, reverse | | | | automatic data capture, system directed disposition |
| supply chains are becoming essential part of business. | | | | support, unique receipt handling, credit processing, |
| "Retailers are facing challenges as returns policies are | | | | comprehensive and flexible reporting are some of the |
| becoming more lenient," opines Mike Nardella, Senior | | | | important functional capabilities in reverse supply |
| VP, Logistics, Return buy. C Glenn Mauney supports | | | | chain." However, the legacy systems or the standard |
| his views, according to him, "the increased emphasis | | | | enterprise resource planning systems used by |
| on new products and product "freshness" has caused | | | | companies are not effective to support these |
| a need to clear the distribution channel more often, | | | | functional capabilities. What is required is a data |
| requiring an efficient means to bring back obsolete, | | | | warehouse with extranet and intranet technology. |
| outdated or clearance items." For example, Xerox | | | | The author is an expert in wiring custom essays |
| replaces or upgrades hundreds of office printing | | | | dissertations in the field of marketing and operations |
| machines every month. | | | | management. He has been with the company for |
| In some cases companies are forced to set up | | | | some years as a senior writer. |
| reverse supply chains because of environmental | | | | |