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Reverse Logistics helps unlock the value in returned materials and components
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Posted On :
Mar-22-2011
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Article Word Count :
440
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Not all returned materials are returned because they are defective. They may be returned for several other reasons. In fact, anywhere from 70% to 85% of products in a reverse logistics chain fall into the No Trouble Found (NTF) category, i.e., products that are defects-free.
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About 8% of the revenue of high-tech companies is spent on managing reverse logistics, i.e., product and scrap material returns.
Not all returned materials are returned because they are defective. They may be returned for several other reasons. In fact, anywhere from 70% to 85% of products in a reverse logistics chain fall into the No Trouble Found (NTF) category, i.e., products that are defects-free.
A reverse logistics management company provides a number of product returns and service spares management services.
Product Returns Management
Product returns management identifies and eliminates reverse logistics management inefficiencies, and includes a number of stages:
• Testing & Screening: Materials are tested, screened and separated into three categories: 1. No Trouble Found (NTF); 2. No Fault Found (NFF); and Potential Warranty Returns (PWR). The NTF and NFF materials are eventually reintroduced into the market.
• Return Material Authorization Management: The warranty credits of the PWR materials are utilized. Quick sorting and processing are necessary to ensure greater warranty recovery. A reverse logistics company may even work with the original design manufacturer to help improve their QA processes.
• Service Parts Management and Recovery Logistics: Returns are tested, inspected and separated in the same way as the materials.
• Disposition: Materials and parts with no recoverable value or warranty credits are disposed of in an environmentally friendly manner.
Service Spares Management
Service spares management concerns itself with identifying, optimizing and managing inventory management issues:
• Lean Supply Chain Planning: Nonessential tasks in inventory management are eliminated. Benefits include the right numbers of spares, no obsolete inventory and no risky last-minute purchasing.
• Inventory Optimization: The right parts at the right time at the right place. Benefits include paying the right price for components and recovering substantial revenue from the liquidation of excess inventory.
• Product Reintroduction: NTF products are returned into the service parts supply chain for reintroduction into the market. Benefits include reduced inventory acquisition and scrap disposition costs.
• Risk Management Techniques: A company's overall inventory risk is identified, addressed and managed. Benefits include reduced overstocking issues and reduced risk of servicing bottlenecks and loss of revenue because of liquidated inventory.
• Vendor-Managed Reverse Supply Chain Inventory: The inventory can either be owned by the company or the vendor. Benefits include reduced overall risk and obligation . . . and reduced exposure to fluctuating inventory levels, market demands, and management costs.
• Kitting Solutions: A dynamic and forecast-driven kitting operation can help reduce costs, fulfill small requirements and optimize inventory management. Solutions include quality control, development, tracking, waste reduction and component reuse.
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Article Source :
http://www.articleseen.com/Article_Reverse Logistics helps unlock the value in returned materials and components_56725.aspx
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Author Resource :
Kristina Paul, writes content for Reverse Logistics, Service Spares Management and Product Returns Management. For more insight and further information please visit:- http://www.resolvebyarrow.com/
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Keywords :
Reverse Logistics, Service Spares Management, Product Returns Management,
Category :
Business
:
Business
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