A New Shade of Green for Reverse Logistics

March 1, 2001
Today, there are many solutions to help you turn reverse logistics processes into profitable, even revenue-generating, operations.

A New Shade of Green for Reverse Logistics

In Ireland, there’s a glassmaking skill that results in art pieces that display 50 shades of green. Reverse logistics shares a trait with those art pieces, in that it, too, shows different shades of "green." Those few managers who implemented reverse logistics in the past usually did so because it was environmentally responsible. Today, the "green" factor has evolved to a bottom-line issue. E-commerce and customer demands have propelled return volumes to levels that demand every logistics manager’s attention. However, the new focus doesn’t negate the need for addressing environmental disposal issues.

Throwing product into landfills is becoming the option of last resort. New vendors and new opportunities are creating a robust reverse logistics channel that helps keep products in the commerce stream. Thus, you can be environmentally responsible and improve the bottom line of returns.

One option is to work with companies that promise total product life services. Some of these companies, like ReturnBuy, are fairly new. Others are 3PLs enlarging their core competencies.

The basic idea with these service providers is that your customer returns go to them and they handle notifying the customer and crediting his account, as well as "disposing" of the return in a profitable manner. This disposal can mean moving the product to other sales opportunities, such as auctions, outlets and Internet channels, or recycling reusable material. In many cases, these companies also offer indemnity from EPA regulations.

This third-party returns solution also offers an alternative to return-to-vendor and zero-returns programs.

Returned electronic items present special challenges. Not only are their life spans short and the time available for disposition through other channels limited, they can’t be simply thrown out in the trash. Not anymore. More states are enacting legislation on whether technical assets like printers, computers and even digital phones can go into landfills.

Raymond Communications, which tracks EPA legislative developments, recently reported that there were twice as many bills waiting for action in 2000 as in 1999. Some of those bills would order pay-in-advance fines on manufacturers who don’t create easily disposable products. The report also mentions that packaging fill will be affected by legislation this year.

For corporate users of technical devices, this activity also poses problems. International Data Corporation estimates that the purchase price of a typical technology asset is just 15 percent of the total cost of ownership. Clearly, there’s a need to find other uses for these "old" devices. For companies like Redemtech, the solution is to redeploy them. This company helps other companies reuse, resell, donate or recycle their obsolete devices. After repair or refurbishment, Redemtech often puts used equipment up for bid on its Web site.

(Here’s a neat solution for old cell phones: Some companies and support groups will take your old cell phone, program it to call 911 and give it free to women and children in abusive situations.)

Reverse logistics is colored many shades of green. It also has many facets. As your involvement in it increases, you’ll discover new ones, some of which are discussed in more detail in this special supplement.

Editor’s Page

Leslie Langnau

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