The paper "A Framework for the Role of Warehousing In Reverse Logistics by Shad Dowlatshah" is a great example of management article. Reverse logistics (RL) management has become an area of increased focus by organizations. RL refers to a process in which products moves in the opposite direction from the customer or end-user to the producer along the distribution channel. In other words, RL is the process involving the return of goods by customers to the producer for purposes of ensuring proper disposal. Shad Dowlatshah, that, as much as the RL has been an old concept, its importance has been realized in the recent past as companies, both small and large are increasingly embracing RL concept as a way of minimizing waste and cost so as to ensure competitiveness.
The author attributes this to the fact that RL adds value to the supply chain by ensuring that returned goods are properly recaptured and managed to ensure added value to the goods. According to Dowlatshah, RL activities have significance in the supply chain in many ways. According to the Manufacturing Business Technology report, about $100 billion in products current flow through RL channels every year cited Dowlatshah (1265).
Unfortunately, as high as 40% of all the products are returned by customers, though this depends on the industry. However, whenever a customer returns a product, this is normally costly to the producer and retailers. In this article, Dowlatshah notes that returned products currently cost American manufacturers and retailers up to $1000 billion annually in lost revenue, handling, disposal, transportation and processing (1265). Apart from the cost factors associated with customer returns, the author notes that such returns also result in lost profitability which they estimate at about 3.8%.
The author also reports another research finding that predicts that product returns could cost an average of $30-$35 in the next few years. Another study cited by the author, however, predicts that the average cost of product returns by customers could reach $50 per item soon cites Dowlatshah (1265). In the U. S., RL cost is estimated at $35 billion every year and £ 6 billion in the UK yearly. Therefore, the author is of the view that organizations need to ensure proper management of their RL operations to ensure success.
In this paper, the author investigated the warehousing factors that are needed for the effective design and implementation of RL activities. Literature Review According to Dowlatshah, designing and implementing an effective RL system is critical in giving a company a competitive edge in an industry (1266). Despite recognition of this importance, there is no literature on the warehouse factors that are necessary for understanding, designing and implementing a working RL system. In the first part of the literature review, the author explores the emerging functions of warehousing in RL.
According to the author, warehousing is no longer just a place for storing goods. Instead, the roles of the warehouse have been evolving over the years and currently include the management of RL operations. According to the author, a warehouse is an important part of the manufacturing business because it ensures the control of the movement of products that are returned by customers through effective space planning in the warehouse. In this respect, the author notes that effective planning of space in a warehouse is a critical requirement in the RL system.
Additionally, Dowlatshah notes that a warehouse should be capable of providing the visibility and functionality that ensures reduces the risk of incurring high carrying cost and obsolescence (1266). Moreover, the author cites that a warehouse plays a critical role in RL operations as it ensures the development of a working logistics functions, transportation, and inventory management.