APQC Reveals How Forward-Thinking Companies Gain Maximum Value from Reverse Logistics

HOUSTON--The companies that reap the greatest benefits from reverse channels collaborate with their supply chain partners, and employ reason codes to identify and address problems that create returns. These are just a few findings from a study on reverse logistics released by APQC, a recognized leader in benchmarking and best practices.

APQC’s study, “Reverse Logistics: Backward Practices That Matter,” identifies ways to strategically leverage physical return channels and their accompanying information flow to improve profitability and enhance customer retention. An executive summary of the findings and full report are available at www.apqc.org/revlog.

The organizations chosen as best-practice partners were Carolina Logistics Services Inc.; GENCO Distribution System Inc.; McKesson Corporation (Pharmaceutical Distribution—McKesson Supply Solutions); and Raytheon Aircraft Company (Raytheon Aircraft Parts Inventory and Distribution). Each participant was selected based on demonstrated excellence in incorporating reverse logistics methodology into its business strategy and culture.

“Regardless of size or industry, our best-practice partners demonstrate the power of well-executed, effective reverse logistics and returns management approaches,” said Marisa Brown, supply chain senior program manager, APQC. “Successful strategies are implemented by aligned organizations and frequently supported by extensive networks of external partners, including suppliers and customers.”

The study investigated how successful enterprises structure their reverse logistics programs and examined how data obtained through well-managed reverse supply chains can be used to improve products, services and customer interactions. It uncovered a dozen universally applicable insights into how the organizations secure top-level buy-in for reverse logistics initiatives, communicate importance, involve internal and external stakeholders in implementation, and continuously improve to sustain results.

APQC’s study uncovered the following:

• Effectively assessing a reverse channel starts with understanding the underlying costs.
• Initiatives must be championed by senior management and supported by cross-functional teams.
• A successful reverse logistics strategy includes an integrated disposition strategy.
• Returns information should be visible and traceable throughout the reverse channel.
• Successful execution of desired reverse practices depends on a process focus rather than silo activities.

“Organizations are gaining competitive advantage by developing collaborative, strategic, cross-supply-chain efforts that reduce logistics costs, improve asset recovery and enhance post-sale service,” added Brown. “Such programs ultimately lead to innovative practices that improve customer satisfaction and loyalty.”

For additional free supply chain benchmarking and best practices visit www.apqc.org/sc or call 800-776-9676.