Reverse logistics under utilised

Logisticians at a summit in Queensland have been told to use reverse logistics and recycling to grow revenue

Reverse logistics under utilised
Reverse logistics under utilised

By Sean Muir | February 19, 2013

Logisticians at a summit in
Queensland have been told
to use reverse logistics and recycling
to grow revenue.

Reverse logistics is not a new practice in Australia, but a United States supply chain veteran says most companies still haven’t worked out it can make them money.

Presenting at the inaugural Chief Logistics Officer Summit on the Gold Coast yesterday, US Supply Chain Leadership Institute Executive Director Joseph Walden says recycling returned or redundant products can diminish the costs of reverse logistics and add to company revenue.

Walden, who has more than 34 years’ experience in the logistics and supply chain sector, says in recent years many companies have formed solely to recycle products such as electronics.

He says some of these companies have become very profitable, salvaging metals such as gold and copper used in electronics.

But he says while most businesses are already engaged in reverse logistics, they are still not recapturing the costs by recycling products returning from end users, retailers and distribution centres.

He says this is value businesses are missing out on.

"One study shows that companies spend up to 15 percent of their revenue on reverse logistics," Walden says.

"I will tell you that will come down by recapturing the value. We can recapture value through the reverse logistics process and add to the bottom line."

Walden says about $677 billion worth of product is going backwards each year.

He says as much as 30 percent of what is ordered online is returned to stores.

He says companies that can refurbish products are able to resell them, but many products are still being sent to land fills in Australia and abroad, causing severe environmental damage and health hazards.

"A lot of people say, 'Joe, why are you talking about this and why is it important to us as logisticians? Are you just an old hippy – is that why you are concerned about this?’

"But I’m too young to be a hippy. The reason I am concerned about recycling from a logistics perspective, as a supply chain professional, is because this is a problem we can solve. We have the capabilities through reverse logistics."

About 100 delegates attended the Chief Logistics Officer Summit, held February 17-19 at the RACV Royal Pines Resort on the Gold Coast.

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