How to optimize Reverse Logistics

How to optimize Reverse Logistics

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Reverse Logistics (literallyreturn logistics) is "The process of planning, implementation and control of the flows of raw materials, semi-finished and finished products from production, distribution or from the point of use to the recovery point or the point of collection and distribution" (the definition is from the European Working Group).

Put more simply, the Reverse Logistic deals with the return of goods from the consumer (the most immediate example is returns) and in fact is configured as a 'reverse distribution' that leads the goods (and the information accompanying them) to travel in the opposite direction to normal activities logistics.

Having as its object the movement of goods across the territory, Reverse Logistics produces a non-negligible environmental impact, which can only be contained with the optimization of transport processes. For this reason the new European laws oblige the producers of goods to carefully regulate the return logistics. In other words, to define a sort of Green Reverse Logistics.

Definitely the Reverse Logistic, if optimized, it can play a fundamental role in the strategies of increasing turnover, productivity and sustainability (also environmental) of companies, thanks to the recovery of the highest possible value from the return of products in the face of a reduction in operating costs.

The strategic importance of return logistics for companies, it cannot ignore the design and implementation of an efficient logistics network, which allows to optimize the transport phase and at the same time to reduce the management costs connected to it.

But it is equally important to rely on the support offered by technology as regards the retrieval of information and the transmission of communications on the status of transport, in order to avoid uncertainty regarding timing and quantity and above all to ensure the traceability of the transport itself.

We said that the optimization of the Reverse Logistic it has positive implications not only on company operations, but also on the impact that the latter has on the environment and consequently on the 'social responsibility' of the company, as well as on its image. In an enlarged and inter-communicating scenario, the environmental impact no longer concerns only individual products but also the supply and distribution chain.

Technologies and processes of Reverse Logistics they must be based on metrics and disciplines capable of minimizing environmental impacts. In this respect, recirculation and recycling are of particular importance, thanks to their ability to reduce waste by converting emissions into immissions: both directly, through the return-reuse of goods, and mediated through recycled materials.

Tyco, a company specializing in integrated fire and safety systems, has developed a system of Reverse Logistics from a green perspective based on the implementation of a global recirculation and source labeling program that combines the advantages of hard label recycling with the commercial benefits of source labeling. With this program, products arrive in stores already protected against shoplifting and ready for sale.

It is true that labels must be returned to the origin, and this has an impact in terms of transport, but it is the lesser evil. A few numbers: the CO₂ emissions associated with shipping containers by ship range from 10 to 40 grams per tonne per kilometer (about 1/10 of the emissions generated per tonne by air transport). To give an example, driving a compact car for 20km produces about 18 times more CO₂ than shipping a pair of shoes from Hong Kong to Rotterdam (even though there are 18,000km here).

Then there is the transport by truck or train which produces 30 to 150 grams per tonne per kilometer (more than containerized by ship), but always in reasonable terms for light items such as rigid labels. This means that as long as those who carry out the recirculation make reasonable choices and follow established paths, the impact on the environment resulting from the return of the labels to the production source for recirculation will be insignificant.

Recirculating rigid labels at the source of manufacture therefore seems an excellent alternative to disposing of labels, both from an environmental and a corporate point of view. But to do so it is necessary that the processes of Reverse Logistics are automated to ensure reliable collection and distribution of information. Therefore a program is needed, and it must be scalable, to always ensure a high level of efficiency.

Video: Reverse logistics - explained (August 2022).