Go Reverse – Go Green

Today, many companies are focused on going “green” and pursuing corporate sustainability. Various strategies and approaches exist through which a company might consider expanding its focus in this arena. Consider the area of Reverse Logistics as one possible arena to explore.

Reverse Logistics is often absent from “a seat at the adult table” when it comes to a company’s priorities, but consider the following statistics from a well known Retailer in the United States. During the last 12 months this company processed over 6.7M retail returns representing some $146M in value. So why no seat at the adult table? Because…the $146M represents less than 4% of the company’s overall retail sales. Consider that if you extrapolate the data from this one client, and assume a similar return rate, across the other top 5 domestic Retailers, returned units exceed 780M, annually, representing some $17B of goods being returned through the reverse supply chains. Clearly this level of activity is worthy of increased visibility, vigilance, and respect!

Still not convinced? Let’s take a look from a sustainability perspective. Assuming a standard return process of retail store consolidation, transportation to a national returns center, processing at the returns center, transporting to the original Manufacturer, and processing at the Manufacturer, a minimum of 17 transactions occur representing some 15-17 people involved for each return. Using the 780M products, and the 17 transactions, you can get a sense of the resource and energy investment to package, handle, transport, store, manage and administrate this return process. Still not convinced? Consider that many Retailers have relationships with overseas Manufacturers thereby increasing the number of transactions, distance, time, energy investment, and administrative complexity from exporting products for repair or replacement.

So what’s the opportunity? The opportunity is to apply intelligence in assessing the value of these products, cost of processing, energy required to do so, and find the optimum balance of investment and return on behalf of all involved parties. The opportunity is to look more holistically at retail reverse logistics processes, view the process from a perspective of energy consumption, bring Retailers, Manufacturers and Logistics Providers together, seek new ways of removing touch-points, decrease transportation segments, and decrease the time from store return to product resale. With today’s ever shortening retail product lifecycles, the opportunity is to speed the time from return to resale using creative methods and transform waste into profits.

The staff at ASIL is experienced in orchestrating Retailers, Manufacturers, and Logistics Providers to find new ways of banding together to remove touch-points, improving effectiveness of sustainability efforts, and increasing collective profits. We have a proven track record of pragmatic solutions and welcome the opportunity to serve you and your clients. Call us today and let us help you achieve new areas of profitability and success in this ever changing economy and world climate.

Contributed by Warren White