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Government concern for sustainability and manufacturers continuous endeavor to garner customer satisfaction are the key drivers of reverse logistics. Significance of reverse logistics is perceived from both economic as well as environmental perspective. To state it simply, reverse logistics stands for any operation that involves the reuse of damaged or faulty products after its refurbishment.
The report begins with an introduction section that gives a total overview of the logistics sector and its components. Thereafter, the section provides an elaborate understanding of reverse logistics as a service that the process of planning, implementing and controlling the efficient and cost effective flow of raw materials, in-process inventory, finished goods and related information, from the point of consumption to the point of origin, for the purpose of recapturing value of proper disposal. It also covers the difference between forward and reverse logistics for a clear understanding.
The introduction section is then followed by the market overview of reverse logistics market. The section demonstrates the current market size along with forecasted market size and growth rate that would be prevalent in the market till 2016. The section also deals with percent demand acquisition from the four zones of India along with the highest reverse logistics demanding sectors.
Market Research Report : Reverse Logistics Market in India 2012
1. Insert Cover Image using Slide Master View
Do not distort
Reverse Logistics Market – India
December 2012
2. Executive Summary
• The Indian logistics market comprises approximately A% of the global logistics market in value terms
• The reverse logistics market is currently valued at INR X1 bn and is expected to reach INR X2 bn in 20‐‐ at a
Market CAGR of X%
• The reverse logistics market is currently experiencing a major share of demand from A zone of India followed
by B zone of India
Need for • Possible Reasons for Return of Goods
• Reverse Logistics – With and Without
Reverse
LE
• Reverse Logistics Significance
Logistics • Reverse Logistics – Needs and Associated Benefits
Sectoral
Snapshots
• Retail Market
• Electronics Market
MP • Automobile Market
• Pharmaceutical Market
Drivers &
Challenges
Drivers
Sustainability SA
Government Concern for
Garnering Customer Satisfaction
Growing Consumerism among Indians
Challenges
Low importance given to returns management
Infrastructural bottlenecks
Warehouse space deficit
Economic Viability of Reusing Goods
Key Players
Competition Player A Player B Player C Player D
Player E Player F Player G Player H
REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 2
3. • Introduction
• Forward & Reverse Logistics: Comparison
• Market Overview
• Distribution Channel
• Need for Reverse Logistics
LE
MP
• Reverse Logistics Models
• Industry‐wise Outlook
SA
• Drivers & Challenges
• Key Issues
• Technology Adoption
• Recent Trends
• Competition
• Strategic Recommendations
• Appendix
REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 3
4. Logistics primarily deals in transportation and storage
operations and is significantly aided by value added services
LOGISTICS
SECTOR
TRANSPORTATION STORAGE VALUE ADDED SERVICES
Container Rail Transport Modern Warehousing
LE Freight Forwarding
Road Transport
MP Logistics Park
3PL/4PL
SA
Express Logistics
Inland Container Depot
Coastal Shipping Courier Services
Container Freight Station
Cold Chain
Reverse Logistics
Project Logistics Port
• The logistics sector comprises 3 major segments – Transportation, Storage and Value‐added services
• The growing Indian economy has a positive impact on players operating in storage and value‐ added services
segments, while in the transportation segment, container train and project logistics is projecting a promising future
outlook
REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 4
5. Need for reverse logistics is conceived primarily from
economic and environmental perspectives
SAMPLE
Economic Perspective
Process of planning, implementing and controlling the efficient and cost effective flow of raw materials, in‐process
inventory, finished goods and related information, from the point of consumption to the point of origin, for the
purpose of recapturing value of proper disposal
REVERSE LOGISTICS
Process whereby companies can become more environmentally efficient through recycling, reusing, and reducing the
amount of materials used
Environmental Perspective
REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 5
6. Reverse logistics market is on a gradual growth path with
manufacturers realizing its significance
Market Overview
LE
• The Indian logistics market comprises approximately f% of the global logistics market in value terms
• Growing Indian economy is having a strong impact on both forward as well as reverse logistics
P
Industry experts are of the opinion that approximately 4% to 40% of products go through a return journey
India has recorded an approximate return rate of m%
M
• The reverse logistics market is estimated at INR X1 bn in 20‐‐ and is expected to reach INR X2 bn in 20‐‐ at a CAGR of X%
A
• Automotive, retail, pharmaceutical and electronics are key sectors driving the demand for reverse logistics
S
Business houses spend approximately e‐f% of their logistics expenses on reverse logistics
• Reverse logistics essentially encompasses customer pick‐up, call center management of returns, warranty
management, repairing, refurbishing, repacking of returned items, and resale of refurbished items to the end customer
Market Size and Growth (Value‐wise)
INR units
1,500 X%
X6
X5
1,000 X3 X4
X1 X2
500
0
20‐‐ 20‐‐e 20‐‐e 20‐‐e 20‐‐e 20‐‐e
REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 6
7. Economic and environmental perspectives associated with
reverse logistics…
• Public interest organizations are operating in this space towards reusing and disposing
low value goods such as municipal waste which is expensive to recycle
Reverse logistics by
non‐governmental • Opportunity exists for NGO’s as it becomes extremely difficult for the government to
organizations
solely mobilize all waste material through reveres logistics
LE
(NGOs)
• Example ‐ SAAHAS, a Bangalore based voluntary organization, is committed to finding
P
solutions to problems related to solid waste management
M
Corporate self
SA
• In this mode, reverse logistics is established and managed by large manufacturers who
have the resources and available finances to execute its operations in this space
• Goods covered under reverse logistics operations include product returns (inventory
returns, warranty returns, damaged goods), product recalls, recycling, reuse of
owned materials, waste disposal, repair and remanufacturing
reverse logistics • Large amounts of initial investment is need to set up this huge and fragmented kind of
self owned reverse logistics operations
• Example ‐ Future Group has its own logistics setup which is providing reverse logistics
services to its indigenous companies including Big Bazaar, Pantaloon etc.
REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 7
8. SAMPLE
Industry‐wise Outlook – Summary
Auto
Industry
Consumer CURRENTLY Retail
Electronics
Industry
OPERATIVE Industry
Pharmaceutical
Industry
REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 8
9. Consumer electronics and durables segment is enjoying
increased demand due to technological advancements
Electronics Market – Overview Consumer Electronics and Durables
• The consumer electronics and durables market is C
growing at a phenomenal pace
• Young demographic population, rising disposable
INR bn
600
LE M% B
P
income, easy finance options along with growing
prominence of consumer electronics retail stores and 400 A
M
online retail industry are the key drivers for the
SA
industry 200
Consumer Electronics and Durables Market Segmentation 0
20‐‐ 20‐‐e
Consumer
White Brown Sales Trends in Consumer Electronics
Electronics
• Television sets
• Set Top Boxes P Q R S
•Microwave Ovens • Audio and Video ‘000
•Air Conditioners •Chimneys Players 7%
20,000
•Refrigerators •Fans • Personal
15,000 P2
•Washing Machines •Electric Irons Computers P1
• Laptops and PCs 10,000
•Juicers Q2
5,000 Q1
•Mixer and Grinders • Cell Phones R1 R2
• Digital Cameras 0 S1 S2
• Camcorders
20‐‐ 20‐‐
REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 9
10. Forward and Reverse Supply Chain in Electronics Sector
Raw Material
Landfill
LE
Forward Logistics Flow in Electronics Sector
Reverse Logistics Flow in Electronics Sector
Part Fabrication
MP Recycle
SA
Assembly
Remanufacture
Parts Assembly
Distribution Refurbish
Consumers Secondary Markets
(in case of resell due to outdating)
REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 10
11. Drivers & Challenges – Summary
LE
MP Challenges
SA
Low Importance Given to Returns
Drivers Management
Government Concern for Sustainability Infrastructural Bottlenecks
Garnering Customer Satisfaction Warehouse Space Deficit
Growing Consumerism among Indians
Economic Viability of Reusing Goods
REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 11
12. RLMS addresses core reverse logistics requirements that
SAMPLE
help in easy identification and repair of defective products
Reverse Logistics Management System (RLMS)
Process and Benefits
• A web‐based application that captures all commodity related information from warranty to final disposal
Process
• It is a configurable and scalable solution that enables after sales management of goods sold
• Cost of installation depends on the number of users and operation period allotted by the client company – the
cost may range anywhere between INR 1.5 mn to INR 4 mn as per the requirement
• The RLMS can be installed by either the manufacturing company or by reverse logistics service provider
• Improved customer satisfaction
• Reduced Turn Around Time
Benefits
• Advanced planning in warehouses
• Reduced transportation costs
• Advanced tracking functionality
• Decision‐making on product types and easy identification of defective parts
REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 12
13. Major Private Companies – Summary
Net Profit/Loss
1,600
Size of the Bubble represents Market
1,400 Capitalization in INR units
1,200 Player A
1,000
800
LE
600
MP
SA
400 Player C
200
Player B
0
‐200
‐400
‐2,000 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000
Total Income
Player A Player B Player C
REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 13
14. Public: Domestic Company – Player A (1/3)
Company Information Offices and Centres – India
Player A
Corporate Address 5th Road, 6th Street,
City A – 700 xxx
Tel No. 91 22 6679 xxxx
Fax No. 91 22 6679 xxxx
Website
Year of Incorporation
www.playera.com
19‐‐
LE
Ticker Symbol
Stock Exchange
53xxxx (BSE)
M
Bombay Stock Exchange
P City X Head Office
Products and Services
Category Products/ServicesS A Key People
Provides air, sea and road freight
Freight forwarding Name Designation
forwarding services
Planning and implementation of supply Person A MD
Logistics
chain solutions Person B CFO
Provides facility management, Person C CEO
Warehousing and
inventory management and material
Distribution
management solutions
REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 14
15. Private: Foreign Company – Player A (2/3)
Financial Snapshot Key Ratios
y‐o‐y change
Total Income Net Profit/Loss Particulars
(20‐‐to‐‐)
20‐‐ 20‐‐ 20‐‐ 20‐‐
INR units INR units Profitability Ratios
Operating Margin
250 ‐20
Net Margin
200 a Profit Before Tax Margin
‐40 Return on Equity
d
150
b c R4 Return on Capital Employed
LE
100 R3 Return on Working Capital
‐60
50 R2 Return on Assets
P
R1 Return on Fixed Assets
0 ‐80 Cost Ratios
20‐‐ 20‐‐ 20‐‐ 20‐‐
M
Operating costs (% of Sales)
Administration costs (% of
SA
Sales)
Financial Summary Interest costs (% of Sales)
• The company incurred a net loss of INR d units in FY 20‐‐, as Liquidity Ratios
Current Ratio
compared to net loss of INR c units in FY 20‐‐
Cash Ratio
• The company reported total income of INR R4 units in FY 20‐‐, Leverage Ratios
registering an increase of m% over FY 20‐‐ Debt to Equity Ratio
Debt to Capital Ratio
• The company earned an operating margin of f% in FY 20‐‐, an Interest Coverage Ratio
increase of g percentage points over FY 20‐‐ Efficiency Ratios
• The company reported debt to equity ratio of d in FY 20‐‐, a Fixed Asset Turnover
Asset Turnover
decrease of h% over FY 20‐‐
Current Asset Turnover
Working Capital Turnover
Capital Employed Turnover
Improved Decline
REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 15
16. Private: Foreign Company – Player A (3/3)
Key Business Segments Key Geographic Segments
A B
100% 100%
X X
50% 50%
0%
20‐‐
P
0%
LE 20‐‐
Business Highlights
Description News
SAM
Overview
Recent Transactions
Reverse Logistics
REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 16
17. Appendix
SAMPLE
Ratio Calculations Ratio Calculations
(Operating Current Assets / Current
Operating Margin Current Ratio
Income/Revenues)*100 Liabilities
Net Margin (Net Profit / Revenues) *100 {(Cash & Bank Balance +
Cash Ratio Marketable Securities) / Current
(Income Before Tax / Revenues Liabilities)}
Profit Before Tax Margin
*100
Total Liabilities / Shareholders
Debt to Equity
(Net Income / Shareholders Equity
Return on Equity (ROE)
Equity)*100
{Total Debt / (Shareholders
Debt to Capital Ratio
EBIT / (Total Assets – Current Equity + Total Debt)}
Return on Capital (ROCE)
Liabilities)*100
Interest Coverage Ratio EBIT / Interest Expense
(Net Income / Working Capital)
Return on Working Capital
*100
Fixed Asset Turnover Sales / Fixed Assets
Return on Assets (Net Income / Total Assets)*100
Asset Turnover Sales / Total Assets
Return on Fixed Assets (Net Income / Fixed Assets) *100
(Operating Expenses / Sales) Current Asset Turnover Sales / Current Assets
Operating Costs (% of Sales)
*100
Administration Costs (% of (Administrative Expenses / Sales) Working Capital Turnover Sales / Working Capital
Sales) *100
Capital Employed Turnover Sales / Shareholders Equity
Interest Costs (% of Sales) (Interest Expenses / Sales) *100
REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 17
18. Thank you for the attention
The Reverse Logistics Market – India report is part of Netscribes, Inc. Transportation &
Logistics Series.
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REVERSE LOGISTICS MARKET IN INDIA 2012.PPT 18