A Case On Reverse Logistics of Plilips Consumer Lifestyle

A Case on Reverse logistics
of Plilips Consumer Lifestyle
GROUP MEMBERS:
SR.NO.
NAME
ROLL NO. MARKS
RAJ SHAH
36
TANMAY TILLU
45
UTSAV SHAH
38
RAJ SANGHVI
21
SANJAY YADAV
57
RAJAN GUPTA
14
SAGAR PARMAR
KEY PROMBLEMS FACED BY PHILIPS

CONSUMER LIFESTYLE
Sales returns results in heavy loss, mainly sales returns are
due to damages during deliveries & logistics.
Transportation cost & labor cost during sales returns are the
major causes of loss.
Main focus is to improve after sales services & improve
efficiency of reverse logistics.
Policies framed for reverse logistics were good but
implementation was totally manual & on the part of the
employees was laborious.
Procedure of reverse logistics apparently is a little
complicated for all vendors & customers so to make it
simplified is a little time consuming & expensive affair.
Reverse logistics involves a very lengthy paper work as the
entries are maintained manually.
INTRODUCTION
Reverse logistics is one of the most often overlooked
elements of the complete operations cycle. These experiences
and observations are precisely why
We commissioned this paper: we want to highlight how high-tech
companies can
Realize near- and long-term benefits by taking control of their
reverse logistics supply Chain and making improvements no
matter how small.
If you are still skeptical about the role reverse logistics
can play, think about your own experiences as a consumer and a
customer. Would you prefer to do business with a company that
has an efficient returns process with established policies? Would
you rather buy from vendors that give you flexibility to return
products without penalties and provide a quick replacement or
refund? If you recognize that your organization could improve in
these areas, we encourage you to review the reverse logistics
self-analysis featured in this paper. Determining the current state
of your reverse logistics capabilities is the first step on your way
to creating better business processes, more satisfied customers
and future success.
It is no surprise that almost every company is looking for
ways to increase sales, decrease costs and Reduce risks. But in
such tough economic times, the easy cuts have been made and
all of the simple process improvements have been put in place.
Enter reverse logistics, an often overlooked process that can help
companies reduce waste and improve profits.
Reverse logistics is defined as the processes of receiving
returned components or products for the purpose of recapturing
value or proper disposal. Reverse logistics processes and plans
rely heavily on reversing the supply chain so that companies can
correctly identify and categorize returned products for disposition,
an area that offers many opportunities for additional revenue. It is
much more than simply counting defective items returned by
customers.
If ignored, critical reverse logistics functions can cost
companies millions in lost profits due to damaged customer
relationships and external liabilities that could have an enormous

impact on their business. Effectively managed, however, reverse
logistics can enable organizations to find hidden profits, improve
customer satisfaction and minimize liabilities .
Reverse logistics is a broad area and, in this particular study, we

focused on the management of retail returns. Our particular
objective was to view the management of the reverse logistics
process from a holistic supply chain approach rather than just
something which started after the point of sale (see Figure 1).
R
e
R
c
e
y
tc
u
l
re
n
C
o
n
c
U
se
ep
t
D
e
sM
ia
gn
nu
f
a
c
u
r
(Figure 1)
Alternatives
The ICE model provides a way forward for managing product
returns. At the centre of the approach is a hierarchy of product
disposition (Carter and Ellram (1998):
Reduce
Re-Use
Recycle.
Reduce will lead companies to examine how they can reduce
returns arising in the first place through the better management
of the supply chain.
Re-use will lead to organization maximizing the asset value of
returns through effective refurbishment programs and disposition
through traditional and emerging novel secondary routes to
market.
Recycle is the lowest disposition route and refers to the
environmentally best route for recovery of material from products
that cannot be resold.
To be effective in utilizing this disposition hierarchy, Bernon and
Cullen (2007) suggested that companies need to incorporate
three management approaches, namely:
Integration
Collaboration
Evaluation.
Integration considers the four themes of strategy, network
infrastructure, outbound and returns management and process
management.
Collaboration emphasizes the need to develop a number of
collaborative arrangements to manage final product
dispositioning effectively. Collaboration may be with third party
logistics operators, through shared services and with
competitors.
Evaluation recognizes that in order to support product return
programs, companies need to evaluate their performance.
In our previous research on this area, few companies measured

the true costs of returns since they did not consider opportunity
costs (e.g. working capital tied up in returns).
We suggested that a total cost approach should be adopted by
organizations to determine the true cost of returns in order to
improve decision making.
After developing the ICE model by both the Department of
Transport and CIMA had the objective of utilizing the ideas from
the ICE model and developing the reverse logistics
Information flow of reverse logistic
When a return occurs, the returned product will be collected (in
many different ways) and sent to the

distribution center. At the same time the relevant information
about the return item description, condition at return, customer
information etc., will be transferred to the return processing
center, but unfortunately, given the current state of the
reverse logistics status quo, this information capture process
rarely occurs, or occurs with less accuracy.
For achieving customer satisfaction & improving customer

service, it is required to take timely feedback from them &
try and make the product little customized.
The returns of goods should be taken into operations only
during the time when the delivery vans are going for
delivery of new products OR for the deliveries to nearby
customers, this will save a lot of transportation cost.
For achieving accuracy in records of returned goods the

stock should be maintained with the help of ERP softwares
(computerized stock records) and not done manually.
This will also help in maintaining accurate inventory levels
with the help of computerized stock records.
Accurate records have to be maintained for the stocks that
are with the vendors & are in transit (idle stock) so that
production department gets a fair idea for future planning.
Company should have their own vehicles so that deliveries

become more cost effective As well this will enhance
customer service more quickly.
Because:
1.
Decrease in Costly Errors: Logistics automation features such as

integration to your commodities via your ERP system and access to your
address book, as well as automatic storage and entry of fuel surcharges and
accessorials, will have you never again worrying about keying in the wrong
information. These kinds of manual data entry errors will lead to increased
shipping costs such as having to pay for shipping twice or paying a higher
freight rate due to entering an incorrect commodity freight classification.
2.
Availability of Transportation Mode Choice and Real Time Freight

Rates: To combat rising transportation costs the logistics automation features
in a TMS makes it easy for users around the country to execute policies that
deliver immediate freight savings. That means the TMS application is built with
a state-of-the-art web services architecture, in order to receive live carrier
rates over the Internet. No more theoretical savings, but hard ROI based on
live, vendor neutral access to real-time market rates. When you have multiple
carriers to choose from based on cost, transit time, and insurance, it
empowers you to make the best choice for your specific shipment, thus saving
you money over the long haul.
3.
Increased Customer Service: How much does it cost for you to LOSE
a customer? With logistics automation features in a TMS such as real time
freight tracking, auto pick-up, proper insurance and freight accounting built to
your custom specifications, you and your customer are empowered to know
exactly how much the freight will cost and when the freight will arrive at it's
destination through automatic notifications
.
4.
Access to Real Time Freight Data and Analysis: When you have
access to real time freight data and the ability to run reports, you are better
served at making better business decisions based on your trends and history.
For example, you may find out through the data that 80% of the time you
picked Carrier "A" because they were the least cost carrier, but you find out in
the data that that carrier is late 20% of the time, causing you to create a
stigma of bad customer service. In the long run, creating such a bad stigma so
you can save money on the front end of shipping, could hurt you over and
above the freight savings by not being able to gain new customers or possibly
losing customers. Access to valuable data at your fingertips with the push of a
button empowers you to see the total cost of your decisions and mitigate
future expensive bad decisions
.
5.
Organizational Control: With logistics automation features in a TMS
you are able to regain control over freight management, freight costs, and risk,
by using the TMS' rules engine, which is based on optimized plans and
routing guides. A TMS is flexible enough to accommodate custom company
business rules, yet powerful enough to force all users, both internal and
external, to follow the policies that ensure efficient and cost effective shipping.
The systems usability must be such that controls can be designed and
implemented by logistics experts with decades of hands-on experience in
logistics, rather than by computer technicians.
6.
Scalability and Speed: With such powerful logistics automation

features in your TMS there are no additional resources needed to even as
your business grows and ships more freight. As your company grows and
ships more freight, a TMS allows you to easily input new users into the system
and manage them easily. Furthermore, with a great freight accounting
automation feature within the TMS, all freight invoices can be consolidated
into one weekly invoice, no matter how many shipments each location has,
making your CFO or controller's job much easier to manage!
Automation at it's finest, and when employed correctly, drives many benefits to
help a company's bottom line. Whether it's automation in the way of robotics
on the manufacturing floor, or automation features which eliminate manual
process, or automation features that give you information seamlessly at will,
one thing is for sure, automation in every industry is on the rise. Logistics
automation in a transportation management system surely helps drive
efficiency, eliminate waste, and most importantly helps save money in your
transportation department.

A Case On Reverse Logistics of Plilips Consumer Lifestyle

Uploaded by

Copyright:

Available Formats

A Case On Reverse Logistics of Plilips Consumer Lifestyle

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

A Case On Reverse Logistics of Plilips Consumer Lifestyle

Uploaded by

Copyright:

Available Formats

What are the main problems faced by Philips Consumer Lifestyle in reverse logistics?

What are the benefits of effectively managing reverse logistics according to the passage?

A Case on Reverse logistics

of Plilips Consumer Lifestyle

ROLL NO. MARKS

KEY PROMBLEMS FACED BY PHILIPS

relationships and external liabilities that could have an enormous

Reverse logistics is a broad area and, in this particular study, we

In our previous research on this area, few companies measured

When a return occurs, the returned product will be collected (in

many different ways) and sent to the

For achieving customer satisfaction & improving customer

For achieving accuracy in records of returned goods the

Company should have their own vehicles so that deliveries

Decrease in Costly Errors: Logistics automation features such as

Availability of Transportation Mode Choice and Real Time Freight

Scalability and Speed: With such powerful logistics automation

You might also like