A Framework for Reverse Logistics

Abstract

Twenty years ago, supply chains were busy fine-tuning the logistics of products from raw material to the end customer. Products are obviously still streaming in the direction of the end customer but an increasing flow of products is corning back. This is happening for a whole range of industries, covering electronic goods, pharmaceuticals, beverages, and so on. For instance, the automobile industry is busy changing the physical and virtual supply chain to facilitate end-of-life recovery (Boon et al., 2001; Ferguson and Browne, 2001). Besides this, distant sellers like e-tailers have to handle high return rates and many times at no cost for the customer. It is not surprising that the Reverse Logistics Executive Council has announced that US firms have been losing billions of dollars on account of being ill prepared to deal with reverse flows (Rogers and Tibben-Lembke, 1999) . The return as a process was recently added to the Supply-Chain Operations Reference (SCOR) model, stressing its importance for supply chain management in the future (Schultz, 2002). Reverse Logistics has been stretching out worldwide, involving all the layers of supply chains in various industry sectors. While some actors in the chain have been forced to take products back, others have proactively done so, attracted by the value in used products. One way or the other, Reverse Logistics has become a key competence in modern supply chains.