A series of articles in IndustryWeek features reverse logistics. I have talked about reverse logistics in my previous posts. It is, in fact, transportation and logistics of returned products for disposal or value recovery purposes. Sometimes, the term is used also to include remanufacturing, which is indeed disassembly, test, and rebuild processes to bring the product into like-new condition, creating unnecessary confusion.
Whichever term is used, reverse logistics has a considerable impact on the bottomline of the firm. Consumer goods firms feels the pressure of returns more than capital goods companies. On average, reverse logistics operations, as David Blanchard reports based on an Aberdeen Group research report, cost about 100 billion a year in collection, transportation, and disposal of returned products, and lost sales. This makes up on average 3.8% of manufacturer’s profits and 9% of all sales on average. Among all these costs, it seems that companies are able to reclaim 64.8% of initial value of the returned products. How they can extract the value of these returned products are not specified in the article, but there are many ways: selling as-is in the secondary channels, remanufacturing and selling like-new etc… You can check this previous post on different policies used in electronics industry.
By the way, an article by Richard Kubin published in Electronics Supply&Manufacturing provide the readers with a comprehensive yet easy-to-read review of RoHS in different countries. Please read the full article here.
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