JANUARY 23, 2014

BREAKOUT SESSION2:15-3:00

ATLANTA, GA

How Non-Profit Organizations can Aid the

Reverse Logistics Process

Some Terms and Definitions:

1. Non-Profit Organization -NPO –is an organization that uses surplus revenues to achieve its goals rather than distributing them as profit or dividends.

2. Triple Bottom Line- TBL-adds two more “bottom lines,” social and environmental concerns. All three together are often paraphrased as: Profit-People-Planet.

3. People with Disabilities-PWD-Disability is a consequence of an impairment that maybe physical, cognitive, sensory, emotional, developmental, or some combination of these.

4. Corporate Social Responsibility-CSR-is a form of corporate self-regulation integrated into the business model. CSR Policy functions as a built-in self regulating mechanism whereby a business monitors its active compliance with the spirit of the law, ethical standard, and international norms.

What are Corporations doing now with Nonprofits and the disabled?

OEMs-Retailers, 3PLs, Liquidators, and CPGs all utilize nonprofits/employ the disabled: Forward/Reverse logistics operations.

Wal-Mart: E-recycle Initiative- utilizes non-profit network. Also, have a goal of hiring 100,000 disabled veterans

Canon: Accessories-parts-re-kitting and various RL operations Dell: Recycle computers-Goodwill Industries Target- Australia utilizes Disability Works Australia. (DWA) Walgreen’s: DC and store operations, and Lowes: DC- operations P&G: Flexi-Center-Tambrands- Auburn, ME- 30% total

workforce- (Have a Physical or Developmental Disability) The Conference Board: Leveling the Playing Field: Attracting,

engaging and advancing people with disabilities- More case studies

Why Utilize Nonprofits in (RL) Reverse Logistics ?

Problem:The three key issues with Reverse Logistics:

Sustainability, Risk mitigation and optimizing product recovery values.

Labor + Transportation costs are the main cost factors in RL.

Solution: There are over 2,400 service providers in the nonprofit

network in the US. (map-slide 20) Reduce freight spend by using these sites and locations. Untapped Labor Force: Unemployment rate among people

with disabilities (PWD) is 80% PWD excel in repetitive, and rouge process work The operations and dollars can stay within the US

What are the Numbers?

There are some 566,188 Intellectually Disabled and Developmentally Disabled people getting services in the US. (2011) (ICI –UMass)

Only 20.1% of these folks are working in an integrated employment setting. (ICI-UMass)

The current unemployment rate with people with disabilities is near 80% in the US.

Over 50 million people in the US have a disability. This customer market segment is often overlooked and represents a total of 247 billion dollars in annual disposable income or purchasing power.

Nonprofits have a dedicated workforce to get your projects done… on-time

The Reverse Logistics Industry needs to change its thinking !

Insanity: Doing the same thing over and over again and expecting the different results.

- Albert Einstein

Scope of the Opportunity: The Employment Gap

RL market size and segments: The Need

What areas in the RL process can they help?

Warranty Mgmnt

Returns Receiving and Discrepancy Management

Regulatory and Standards

Compliance, and Security

Liquidation, Asset

Recovery and

Recycling

Business Analytics and Reporting

Parts and Procurement

Planning

Transportation In Repair / Refurb

Warehouse and

Inventory

Screen, Test and Diagnose

Order Fulfillment Transportation Out

Recall Management

Waste and Hazardous

Material Management

Order Management

(Repair, Replacement, and

Sales)

Claims, RMA, Trade-In, and

Status Management, Entitlement,

Facility Routing

Customer, Call Center, End User, Channel Return,

Store Return

Warehouse and

DispositionDefectives

Financial Management

Complete Order Event

Inventory Management

Harvest, Dismantle,

Salvage

Component, and Packaging

Inventory

Revision 2.0 4/8/10

Universal Reverse Logistics Flow

Product Management

What are the 10- R’s in Reverse Logistics?

Top 10 Reasons:What do Nonprofits bring to the

Party?1. On-Demand, large labor force that is cost effective, and typically is a

budget neutral or better solution.2. Added flex space /capacity and act as a node or satellite returns location to

reduce freight spend in RL which is a high-cost factor.3. High-touch jobs and high-velocity jobs you can outsource.4. Great way for a company to demonstrate Corporate Social Responsibility.5. A unique way to achieve the Triple Bottom Line.6. RL can not be fully automated and still requires touches in the process.7. Level 1 types of operation like -plug-in play. Pre-screen before products

get sent to a repair depot or facility with higher labor costs.8. Easy to integrate IT systems- keep product tracking and flow visible.9. Non-profits have been doing RL operations for decades and doing the

operations required in reverse logistics is their core competency.10. RL is a non-core activity that should be outsourced. Nonprofits do many of

the common RL functions very well. (slides 12-13)

What are some examples of the RL Processes operations that Nonprofits do now?

Compliance functions: 100% Auditing, QC, sort & report, inspection, triage and gate-keeping etc.

Re-Packing, sorting, and high-touch operationsLight assembly, disassembly, and reworkShrink wrapping, labeling, bagging, and kittingSustainability programs, take-back/salvage projectsClosed loop re-use and recycling programsPlug n Play, and level 1 triage operationsFood Reclamation centers and reuse facilities

Other RL Service Activities/Processes:

Dealer/Retailer Stock CreditStock Balance Returns- A-Stock and B-StockRefurbishing, Recycling, and de-manufacturingFulfillment–prep for resale to secondary channels Re-boxing, and WarehousingNew Product recovery, and accessory recovery Inventory disposition, sorting and waste recoveryDe-facing- ensuring returned products do not end

up back into retailers systems at full credit.

CASE STUDY: Process Steps-RL Functions:

Non-profit Providers & For-Profit Providers roles are similar

Nonprofits have many capabilities and capacities to leverage

Nonprofits have new operations and facilities to grow your business

models

Image Microsystems:Printer remanufacturing

Point of Purchase-(POP) Displays: Briggs & Stratton

Where are the Nonprofit Service Network Providers located that provide jobs for people

with disabilities?

Dispelling the MYTHS: The Facts

Walgreen’s -Data Analysis Findings: 1. Productivity: There was no difference in picking rates for people with disabilities than the

rest of the workforce.2. Turnover: Turnover for people with disabilities was 48% less than the rest of the workforce.3. Safety: In every measurement, people with disabilities were safer and costs were lower.

(based on the four metrics below) A. Relative incidents-accidents per 1,000 motion hours.B. Relative comparison of incidents/accidents/1,000 hours. C. DART and OSHA Recordable.D. Workers Compensation Costs Per Case.

Sears: Costs to Reasonably Accommodate: 1978-1996 data: The total 436 people during this period: 69% of these were $0. cost, 28% were less than $1,000. and only 3% cost over $1,000 -to make worksite accommodations.

1.

Best Practice: Walgreen’s five-prong approach with

Corporate Social Responsibility (CSR)

2013: Diversity Inc-Top 10 Companies for hiring People with Disabilities

1. Ernst and Young2. Proctor and Gamble3. IBM4. KPMG5. WellPoint6. AT&T7. Kaiser Permanente8. Prudential Financial9. Microsoft10. Accenture

When Marketing IS Strategy:

Summary

The Nonprofit network and its labor force in the US is a hidden but an untapped asset & outsourcing resource for the reverse logistics industry.

Nonprofit is just a tax status. They do the many of same types of operations/functions and process steps in RL as the For-Profits do.

You can create jobs or create inclusion for PWD within your operations.

The entire RL process will never be completely automated and labor is needed. Nonprofits offer a cost effective solution for companies to achieve their zero waste/sustainability goals and objectives.

Strongly encourage industry to tour nonprofits doing RL functions and explore doing potential pilots, partnerships, and collaborations.

In Closing….

1. Want to explore innovative ways to streamline your RL process, minimize your costs, and increase the recovery yields on your products?

2. Want to proactively embrace your company’s CSR policies?

3. Want great customer service and the employees of your logistics vendor/partner to “truly” love and appreciate working for you?

If you answered “YES” to any of these questions, then you need to reach out to a nonprofit service provider and explore how they can leverage their resources to help your company.

A letter from Randy Lewis-Walgreen’s

Creating jobs for people with disabilities makes everyone smile

Where do I get more information?

Thank You

Brian F. Eddy, MBAGM, Business Development & Marketing

The ReHabilitation Center (716) 375-4730, ext. 353 beddy@rehabcenter.org

www.subconindustries.com www.rehabcenter.org