While at the Association for Supply Chain Management International Conference, I attended a session related to reverse logistics that contained several ideas for how to achieve significant savings and customer value through reverse logistics. However, I thought it was even more compelling to hear the examples of a friend a colleague who came up with innovative ideas that will provide superior customer service AND a significant margin improvement with a commonsense idea gained by collaborating with her team. It yet again proves that results go to those who take the time to listen, observe and collaborate to test new ideas.
One example related to shipping boxes. This aerospace manufacturer received complaints from their customer that they didn’t want these hefty shipping boxes as they had to dispose of them. However, there are legal and security requirements that had to be addressed, and so a creative solution was required. A team brainstormed ideas and developed a way for the customs officials to look inside the crate without breaking into the crate and created a way to return and reuse the crates also saving the customer disposal costs. Collaboration was a key theme as the supplier, customer and internal team were involved. As this top notch manager commented, there are countless numbers of these types of opportunities out there if we just listen, observe and collaborate. When is the last time you have visited your shipping operation to ask for common sense ideas that can achieve a dramatic return on investment? Even more importantly, the team feels a part of an important success.
Turning to the e-commerce world, according to a presentation by the Reverse Logistics Association, returns are 25-35% for on-line sales vs. 8-9% in stores. What a dramatic difference! And, of course, handling these returns is inefficient. Traditional labeling is the limiting factor in achieving higher throughputs. Have you thought about your labeling recently? Who knew it could become a differentiator!
When looking at reverse logistics related to food, collaboration was again a key theme. Costa Farms resolved cart and rack issues with both the customer and supplier by moving to consolidated rack return. The idea of collaborating across supply chains is just gaining momentum. For example, as a part of the consortium for logistics success in the Inland Southern California, we are collaborating with GA Tech. They are bringing collaboration of strange bedfellows across Southern CA to the table as a way to create a win-win-win for each company involved as well as the environment and more. Stay tuned for the latest trends and ideas emerging from this supply chain consortium over the next few years.
Perhaps the common theme is to pay attention to collaboration opportunities and reverse logistics. There can be a significant hidden opportunity in this topic. Why not focus attention and see what can be achieved with some common sense and collaboration!