Resolving Use It or Lose It Budget Approach Research Paper

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Transportation and Distribution

Reverse Logistics in Transportation

In definition, reverse logistics is movement of products in a backward direction. It is the process of moving goods from final destination to create additional value or for their proper disposal (Rogers and Tibben-Lembke, 1998). Reverse logistics has gained importance amongst corporates across the world. Reverse logistics comprises of waste management of good and products in the backward supply chain. The practices of reverse logistics vary based on the business sector of operation, and the position of the various product channels. It is a practice in which organizations become more environmentally effective and sustainable through recycling, reusing and also decreasing the amount of materials employed.

Thesis Question: Examining the aspect of reverse logistics and its impact on transport and distribution. What are the sectors on which reverse logistics has tangible/intangible effect? What issues cause incidences of reverse logistics?

The move towards backward supply chain movement

More often attention is paid to the forward supply chain movement. However, in recent periods, with increase in problems like numerous returns and recall of products, impreciseness in consumer orders, product expiry and product and goods damaging, there has been a great need for emphasis on the backward supply chain movement. This trend has pointed towards the dependency of good and products on reverse logistics. Returns and recalls of products can be generally categorized into product overstocking, harmful products to the environment, product recalls and returns due to consumer dissatisfaction. Other factors include slow business distribution channels, poor managing of inventories, and poor product quality (Kabir, 2013). Owing to regulations on sustainability and the limitations in different markets around the globe, industries worldwide have been forced to turn to reverse logistics. This plays a great role in the transportation and distribution of products within the supply chain of an enterprise. Effective distribution ensures that the products reach the end-consumer in a timely manner and improves the level of consumer satisfaction.

The significance of reverse logistics in Transport and Distribution

Data indicates that reverse logistics has had great significance in the transport and distribution of different industries such as food and beverage and retail industries. For instance, the retail sector is prominent for its pioneering product return resolves and tenacities even in the course of extreme competition. In the food and beverage industry, some of the difficulties currently experienced include waste management, quality management, food supply consistency and stock estimation. Thus, there arises the need for fast and efficient transport and distribution of products in the forward supply chain management and demands for an effective backward supply chain management system for the food and beverage products. Reverse logistics has come to be a prescription to these difficulties (Vijayan et al., 2014).

Reverse logistics plays an important role in the distribution sector particularly in the distribution of non-food products. Moreover, reverse logistics is also useful in online products. To begin with, the distribution of non-food products and merchandises is predominantly done in a direct manner right from the central location of distribution all the way to the customer. A great deal of these consumer orders are directed as a means of hub and spoke schedules and setups of substantial package transporters or mail order institutions. Taking into consideration the fact that vehicles employed by these institutions transport and distribute plenty of a range and mixture of orders, they characteristically have insignificant load difficulties. This is in contrast to the other vehicles that transport and distribute dense distribution networks (Fernie & Sparks, 2009).

Moreover, for each of the aforementioned consumer order, there ought to be distinctive and detailed packaging at the central or focal points of distribution. This not only increases the dimensions and capacity of the packages within the supply chain enterprise but at the same time constitutes added space on transport vehicles in the reverse as well as forward distribution channels. As per Fernie & Sparks (2009), a projecting characteristic attained within these home transport and distribution channels is that irrespective of whether the order is made over the internet or directly from the reference book, there is a massive flow of reverted goods and products. According to statistics, typically one in three of non-food products delivered to the consumer household is reverted back to the manufacturer or retailer. This is indicative of the necessity and importance of reverse logistics. Reverse logistics can have an insurmountable impact on logistical operations that take into account the reclamation, examination, repackaging and redeployment of reverted goods (Fernie & Sparks, 2009).

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Consumer behavior and Reverse Logistics

The impressible incentive and stimulus for reverse logistics is driven by the prevalent consumer behavior patterns, which bring about shorter product life cycles and unpredictable food marketplaces. In addition to return of products that are damaged and defective, progressive return measures fashion rivalry in more than a few markets in addition to online selling, is an extra indication of the amassing demand and need for reverse logistics (Petersen & Kumar, 2009). Reverse Logistics has gained significance in transportation and distribution in the food industry, as the products are easily perishable. This calls for an effective transport and distribution of system to ensure timely delivery to the consumer. This also means assurance of the food sector to distribute products that are clean, safe and cannot have a negative impact on the health of consumers and the environment. In addition, the prevailing status and position of the industry is far from being effectual in this regard. Waste management is still a big problem in this industry as indicators show that every year, it is estimated that there is more than 1 billion tons food wasted and lost across the globe (Gustavsson & Otterdijk, 2011). This food wastage is attributed to different factors including surplus purchases, inadequate cataloging and storage guidelines, premature harvesting, unsatisfactory storage and transportation facilities, packaging shortcomings, manufacturing errors and improper consumer order taking dimensions and weights. In addition, figures show that in recent years, in relation to total food sales, household wastes constituted about 25% with returns of foods products constituting roughly 2% of total food sales. Taking this into account, there is an increasing need for reverse logistics as it encompasses the waste management of products (Gustavsson & Otterdijk, 2011).

The Way Forward

According to Mollenkopf (2010), in the prevailing economic setting, it is more difficult to manage the forward movement of products to consumers instead of considering the reverse movement. However, disregarding the reverse flow of products can bring about a lack of significant prospects for organization in difficult times. Effectual returns management can offer supplementary ways of constructively influencing a company's financial performance in addition to forming stronger affiliations with strategic customers. Returns have an adverse impact on consumer relationships. This is indicative of the growing importance of reverse logistics. Two crucial inter-connected aspects of returns consist of the basis of the returns and causes for the returns. In the context of a supply chain, product returns might emanate from the distributors and the retailers who represent the intermediaries. However, the returns might also come from the end consumers. Gaining an understanding as to why these product returns keep taking place helps ascertain prospects for improving supply chain processes and decision making (Mollenkopf, 2010). One of the key factors affecting reverse logistics is cost. The expense incurred in the management of reverse logistics is dependent on the time-period of product storage and the quality levels of product returns. Additional factors influencing reverse logistics include management of information systems, proper management of inventories and sufficient relations between different players in the supply chain. Adequate affiliations in the distribution channels of an enterprise are significant. This is for the reason that a lack of this coherence can instigate deteriorations in product quality (Vijayan et al., 2014).

Conclusion

In conclusion, with intensifications in difficulties such as abundant returns and recalls of products, incorrectness in consumer orders, product cessation and product and goods damaging, there has been a great need for emphasis on the backward supply chain movement. This has brought about the increasing significance of reverse logistics in the transport and distribution supply chain channels of enterprises. For instance, retailers of food and beverage products apprehend that the proper managing of reverse logistics has a positive influence on their business operations. Owing to the perishability of products in this industry, reverse logistics plays a vital role in the aspect of waste management. On the other hand, reverse logistics is also becoming beneficial in non-food sectors. This is particularly the case for online retailing where there has been a great amount of product returns with thirty percent of the retailed products being returned by consumers (Fernie & Sparks, 2009). This shows the growing significance of reverse logistics in transport and distribution and how this can influence the success of organizations.

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