Management of the hottest reverse logistics

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Management of reverse logistics in recent years, with the increasingly stringent environmental protection legislation and the continuous improvement of commodity return rate, western enterprises are forced to undertake more recycling products. Therefore, reverse logistics has received extensive attention in the Western business and theoretical circles

in the past, there was no relevant legislation in China to force enterprises to recycle their end-of-life products, and the return rate of consumers was relatively low, so people paid relatively little attention to reverse logistics. However, the increasing depletion of resources has prompted enterprises to replace the concept of "one-time use" with "recycling". The high return rate brought about by the development of e-commerce and online direct selling and the growing voice of "unreasonable return" from consumers also force enterprises to pay more attention to reverse logistics

reverse logistics in sales channels can be simply summarized as the organization's management of materials from customers, including the whole process from the recycling of used, returned or damaged products and packaging from customers to the completion of the final processing link. Generally speaking, when goods are returned by consumers, enterprises need to decide how to deal with these goods according to the situation

the starting point of reverse logistics and forward logistics is completely opposite, but the former is by no means the simple retrograde of the latter. There are great differences between the two, which are embodied in the following aspects

number of start and end points

the biggest difference between forward logistics and reverse logistics is the number of start points and end points. In forward logistics, products usually move from one starting point to multiple destinations. Reverse logistics is just the opposite. Products move from multiple starting points to one destination. This difference directly affects the management and operation of logistics. At present, the distribution centers of foreign multinational enterprises have dedicated return centers (CRC), where all products in the reverse logistics process will be delivered first, classified and processed, and then sent to their final place of ownership. Theoretically, if the return processing center and distribution center (DC) can be combined into one, storage, transportation and human resources can be used together, and finally reverse logistics and forward logistics can be fully combined. However, in reality, many enterprises choose to establish independent reverse logistics processing centers, high-precision amplifiers and other measuring components. Even if they use the same facilities as the distribution center, they also maintain two independent operating systems. There are two main reasons why it can meet the standards and get normal production: first, it can maintain the independence of the forward and reverse logistics operation systems, so as to avoid the trouble of meeting the common operation schedule at the same time. Moreover, if the distribution center is far away from the return processing center, the freight savings brought by combined transportation are also limited. The second reason is the difficulty of operation. Generally, the forward transportation is to arrange the delivery shop by shop according to a certain route, and the loading is also stacked according to the unloading order. If the return goods are recycled at the same time of delivery, these returns will inevitably block the next stop, that is, why can the electronic universal testing machine test all kinds of materials? Many people don't understand the new goods to be delivered, and the returns are mostly scattered, which is more difficult to unload than the new goods. This operation will increase the number and difficulty of handling, and also consume time

prediction difficulty

in typical forward logistics, enterprises only need to predict the future market demand. Each operation link is based on the prediction of the market, and the whole process is highly predictable. In contrast, reverse logistics is based on reaction, which is usually not the result of the company's plan or decision, but the response to the behavior of consumers or downstream members. Therefore, reverse logistics has greater uncertainty and more difficult to predict. For the reprocessing process of returned products, enterprises should not only consider the needs of consumers for these products, but also analyze whether the return source can be obtained, because reverse logistics is initiated by the final individual consumers, and individuals will be affected by many factors when deciding whether to return goods. Therefore, enterprises cannot know how many products they will recycle and the state of products at the time of recycling

however, the prediction of reverse logistics can rely on forward logistics, because usually, compared with forward logistics, reverse logistics always has a backward time lag. For example, product promotion can increase sales and return volume. When making promotion plans, the marketing department will also arrange relevant logistics work to ensure smooth sales. For reverse logistics, a good plan can also benefit it. Therefore, while promoting sales, the return management center should also prepare for the corresponding return disposal at the same time

cost visibility

the difference between reverse logistics and forward logistics in actual operation is directly reflected in the management cost of logistics. In forward logistics, although the current accounting system does not have a clear logistics cost account, the consumption of similar products can be recorded in the corresponding account, so the enterprise can roughly estimate the total cost according to various expenses. For reverse logistics, the cost content of returned goods (even the same kind) is extensive, and the accounting standards for the price and cost of various products are different. Therefore, the cost accounting of reverse logistics is very complex and controllable

the difference between the two in terms of cost is also reflected in the different proportion of various expenses in the total cost. In forward logistics, the product discount accounts for a large proportion of the cost, and the product discount varies according to the order quantity and order frequency. However, in reverse logistics, the biggest cost lies in the freight of goods recovered from retailers, because reverse logistics is difficult to achieve transportation scale economy, and it is not suitable for standardized handling (such as using standardized pallet transportation). The most troublesome thing is that the barcode or other identification marks on the damaged package are difficult to identify, which will directly affect the count of the quantity of each retail commodity. In order to avoid confusion, sometimes different retailers will be transported to return goods, which virtually increases the transportation cost. The processing cost of reverse logistics is also much higher than that of forward logistics, which is reflected in two aspects: on the one hand, the unit processing cost of small batch goods is higher than that of large batch goods; on the other hand, the processing of reverse logistics also increases the link of processing flow decision-making

in terms of holding cost, forward logistics is higher than reverse logistics, because in inventory theory, holding cost is calculated according to the percentage of product value, and it often takes weeks or even months for products to be purchased, returned to retailers, returned to the return processing center and finally returned to the market, which will not only devalue products due to damage, but also devalue products due to missing sales opportunities, Therefore, the value of returned goods is generally lower than that of new products, and its holding cost is relatively low

quality of products and packaging

products shipped from manufacturers are generally new products with complete packaging, which can be neatly stacked in pallets for centralized transportation. For small batch return transportation, it is difficult to find suitable pallets to realize bulk transportation. As a result, a large number of high-standard and messy bulk goods are stacked on cars, which is difficult to effectively realize economic transportation. Packaging can play a very good protective role in the transit process, and it is also easy to unload, stack and palletize. In contrast, most of the packages of countercurrent products have been damaged, so the transportation of returned products is much more difficult than that of new products. In the process of operation, the product is damaged because of the package. If the product slips during handling, it is easy to be damaged. Moreover, because the package has been damaged and cannot be stacked and transported, the product is more likely to slip from the tray or be squeezed

the function of intact packaging is also to identify the batch number and quantity of products. In forward logistics, we can make full use of packaging to realize the application of barcode and RF technology. For returned products, staff may not be able to obtain the required relevant information from the packaging, which increases the difficulty of picking and storage

clarity of transportation path

after the returned products are transported to the return processing center, their further destination is not clear, which is no different from forward logistics, because the products arriving at the distribution center are also in a temporary storage state before receiving the order, and they are delivered until receiving the order. The difference between the two lies in the different decision-making methods of sending to the destination. There is almost no need to make a decision on the delivery place of forward products, but only arrange the delivery time and place according to the order and the customer's requirements. Even in some cases (customized or docking delivery), the destination of the goods will be known when the goods arrive at the distribution center. Different from forward logistics, managers in reverse logistics need to spend quite a long time to decide the destination of various returns (as mentioned above), and also consider the special provisions of manufacturers to deal with returned goods, such as removing the identification of goods resold in the secondary market, which makes there are many choices and directions for the treatment of goods in reverse logistics

importance of delivery speed

in forward logistics, it is very important to deliver goods quickly and accurately according to customers' requirements. Customers are very likely to reduce orders or cancel all future orders simply because they are not satisfied with the services provided. In reverse logistics, there is usually no advance order, and the delivery speed and time are often decided by the manufacturer. No one will complain about these things, which is one of the reasons why most manufacturers do not pay enough attention to the return processing. It should be pointed out that although the value of returned goods is usually lower than that of new goods, and higher profits can also be obtained if they are handled in time, if they are left in the processing center for a long time because of neglect, they may be truly devalued. This is because, in addition to the appearance or the goods themselves are easy to be damaged (without good packaging), it may also be the "shrinkage" of use value. For example, if some seasonal or holiday goods miss the best sales opportunity, it is difficult to sell the products at the ideal price

inventory management

there are many theoretical studies on inventory management in forward logistics, but these studies are based on certain assumptions, and some assumptions are not applicable to reverse logistics. For example, the most commonly used economic lot size and reorder point methods in inventory management require that the supply is determined, the uncertainty mainly comes from the demand side, and it is assumed that the price is known; In reverse logistics, the supply is very random, and the sales price of returned products also varies greatly due to different treatment methods, which proves that the traditional inventory management model is not fully applicable to reverse logistics

another difference between forward logistics and reverse logistics in inventory management is the impact of the settlement date of the accounting statement on the inventory. Because most enterprises do not pay much attention to the value of returns and usually have the mentality of price reduction, in order to reduce inventory, enterprises will sell a large number of returns at the end of each quarter, even at a low price

information system application

unlike forward logistics, almost no enterprise will track the whole logistics process of reverse logistics. Because enterprises usually do not pay enough attention to reverse logistics, information systems

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