Incorporate Reverse Logistics Into Your Sustainability Goals
By Mark Doughton
The book titled Green to Gold by Daniel C. Esty and Andrew S. Winston devoted much discussion to the upstream and downstream components of a corporate sustainability program.
However, one key component wasn't mentioned: the backstream, or reverse logistics program. While it is tempting to put a sustainability program in place and never look "back," that approach simply is not a sustainable long-term option.
And, here's why...an overall corporate sustainability program includes people, planet and profits. Unsaleables/returns impact all three. Consider the following ways that incorporating a reverse logistics facility can assist with achieving your organization's sustainability goals.
1. Eliminate/alleviate landfill costs and potential fines by shipping returned product to a returns center for value-added disposition: recycling, liquidation and donation. For example, in just one year for one client location, a recycling program designed to utilize dry unsaleable product for livestock feed eliminated 17 landfill hauls and reduced landfill usage by 177 tons.
2. Reduce carbon footprint by shipping to regional distribution returns centers rather than one central location.
3. Leverage the scale and volume of a returns center to maximize recovery on secondary sales through cross merchandising programs. A drug store chain began an asset recovery project 12 months ago that eliminated three million unsaleable products from the landfill and in turn increased its liquidation revenue by over 200 percent from the previous year.
4. Utilize value-added services such as repacking and refurbishing to return product to stock, prepare goods for donation or recoup value on the secondary market.
5. Delegate the recycling of secondary packaging to a returns center as part of its overall program (for example, cardboard, plastic shrink wrap, paper, plastic bottles and plastic bags).
6. Collect important data on returned product to understand root cause and to develop returns prevention programs that lead to improved profits. A collaborative study conducted with a manufacturer and retailer uncovered a package design flaw that resulted in a high rate of returns.
A $150,000 package redesign by the manufacturer resulted in an estimated savings of over $2 million for the manufacturer's retailers through reduced labor costs and product shrink.
7. Monitor the impact of sustainable packaging changes on damages and returns by collecting data at the returns center.
8. Make the most of product that must be incinerated by participating in returns center programs for converting waste to energy. Through such a program a large manufacturer now recycles 93 percent of its hazardous products that are flammable solids or liquids.
9. Protect the consumer during a recall by quickly and efficiently returning product to a returns center for quarantine, evaluation and proper disposal. During a recent recall, more than 2.5 million items were processed and properly disposed of, according to lot and date code, through witnessed incineration, thus ensuring full compliance with government regulations.
10. Incorporate a "back stream" component to your up- and downstream sustainability program for a holistic sustainable supply chain approach.
Doughton is president of CLS (Carolina Logistics Services), a reverse logistics and supply chain solution provider based in Winston-Salem, NC.