Reverse Logistics Sustainability 201: Green is Lean

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.

Logistics

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.

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Reverse Logistics Sustainability 101: Greenification

In an ideal scenario, retailers and manufacturers would only experience the outbound pathway of a product. In the real world, the inbound pathway is a major component of business, and optimizing your reverse logistics pathways can result in massive resource savings.

Environmental awareness is nothing new for the manufacturing industry: factories are notoriously seen as polluters, and even the most conscious manufacturing processes consume resources. In the past, environmentally-conscious procedures were taken on as a burden – resulting either from external motivation (requirements imposed by new regulations) or internal ones (feeling a sense of obligation to helping, or at least not hurting, the environment). “Greening” was cost-prohibitive, and often didn’t provide much benefit from a productivity standpoint…until now.

The tides have changed. Currently, “going green” has just as many internal, operational benefits as it does external, societal ones. In fact, it is no longer seen as a burden, but instead as a potential competitive advantage. Green processes that were once exorbitantly cost-prohibitive to implement are now cost-effective, and their benefits are far-reaching. An improved community standing is an intangible result, but the money you’ll save and productivity you’ll reap are very real indeed.

This isn’t the first time I’ve mentioned how the reverse logistics pathway is one that’s ripe for optimization. But sometimes, the route to optimizing can be difficult to choose. Which processes will you focus on? What is the most lucrative change you can make? How much will it cost to implement X, and how much will it save you – and how long will it take for those savings to come in? Which of your most-used processes is contributing least to your productivity?

Market research is still key in making those decisions. Clear, accurate, and relevant data is and always will be critical for making the right choices. But the choices are still abundant, and still difficult to select. If you narrow your sights by deciding to focus on “greening” your processes, you make the specific pathways easier to choose.

The design and operation of supply chains has traditionally been based on economic impact: what will cost the least to operate and cause the most profitability? Even technological advances take a back seat, because their expense is often outweighed, at least in the short term, by the money they’ll save. But environmentally conscious procedures are different. Implementing green practices in your supply chain can improve the quality and reliability of products, improve your operational productivity, cut costs via energy efficiency, and improve the overall performance of your products. Clearly, this offers rippling effects like less returns, easier fault diagnosis of those returns, and major cost savings down the line.

Manufacturing and transport are the biggest contributors to waste, pollution, ecological disruption, and depletion of resources. This means it’s the perfect focus for sustainability. With such great opportunities for improvement, choosing the “greenification” of your reverse logistics pathway could give you a huge competitive advantage – economically and socially – and help to improve your standing for the long term.

To learn more about optimizing your reverse logistics pathway, visit Blumberg Advisory Group. With years of experience working with OEMs, retailers, 3PSPs and more, Michael Blumberg is your best choice for comprehensive analysis and a strategic solution.

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