Distribution management

Dipanway Bhabuk

REVERSE LOGISTICS REQUIREMENT(Exide Industries (Auto Ancillary)

EXIDE

Definitions

Logistics (Forward)

“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

origin to the point of consumption for the purpose of conforming to customer requirements”

Reverse Logistics

“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 Activities

Handling of returned merchandise Damage

Seasonal inventory

Resell via outlet

Salvage of outdated products

Recycling and reuse Material reuse

Remanufacturing / renovating

Hazardous materials disposition

Return Percentages

Source: www.indianmba.com

Automotive Industry

Three primary areas:

Components in working order sold as is

Other components, such as engines, alternators,

starters, Batteries and transmissions are

refurbished before they can be sold

Materials are reclaimed through crushing or

shredding

Automotive recyclers handle more than 37% of the

nation’s ferrous scrap

Remanufactured auto parts market is estimated at $34

billion, annually

Exide Industries

The Company was Incorporated on 4th January of 1880,at Calcutta.

The Company Manufacture lead and electric storage batteries, Exide

motor vehicle batteries, Dagenite batteries and other batteries for

railway coaches under the name Exide Ironclad and Shednought, heavy

duty traction batteries, special batteries, for aircraft duties and for radio

and signal equipment; and also stationary accumulators as required by

power stations, telephone exchanges and other electrical installations.

Reverse Logistics Management Requirement

Avoidance

Preventive Measures:

• To increase Quality – minimize returns by defectiveproducts

• Return agreements with retailers / distributors

• Customer Service – providing toll-free numbers thatcustomers can call before returning products

Design its merchandise and systems in a manner that will minimize returns to prevent customers from sending purchased products back


GATEKEEPING

The screening of defective and unwarranted returned merchandise at the entry point into the reverse logistics process

Example:

- Exide retailers if they register the car manufacturer to whom the batteriesis sold and ask then to provide the car registration number with the customers name

- They can determine if the product is under warranty, and also if it is being returned inside the allowed time window


Compacting Disposition Cycle Time

• Important to know beforehand what to do with returned goods

• When batteries often comes back in to a distribution center, it isnot clear whether the items are: defective, can be reused, orrepaired so weather need to be sent to a service center ormanufacturer.

To reduce the amount of time to figure out what to do with returned products once they arrive


Reverse Logistics Information SystemsOne of the most serious problems that the companies face in the execution of a reverse logistics is the shortage of a good information systems. To work well, a flexible reverse logistics information system is required.

• The system should create a database at store level so that the retailer can begin trackingreturned product and follow it all the way back through the supply chain

• Information system should also include detailed information programs about importantreverse logistics measurements, such as returns rates, recovery rates, and returnsinventory turnover

• Useful tools such as radio frequency (RF) are helpful. New innovations such as two-dimensional bar code and radio frequency identification license plates (RFID) may soon bein use extensively


Zero Returns

• A program where the company in question does not accept returns from its customers.Rather, it gives the retailer an allowable return rate, and proposes guidelines as to theproper disposition of the items. Such policies are usually accompanied by discounts forthe retailer

• It passes the returns responsibility onto the Auto Manufacturer, while reducing costs forthe manufacturer or distributor


Remanufacture and Refurbishment

• Five categories of remanufacture and refurbishment:

The advantage to using reworked parts is felt through cost saving

1) Repair2) Refurbishing3) Remanufacturing

Make the product reusable

for its future purpose

Retrieving reusable parts from

old or broken products

4) Cannibalization

Reusing parts of products

for different purpose

5) Recycling


Negotiation

Financial Management

Outsourcing

• Negotiation is a key element for all parties of the reverse logistics process. Because of thenatural lack of expertise on product returns, negotiations usually are informal and approachedwithout formal pricing guidelines. Firms often do not maximize the residual value of returnedproduct

• The most difficult part of reverse logistic and also one of the most important• Returns are sometimes charged against sales. People in the sales department may tend to

fight returns and delay them as much as possible. Furthermore, accounts receivables areimpacted by returns

• Reverse logistic is usually not a core competence of the firm. In many cases, however, it makesmore sense for the firm to outsource their reverse logistics functions than keep those in-house.

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