To get the most out of reverse logistics efforts, electronics OEMs need to create a closed loop system that maximizes product and material management. That can take time and effort, but can result in substantial return on investment.
“Typically, when an OEM, who has the biggest responsibility for reverse logistics and the largest investment in the supply chain, starts thinking about reverse logistics, they have no solution and feel as if they don't have time to mange supply chain and its functions, let alone have time to deal with the reverse supply chain,” said Linda Li, executive director and corporate vice president of the Li Tong Group, at the recent Hi-Tech & Electronics Supply Chain Summit.
At the same time, most recognize the importance of having a system in place. “With the proliferation of products, and explosion of devices, manufacturers realize that it is becoming a serious problem,” Li said.”Not taking it seriously is not just bad for the environment, it wastes a lot of money.”
Done right, reverse logistics can become a profit center. “When you advocate green programs, people think you are trying to get money out of them,” explained Li. “It doesn't have to be that way. Reverse logistics can contribute to the top line rather than being a cost.”
She outlines six steps involved in a closed-loop reverse supply chain:
- Consider methods of product acquisition needed to obtain the products from various supply chain entities (including contract manufacturers, parts suppliers, service centers, and raw material suppliers) and the end-users
- Put in place reverse logistics to move the products from the points of distribution to a point of processing
- Test, sort, and evaluate collected materials to determine the product's condition and the most economically attractive reuse option
- Enable the most economically attractive option, whether it is direct reuse, repair, remanufacturing, recycling, or disposal
- Collaborate with contract manufacturers, parts suppliers, service centers, and raw material suppliers to established closed- loop redeployment, reuse, reapplication of parts, components, and raw materials
- Leverage remarketing and asset management for maximum value recovery
Let us know in the comment section below how your organization is handling reverse logistics activities. What has worked for you?
— Hailey Lynne McKeefry, Editor in Chief, EBN
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