Distribution management
-
Upload
dipanway-bhabuk -
Category
Marketing
-
view
22 -
download
1
Transcript of Distribution management
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Salvage of outdated products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
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
Reverse Logistics Management Requirement
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
Reverse Logistics Management Requirement
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 Management Requirement
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
Reverse Logistics Management Requirement
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
Reverse Logistics Management Requirement
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
Reverse Logistics Management Requirement
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.