Reverse logistics seen as value-added by UPS

Editor’s note: The September print edition of Logistics Management features an in-depth evaluation of “Reverse Logistics.” Alan Amling, director of global contract logistics marketing for UPS, provided some added insight on the issue in this exclusive interview.

SCMR: Is the trend of “near-shoring” having an impact on reverse logistics?

Amling: Regardless of whether manufacturing is done near-shore or off-shore, an efficient supply chain approach is ultimately required for reverse logistics. The complexities and challenges in the supply chain still apply to reverse logistics, such as end-to-end visibility of shipments, speed of delivery, proper customs clearance and managing costs, for example.

SCMR: What have shippers learned about risk mitigation since the disaster in Japan?

Amling: Political unrest, rapidly changing oil prices and terrible natural disaster like the one in Japan seem to be the “new normal.”  The key is to try and plan for the unplanned.  Supply Chain analysis with a heavy dose of “what if” needs to be high on the priority list.  Every company should ask whether they have the flexibility, scalability and global access to effectively navigate the inevitable supply chain disruptions.

SCMR: Are shippers changing their modal strategies to accommodate a shift in reverse logistics?

Amling: Shippers are recognizing that reverse logistics needs to be managed as diligently as forward logistics.  How a company handles returns not only impacts their customer satisfaction, it also impacts their bottom line.  The key is to have early insight into the customer demand and supply characteristics of the returned good.  With that knowledge, you can make informed decisions on what needs to be expedited via small package and what can be consolidated and moved in a freight mode.

SCMR: Is there a shortage of reverse logistics specialists?

Amling: UPS isn’t the only company that loves logistics.  There is increasing demand for logistics professionals in general, including specialists in reverse logistics.  Companies are recognizing the critical importance of logistics as a competitive differentiator in our fast-moving, global economy.  According to a February 2010 Aberdeen Group Survey, manufacturers with best-in-class reverse logistics enjoy a 12 percent advantage in customer satisfaction.

SCMR: How are universities preparing a new generation of reverse logistics professionals?

Amling: Today’s supply chain managers are business managers as well.  They not only need to know the ins and outs of supply chain management, but also have the technical, problem-solving and “people” skills to take projects for idea to execution.  An increasing number of universities are now offering degrees in supply chain management to meet this need.

SCMR: What other trends can you identify for our readers?

Amling: I think the biggest trend around reverse logistics is the recognition that returns aren’t scrap; they are valuable assets and should be treated as such.  The goal is to provide a great experience for the consumer while maximizing the value from every returned product.  The key is to view reverse logistics as an end-to-end network as opposed to individual silos of return, repair, recycle, scrap or liquidate.  That’s when the true value of reverse logistics can be unlocked.

Other trends such as increasing complex supply chains and end consumers’ growing demand for speed and convenience have led to the need for companies to build more flexibility and convenience into their returns process. UPS recently launched a combined pick up and delivery serviced called UPS Returns Exchange, which makes processes for high-value products more efficient.