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The Proper Management of Forward and Reverse Logistics

The Proper Management of Forward and Reverse Logistics

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By Dr. William Oliver Hedgepeth
Faculty Member, Transportation and Logistics Management, American Public University

Supply chains are about how things or products flow or are transported from one place to another. Supply chains are comprised of two types of logistics: forward and reverse.

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What Is Forward Logistics?

Forward logistics is the movement of raw materials though a variety of manufacturing and handling steps to reach the consumer. One example would be a cotton shirt.

An end product such as a cotton shirt involves buttons, dyes, and thread as well as processes such as sewing, washing, ironing, packaging, and labeling. Some components of that cotton shirt may come from different parts of the world. Similarly, the actual construction of the shirt may also be performed in different parts of the world.

In the end, the forward logistics effort of creating a cotton shirt may involve hundreds of raw products. Those products are part of a forward supply chain of separate components that move from many places toward several final destinations to construct that shirt. There is also the business goal that millions of those shirts are to be made in a certain timeframe.

What Is Reverse Logistics?

Reverse logistics is defined as the “flow of surplus or unwanted material, goods, or equipment back to the firm, through its logistics chain, for reuse, recycling, or disposal.” A common example of a process that uses reverse logistics are the items that are recycled from your home.

For example, you may have a bin where you place empty, unwanted items for recycling. For instance, you may collect cans, paper food containers, glass bottles, paper, and some plastics that a company collects and takes to another location for processing.

In addition, recycling centers in each state collect recyclable items from your home. The list varies by state and even locality.

Both of these methods of collecting recyclable items involve reverse logistics. Also, reverse logistics can refer to that cotton shirt if you return it to the place of purchase or to a returns center for consumer products.

There are many items that are part of a reuse system in reverse logistics. For example, one item is aftermarket auto parts such as spark plugs. Automotive parts fulfillment represents a combination of forward and reverse logistics to meet customer demands for a part at a competitive price.

The Types of Forward and Reverse Service Supply Chains

Products typically flow either forward or backward in supply chains. Also, money and data are also involved in a supply chain.

Imagine that a supply chain looks like a global spider web, rather than a straight line. Along this web are a variety of different components flowing backward or forward; these flows are typically “product flow, financial flow, information flow, value flow and risk flow.”

This global, spider web-style supply chain involves an endless array of routes. The quality of products moving along these flow lanes of the supply chain also vary; some items may be good quality while other items could be damaged from poor handling or poor manufacturing.

The data and information flow through the supply chain links may also be high quality or low quality. For instance, data could be suspicious in regard to product cost or transportation and handling charges.

The Benefits of Properly Managing the Reverse Logistics Flow

When properly managed, reverse logistics has four possible benefits to business and the consumers:

  • A second return on investment
  • An increase in public or consumer perception
  • The promotion of manufacturing competition
  • Increased consumer data protection

However, business and consumers may experience problems with reverse logistics and recycling partners. For instance, China stopped being the U.S. customer for recycled items.

The Crossroads of Forward and Reverse Logistics

Both forward and reverse logistics can be beneficial to consumers and businesses. However, the International Journal of Logistics Management notes that “the practical tools to evaluate the degree of combination of the reverse and forward logistics are missing.” There does not seem to be any one plan or procedure or process that all business organizations can use to efficiently manage supply chain flows, profits, and the losses of products leaving the forward logistics supply chain and entering the reverse logistics supply chain.

The flows use different levels of accountability for products, costs, and the reinvestment to convert possible lost items into competitive money-making products or beneficial products for consumers. The crossroads of both logistics’ supply chains appears to not exist, except on a case-by-case basis.

About the Author

Dr. Oliver Hedgepeth is a full-time professor at American Public University (APU). He was program director of three academic programs: Reverse Logistics Management, Transportation and Logistics Management and Government Contracting. He was Chair of the Logistics Department at the University of Alaska Anchorage. Dr. Hedgepeth was the founding Director of the Army’s Artificial Intelligence Center for Logistics from 1985 to 1990, Fort Lee, Virginia.

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