Best Practices in Reverse Logistics Management

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Best Practices in Reverse Logistics Management

Attention to the Reverse Supply Chain Finally Starting to Gain Hold; 12 Habits of Highly Effective Reverse Supply Chains

As the report notes, many, if not most, companies do not pay greater attention to reverse logistics issues because they dont well understand the true costs or potential benefits from improvement.

Many commentators and industry professionals have been promoting for years that it is time most companies paid greater attention to reverse logistics processes. For the most part, however, reverse logistics has occupied a very low place on the logistics priority list.

That is starting to change, driven in part by the connection between reverse logistics and green supply chain initiatives, growing regulation regarding disposal of hazardous materials and other areas that impact reverse logistics processes, and recognition by companies that there are, in fact, significant dollars to be saved by greater attention to reverse logistics issues. (SeeLogistics in Reverse Gear; also view our on-demandvideocastBuilding an ROI for Reverse Logistics).

Two industry organizations APQC and WERC – have recently partnered to do an in-depth analysis of reverse logistics best practices, published in a new report titledReverse Logistics: Backward Practices that Matter. The research was performed by analysis of two 3PLs specializing in reverse logistics, as well as the reverse logistics practices of McKesson and Raytheon.

The full report must be purchased, but an executive summary listing of the 12 best practices is available for free from the APQC web site (seeReverse Logistics Best Practices Executive Summary).

The 12 best practices identified are as follows:

Raise the awareness of the importance of reverse logistics to a high level in the organization.

Gain senior management support for reverse logistics efforts and build cross-functional teams.

Design detailed codes that can be used to track the reason for each individual return and use to eliminate the underlying root causes.

Develop a detailed disposition strategy for returned goods.

Build Clear Reverse Logistics Physical and Information Flows

Accurately assess the true cost of returns and reverse logistics.

Assign someone clear, ultimate responsibility for returns and reverse logistics policy.

Develop educational and collaborative process with supply chain partners.

Enable Process and Operating Systems

Ensure returns information is visible and traceable throughout the channel

Work with partners to develop joint reverse logistics processes and returns management initiatives

Focus on holistic processes to eliminate the silos that plague reverse logistics chains.

Craft Measurement Systems to Drive Results and Continuous Improvement

As the report notes, many, if not most, companies do not pay greater attention to reverse logistics issues because they dont well understand the true costs or potential benefits from improvement.

Why dont we pay more attention to reverse logistics issues. Will green supply chain initiatives and regulation finally drive more attention? Is there usually a strong ROI? Let us know your thoughts at the Feedback button below.

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