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Reverse Logistics
1. Reverse Logistics vs. Normal Logistics
Reverse logistics has been perceived predominantly as the process of product recycling. However, better and innovative perceptions concerning reverse logistics are evolving with the passage of time. CLM (Council of Logistics Management) defines reverse logistics as follows:
“The process of planning, implementing, and controlling the efficient, 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 or proper disposal”. Reverse logistics is completely different from the customary logistics, or the so called forward logistics activities.
Reverse logistics flow is essentially a different story altogether and is also completely opposite to the conventional forward logistics system. Companies normally do not start reverse logistics activity because planning and decision making rests on the firm.
2. Strategic ‘Pull’ and ‘Push’
Push marketing is the traditional style of marketing where the products and services are made available to consumers and are taken to them. The primary examples of this type of marketing are catalogues, brochures, direct selling, among others. In this form of marketing, the product or service is placed right before the customer, in order to ensure that the customer is thoroughly aware about the product/service’s existence. This type of marketing suits well for products that fall in the category of impulse purchasing.
Pull marketing strategy is a direct opposite of push marketing. In this form of marketing, customers are pulled towards the products and services, in the sense that instead of making the product available to the customer in front of him, pull marketing makes customers to seek out to the products or services. This kind of marketing strategy works well for new products or services. Referral programs, mass media advertising, sales promotions, among others are examples of pull marketing strategies.
3. Lessons learnt from the Beer Game
The Beer game is a logistics game that essentially simulates a supply chain with four stages namely that factory, distributor, wholesaler, and the factory. The game excellently brings all the various concepts of supply chain management to life. It helps in understanding the relationship that exists between the channel partners. An important set back by the name bullwhip effect is experienced during the beer game play. This effect is a result of predominantly three aspects; one is the lack of information, the supply chain structure, and lastly lack of collaboration. One important lesson that can be learnt from the beer game is about the bullwhip effect, both from the perspective of the game and also from the purview of the real world situations. The three fundamental reasons for the bullwhip effect, essentially form the crux of a supply chain coordination issues.
4. The concept of “Structure Drives Behavior”
The fundamental adage of the system dynamics is based upon the notion of structure drives behavior. The basic concept of feedback arises out of the specific notion of endogenous sources for the structuring of a system behavior. This very notion of structure drives behavior of systems thinking is crucial to solving numerous issues at an organizational level. Structural Thinking offers a vital premise in investigating the “why” behind present behaviors and eventually aide in the creation of new structures that yield improved results. Understanding the relationship that exists between the structure and the eventual behavior is the crux of the study of systems dynamics. The universal and resilient nature of the various behavioral obstructions to effective supply chain management suggests that improving the supply chain is difficult to repeat, further consolidation its ability to offer competitive advantage.
5. Secondary Market
Secondary market comes is part of the reverse logistics flow. From the customer’s end, a product might enter the secondary market on grounds that the customer is not happy with the product or the service, customer received a defective product, customer trying to exploit or abuse the company’s return policy that is liberal, among others. From the retailers perspective, products enter the secondary market because of it being a seasonal product, the packaging of the product being outdated, retailer exiting out of the business, the product has been pulled out from the market by the manufacturer, among others. When numerous modifications are made to the product, then the retailer might possibly pull the product out of the market and send it into the secondary market.
Works Cited
D.W. Krumwiede, & C. Sheu. "A model for reverse logistics entry by third-party providers." Elsevier, 30(5) 30.5 (2002): 325-333.
Johnston, Sarah Jane. What Drives Supply Chain Behavior? 07 June 2004. 29 October 2014. <http://hbswk.hbs.edu/item/4170.html>.
R.S.Tibben-Lembke, D.S. Rogers and. Going Backwards: reverse logistics trends and practices. Pittsburgh, PA: Reverse Logistics Executive Council, 1999.
Reimer, Dr. Kai. Bullwhip Causes. 2012. 29 October 2014. <http://www.beergame.org/teaching/bullwhip-causes>.
S.R. Dale, & S.T.L. Ronald. Going backwards: reverse logistics trends and practices. Reno: Center for Logistics Management, 1999.
