| Why has reverse supply chain management become | | | | back to the stores from where they had purchased |
| so important nowadays? The main reason why | | | | the same. These stores ship back these shoes to |
| companies have started to give importance to | | | | Nike, where they are shredded and donated to make |
| reverse supply chain is because it reduces the | | | | basketball courts and sprinting tracks. This company |
| operating costs if it reuses its products or | | | | also donates yearly funds to build and maintain these |
| components. Most companies have started to realize | | | | courts. This is a way of advertisement because by |
| the importance of reusing their components or | | | | doing so, companies enhance the value of their brand |
| products, and as a result of this, reverse supply chain | | | | in the minds of their customers, which encourages |
| has become an important part and parcel of business | | | | them to purchase their products. |
| management. | | | | In order to successfully implement the reverse supply |
| Due to modernization in every sphere, there is an | | | | chain management systems, companies should make |
| increased demand for new and better products. This | | | | a change in their existing supply chain management |
| has resulted in the need to clear the distribution | | | | systems. The first and foremost step for setting up |
| channel more and more, requiring bringing back the | | | | a successful reverse supply chain management |
| obsolete, outdated or unserviceable items. A good | | | | system of a company would be to define the rules |
| example of this would be the case of "Xerox," which | | | | of the reverse supply system and to understand the |
| replaces or upgrades hundreds of office printers and | | | | areas where the reverse supply chain will make and |
| equipments, every month all over the world. | | | | contribute profits. |
| There are also cases where major companies were | | | | The focus should be kept on the expected business |
| forced to set up a reverse supply chain system due | | | | outcome of the reverse supply chain process, and |
| to environmental constraints and regulations. For | | | | only then the policies and procedures should be |
| example, since the year 2003, the European Union | | | | framed by the company in order to support the |
| has brought about a legislation that requires every | | | | outcome. There are many companies which accept all |
| tire manufacturers who have factories in Europe to | | | | types of returns, while some do not. For successful |
| arrange for the recycling of one used tire for every | | | | implementation of the system, a lot depends of the |
| new tire they produce and sell. Additionally there are | | | | type of the product that will be returned back. |
| some companies which are using reverse supply | | | | Therefore, while framing the return policy, every |
| chains as a part of their new business plans. | | | | company should clearly mention the type of returns |
| Most large manufacturers and technology companies | | | | that are acceptable to them. Mostly customers return |
| have after market services. This forms a substantial | | | | their products either for repairs or for replacement. |
| portion of their revenue. Due to fierce competition | | | | The dealers, retailers and channel partners return the |
| most industries and companies offer and provide | | | | goods due to excess supply or products which have |
| timely and efficient service to their consumers. | | | | reached their expiry dates. Some manufacturers also |
| Today companies and business firms have realized | | | | recall their products and equipments from the market |
| the potential of better management of the reverse | | | | or the consumers. |
| supply chain system because this requires higher | | | | Thus all companies should educate their customers, |
| customer service, which results in higher customer | | | | retailers, dealers and channel partners about the |
| satisfaction, and consequently a revenue opportunity | | | | return procedure of the goods and also establish new |
| for their business. Of course there some firms which | | | | points and channels for contact with them. This will |
| have set up reverse supply chain systems purely for | | | | go a long way in successful implementation of the |
| altruistic purposes. For example, Nike, the shoe giant, | | | | reverse supply chain management of the company. |
| encourages its customers to bring their used shoes | | | | |