Reverse Logistics – the Opportunities outweigh the Challenges Complex and disjointed, but Reverse Logistics represents big opportunities for value creation. Reverse Logistics includes the key processes involved in moving product back through the supply chain to accommodate overstocks, returns, defects and recalls and is defined by the Center for Logistics Management at University of Nevada as “the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal”. For product returns, Accenture report that on average it takes 12 times as many steps to process returns as it does to manage outbound logistics. The additional steps include activities such as assessing, repairing, repackaging, relabeling, restocking, reselling, recycling and refurbishing, which can result in the cost of reverse logistics being four to five times those of forward logistics. However, best-in-class practitioners can directly correlate their reverse logistics expertise and systems to positive impacts on Customer Satisfaction, Brand Equity, Competitive Differentiation and Profitability. Reverse logistics is big business - in the USA it is estimated that manufacturers and retailers are now dealing with $100 billion of products goods being returned on an annual basis. Here in Asia, product returns are destined to expand exponentially, driven by two rapidly accelerating consumer trends – online shopping and the proliferation of electronic gadgets.

1. CEO EXECUTIVE SERIES! 23 JULY 2012
REVERSE LOGISTICS
THE OPPORTUNITIES OUTWEIGH
THE CHALLENGES.....
NEWS & EVENTS
Complex and disjointed, but Reverse Logistics
represents big opportunities for value creation
writes Mark Mi#ar, Logistics Executive Group.
Upcoming Event
Logistics Executive is an official
partner of the Asia Manufacturing
Strategies Summit 2012. This
exclusive event will take place in the
Ritz-Carlton Hotel, Millenia, Singapore
on 15th – 16th October 2012 and will
provide the opportunity to discover the
latest news and the best practices for
optimizing your manufacturing and
supply chain operations. The event is
packed full of real life case studies,
allowing you to benchmark your
business against ‘best in class’ and
ensure that you have the tools you
need to form a coherent and logical
strategy. To register please visit
www.asiamanufacturingsummit.com/
register.
Logistics Executive
Global News
Complex and disjointed, but Reverse Logistics represents big Logistics Executive appoints
Brian Cartwright as MD, Middle
opportunities for value creation. East
Reverse Logistics includes the key processes involved in Logistics Executive is pleased to
moving product back through the supply chain to accommodate announce the appointment of Brian
overstocks, returns, defects and recalls and is defined by the Cartwright as Managing Director,
Middle East and Africa. Brian has built
Center for Logistics Management at University of Nevada as “the a solid reputation in the region as a
process of moving goods from their typical final destination for leading recruitment professional within
the purpose of capturing value, or proper disposal”. the Supply Chain and Logistics Sector.
He had previously worked for Logistics
For product returns, Accenture report that on average it takes Executive when he moved to the
12 times as many steps to process returns as it does to manage region in 2008 and we are extremely
outbound logistics. The additional steps include activities such as pleased to be able to welcome him
assessing, repairing, repackaging, relabeling, restocking, reselling, back on board as a member of our
Senior Management team. Please feel
recycling and refurbishing, which can result in the cost of reverse free to contact Brian directly should
logistics being four to five times those of forward logistics. you require any assistance from him
However, best-in-class practitioners can directly correlate and his team.
Brian’s email address is:
their reverse logistics expertise and systems to positive impacts Brianc@LRS.ae
© 2012 LRS Group Pty. Ltd. All rights reserved! PAGE 1

2. CEO EXECUTIVE SERIES! 23 JULY 2012
o n Cu s to m e r S a t i s f a c t i o n ,
Brand Equity, Competitive
Differentiation and Profitability.
Re verse logistics is big
business - in the USA it is
estimated that manufacturers
and retailers are now dealing
with $100 billion of products
goods being returned on an
annual basis. Here in Asia,
product returns are destined to
expand exponentially, driven by
two rapidly accelerating
co n s u m e r t r e n d s – o n l i n e
shopping and the proliferation Graphic 1: Product returns vary by industry sector and type of product, with some
of electronic gadgets. typical return percentages by product type.
What types of goods are
being returned? the for ward supply chain, competitive product – another
companies could surely eliminate 39% of all returns.
Product retur ns var y by
many of these returns – for Ho w e v e r, i n p r a c t i c e ,
industr y sector and ty pe of
example Late Delivery, Missing companies do need to balance
product, with some ty pical
Pa r t s , Damaged, No t their acceptance of product
return percentages by product
Functioning – representing some returns in line with their
type summarized in graphic 1
46% of returns. philosophies and policies for
(see right).
Fu r t h e r m o r e , o n e co u l dtheir brand, warranties and
Why are products being
argue that additional diligence customer service.
returned?
during the sales and customer The complexity of reverse
According to the Reverse service processes may further logistics involves many more
Logistics Association, products reduce the volume of products transactions than the forward
are returned for numerous that are returned due to No supply chain and the various
reasons (as illustrated in graphic Re a s o n , D i f f e r e n t t h a n activities relating to product
2 below) Expected, Not Satisfied with returns will span across many
What is interesting about Performance, Did not want functional departments – sales,
these reasons for returns, is how Pr o d u c t a n d Fo u n d b e t t e r customer ser vice, finance,
by improving processes within warehouse, repairs and
transportation. For the majority
of these functions, product
Not#Func@oning# 23%# returns are likely seen as much
Damaged# 16%# more of an annoyance rather
Other# 14%# than a priority. However, with
No#Reason# 9%# effective returns management
Different#than#Expected# 9%# providing tangible opportunities
Not#Sa@sfied#with#Performance# 9%# for businesses to reduce costs,
Did#not#want#product# 8%# reco ver value and impro ve
Missing#Parts# 5%# customer service, appointing
Found#be<er#compe@@ve#product# 4%# one senior leader to be
Late#Delivery# 2%# responsible for all aspects of
0%# 5%# 10%# 15%# 20%# 25%# product retur ns wil l focus
attention and harness the
resources to capitalize on the
Graphic 2: According to the Reverse Logistics Association, products are returned for opportunities.
numerous reasons. Source: Reverse Logistics Association.
© 2012 LRS Group Pty. Ltd. All rights reserved! PAGE 2

3. CEO EXECUTIVE SERIES! 23 JULY 2012
There are typically five key transaction
elements of a reverse logistics processing and
ecosystem, involving multiple physical product
functions within the al locations are
organization as well as a number synchronized
of outsourced service providers: such that the
Customer Service – point of replacement
sale outlets, service centre or call product is
centre delivered at the
same time as the
Pr o d u c t Mo v e m e n t –
return product is
transportation providers
co l l e c te d . No t
managing the collection and
necessarily
return of products to a depot,
applicable to
outbound transportation and
every application,
delivery of replacement products
but particularly
Warehousing – centralized relevant in the e-
depots for receiving, sorting, commerce and
storing, picking and dispatching online shopping
Decision – inspection of sectors, the
r e t u r n e d i te m s i n o r d e r to synchronized
determine their disposition – ie swap can
what action is most appropriate significantly
reverse logistics is concentrated
to maximize asset recover y reduce costs by eliminating one
within one clearly defined point
potential transportation leg, whilst also
of leadership, which has the
Disposition – processing the increasing customer satisfaction
authority to manage across all
returned products, which could because the customer doesn’t
the internal silos within your
involve repair, return to stock, have to wait for replacement to
organization and who is the
refurbish, upgrade, recondition, be delivered.
central control point for all the
salvage components, sell to third Fi v e C r i t i c a l S u c c e s s external partners in the reverse
party, recycle or discard Factors logistics eco system.
Throughout this For best in class reverse 3.Va l u e – c o n t i n u a l l y s e e k
collaborative network of internal logistics, recommendation is for opportunities for value creation
and external service providers, businesses to concentrate on – both for your customers and
companies need to deploy these five key aspects that will for your company. Well managed
integrated and synchronized enable success in capitalizing on reverse logistics operations, with
processes, making reverse the opportunities: disciplined processes and
logistics a technology intensive 1.Vi s i b i l i t y – l e v e r a g e a committed customer service, will
business. However, effective common technology platform engender customer loyalty and
deployment of technology can across and throughout your s t r e n g t h e n b r a n d e q u i t y.
significantly improve efficiencies reverse logistics ecosystem, Effective and efficient reverse
and reduce costs, thereby providing one single view of each logistics operations, together
increasing profitability – one r e t u r n e d p r o d u c t ’s j o u r n e y with a diligent approach to asset
example being the Synchronized throughout the whole process. reco ver y wil l capture value
Swap. Adopt the Control Tower model within your organization that
One of the leading best to facilitate centralized can drive profitability and
practices in returns information management that competitive advantage.
management, the Synchronized enables end to end visibility. 4.Customer Ser vice – the
Swap is where one visit by the Collaboration involves an open trigger that activates reverse
transportation provider includes approach to information sharing logistics activities is when the
both collection and delivery. 2.O w n e r s h i p – e n s u r e customer experiences a problem
Leveraging the IT system, the responsibility for all aspects of with your product. Ensure you
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4. CEO EXECUTIVE SERIES! 23 JULY 2012
have well trained customer service increasing demand for traditional Logistics Executive
personnel and robust complaints customer service personnel to have
www.logisticsexecutive.com
handling processes in order to increased breadth and depth of
minimize pain and inconvenience knowledge about the supply chain Australia
for the customer. Furthermore, and logistics functions – Sydney
persistent but polite probing of combining technical expertise Phone: +61 2 8262 9800
the problem early during the with soft skills. Organizations Melbourne
customer complaint interface can therefore need to adjust their Phone: +61 3 9863 9488
often result in successful talent acquisition and retention
Asia
resolution, without needing to strategies accordingly, to ensure Shanghai
return the product – minimising they are attracting candidates with Phone: +86 21 6427 6697
down time, enhancing customer the appropriate soft skills, in many
Singapore
experience and reducing the cases from other industry sectors, Phone: +65 6692 9202
amount of costly returns that are and then rapidly training them on Hong Kong
no-fault-found. the technical aspects of reverse Phone +852 3125 7654
5.For ward Fundamentals – logistics. India
consistently be aware that Conclusion: Phone +91 22 4090 7053
meticulous attention to detail Reverse Logistics may indeed Middle East
across key activities in the forward be complex, but the opportunities United Arab Emirates - Dubai
suppl y chain can reduce the outweigh the challenges – Phone: +971 4 361 6275
burden on reverse logistics by persevere with overcoming the New Zealand
substantially reducing unnecessary challenges! Concentrated efforts Wellington
returns. on developing the soft skills in Phone: +64 4 496 6730
Customer Service parallel with enabling the
As both a key element and a infrastructure, transportation and
c r i t i c a l s u c c e s s f a c t o r, t h e technology platforms will
Customer Service component can empower value creation through For a copy of the 2012
often become the ke y customer satisfaction and financial Logistics Executive
differentiator within your reverse results. Learn more about Reverse
Global Employment
logistics ecosystem. Customer Logistics at the RLA Conference
s e r v i c e c a n m a ke - o r- b r e a k & Expo in Singapore this 25-27 Report email:
successful value creation and September – contact darrylj@logisticsexecutive.com
hence companies must deploy due markm@LogisticsExecutive.com or
diligence to the human capital or visit www.rla.org. kimw@logisticsexecutive.com
dimension. This results in
AUTHOR PROFILE:
MARK MILLAR 马克
Mark Millar leverages 25 years global business experience to
develop and deliver enlightening and informative Keynote
Presentations and to provide Consulting, Education and Advisory
services - creating value for clients by empowering superior
performance in their supply chain ecosystems.
Acknowledged as an industry thought leader, Mark has been
engaged by clients as Keynote Speaker, Moderator or Conference
Chairman at more than 230 events in 20 countries. Recognised by
the Global Institute of Logistics as “One of the most Progressive
People in World Logistics”, Mark serves as a Director of Logistics
Executive: markm@logisticsexecutive.com
© 2012 LRS Group Pty. Ltd. All rights reserved! PAGE 4