As I mentioned in my previous post, the “Greenification” of Reverse Logistics is a critical opportunity. While going green traditionally was viewed as an expensive transition with little ROI, today the tides have turned quite a bit. Currently, green initiatives can be seen as wholly beneficial – saving time, money, and the environment in one fell swoop.
I want to discuss how implementing green processes in reverse logistics can in fact create a tighter, leaner, and more cost-effective reverse pathway. In fact, going green has tangible benefits for many key areas of the reverse logistics process, including the following three.
Returns Prevention and Reducing NFF
Studies indicate that consumers would rather do business with a “green” company, but that they aren’t willing to pay significantly more money for that benefit. As I mentioned in my previous post offering possible solutions for No Fault Found, one potential solution could be to improve the returns process by including the consumer more – something that is often neglected by retailers who would prefer to limit customer involvement as much as possible for fear of aggravating them and sacrificing customer satisfaction. I posited that a little disclosure might go a long way, tapping into consumers’ sympathies by indicating reasons why certain information was necessary.
The implementation of green initiatives is the perfect time to put those ideas into practice. Recall that consumers would rather do business with a company they perceive to be environmentally conscious. Customers are looking for businesses that are attempting to lessen their carbon footprint, and are sympathetic to the need to eliminate wasteful practices. Reduction of NFF returns is possible if there are consumer incentives involved in returns policies.Preventing returns has obvious benefits to the reverse supply chain, including lessening the burden of excess volume.
Some of the ways businesses can optimize their reverse logistics pathways are actually the same ways to go green. Relocation of warehouses and repair depots can help significantly cut down on time spent in transport, fuel consumption, and carbon emissions. One centralized regional location can reduce fuel consumption, cutting costs while improving the impact on the environment.
Additional beneficial areas include customer satisfaction (locations closer to customers enable expedited service and returns) and improved turnaround time. Faster resolution to problems promotes customer satisfaction.
Repair, Reuse, or Liquidate
When an item is traveling along the inbound pathway, some major decisions need to be made. The OEM needs to consider the revenue potential of selling items as repaired or refurbished units or disassembling them for scrap.
Disassembling items can yield an abundance of usable parts, which can be saved to eliminate the time and money it takes to repair future distressed products. A good strategy must be implemented to address the usability of parts, forecast need for spare parts, and determine the necessary treatment for those parts to be used most efficiently.
Of course, this optimized efficiency of parts contributes to a lessening of eWaste. Discarding less useful parts immediately and saving the most useful ones helps to reduce the amount spent on finding the necessary parts for repairing/refurbishing later products. As an added benefit, lower parts inventory improves warehouse energy use and emissions.
Companies have a unique opportunity now to optimize their Reverse Logistics pathways. Supporting initiatives to “go green” means bringing new efficient practices and cost savings to a much-needed facet of business.
To learn innovative ways to optimize your Reverse Logistics pathway, talk with the experts at Blumberg Advisory Group.