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Impact Of Technology On Reverse Logistics Business Essay

In todays market place, many retail merchants treat ware returns as single, confused minutess. “ The challenge for retail merchants and sellers is to treat returns at a proficiency degree that allows promptly, efficient and cost-efficient aggregation and return of ware. Customer demands facilitate demand for a high criterion of service that includes truth and seasonableness. It ‘s the logistic company ‘s duty to shorten the nexus from return inception to the clip of resell. By following returns direction best patterns, retail merchants can accomplish a returns procedure that addresses both the operational and client keeping issues associated with ware returns. Further, because of the connexion between contrary logistics and client keeping, it has become a cardinal constituent within Service Lifecycle Management ( SLM ) , aA concern strategyA aimed at retaining clients by roll uping even more coordination of a company ‘s services data together to accomplish greater efficiency in its operations.

Rearward logistics is more than merely returns direction, it is “ activities related to returns turning away, gatekeeping, disposal and all other after-market supply concatenation issues ” .A Returns direction – progressively being recognized as impacting competitory positioning – provides an of import nexus between selling and logistics. The wide nature of its cross-functional impact suggests that houses would profit by bettering internal integrating attempts. In peculiar, a house ‘s ability to respond to and program for the influence of external factors on the returns direction procedure is improved by such internal integrating. Third-party logisticsA suppliers see that up to 7 % of an endeavor ‘s gross gross revenues are captured by return costs. Almost all rearward logistics contracts are customized to suit the size and type of company catching. The 3PL ‘s themselves realize 12 % to 15 % net incomes on this concern.

“ Surveies have shown that an norm of 4 % to 6 % of all retail purchases are returned, bing the industry about $ 40 billion per twelvemonth. ” hypertext transfer protocol: //


Pull offing contrary logistics ( returns ) is complicated and expensive. Tax returns are a important job for companies in both business-to-consumer ( B2C ) and business-to-business ( B2B ) environments. U.S. contrary logistics cost estimations from every bit low as $ 35 billion to every bit high as $ 100 billion per twelvemonth.

Clearly, returns are an issue ripe with possible, but we find that, short of utilizing fundamental maps in their ERP, few companies have attacked the contrary logistics job with engineering. Although a important job for many companies, returns remain a secondary consideration because companies continue to prioritise supply concatenation related IT investings on outward undertakings ( e.g. , order direction and fulfilment ) . Consequently, most organisations live with labour intensive, manual, frequently undisciplined and inefficient returns direction processes. Without inquiry we believe rearward logistics must, and we predict it will, go a higher precedence for companies with big and complex returns jobs.

A turning figure of companies ( particularly in retail and hi-tech ) see competitory and strategic value in pull offing returns in house ; nevertheless, they besides recognize that they lack equal systems to efficaciously make so.

Automatizing the returns procedure provides several countries of chance.

Cost reductionA – Returns cost nest eggs can be found in people, procedures and stock list. Better determination devising at the point of mandate such as whether to accept a return and, if so, where best to route it, and holding visibleness to downstream maps will draw cost from the returns procedure

Customer ServiceA – Customers will go on to purchase from companies that are easy to make concern. Companies with effectual and flexible returns plans, like an REI or Nordstrom, attract repetition purchasers because their clients trust them, in portion, because of their returns policies.

EfficiencyA – Tax returns are unpredictable and companies do non typically command a important part of the procedure, doing manual returns processes extremely inefficient and riotous. Wasted cargo and extra attempts kill efficiency

ControlA – Efficaciously commanding a manual returns procedure is near impossible. Peoples make hapless determinations if all they have is limited, if any, information and fundamental tools to assist steer the procedure and, without tools, the procedure degrades to approach pandemonium. Tools that provide procedure subject and counsel will travel a long manner to bettering procedure control, which will drive the other benefits.


Research how tracking and following engineering, such as GPS, saloon codifications and Radio Frequency Identification ( RFID ) tickets can be used in rearward logistics operations for returns, callbacks and recycling. A A practician attack is used to research and analyze the direction maps and the interrelatednesss sing the usage of engineering to capture informations for merchandises fluxing in the contrary logistics system.


The survey was largely restricted to a sample population who were easy accessible, preponderantly Bangalore, Karnataka.

Personal Interviews were restricted to a few of import inquiries and were intended to acquire the personal positions and sentiments of the respondents.

The deficiency of willingness to portion the information on the portion of the respondents.

Chapter 2



The retail sector in India is turning at a phenomenal gait. Harmonizing to the Global Retail Development Index 2012, India ranks fifth among the top 30 emerging markets for retail. The recent proclamation by the Indian authorities with Foreign Direct Investment ( FDI ) in retail, particularly leting 100 % FDI in individual trade names and multi-brand FDI has created positive sentiments in the retail sector.

There are many factors lending to the roar in this sector. To call a few, increased consumerism with a capacity to pass on luxury points and increased disbursement power in the custodies of Indians. More Indians are going abroad and are exposed to different civilizations and manner of life and thereby more trade names. India ‘s internal ingestion is besides high and the ingestion form having to diverseness in civilization, faith and the household values that encourage disbursement on specific occasions keep the retail concern good oiled.

The size of India ‘s retail sector is presently estimated at around $ 450 billion and organised retail histories for around 5 % of the entire market portion. Ratings bureau Fitch has assigned a stable mentality to the retail sector for 2012 as factors like expected gross revenues, growth-driven enlargement and efficient working capital direction are likely to profit retail companies. It is estimated that the retail sector would go on to turn at 10-12 % per annum, which is highly encouraging when the state ‘s economic system is merely projected to turn at 6 % .

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As the modern-day retail sector in India is reflected in sprawling shopping centres, multiplex- promenades and immense composites offer shopping, amusement and nutrient all under one roof, the construct of shopping has altered in footings of format and consumer purchasing behaviour, showing in a revolution in shopping in India. This has besides contributed to large-scale investings in the existent estate sector with major national and planetary participants puting in developing the substructure and building of the retailing concern. The tendencies that are driving the growing of the retail sector in India are:

Low portion of organized retailing

Falling existent estate monetary values

Addition in disposable income and client aspiration

Addition in outgo for luxury itemsA

Another believable factor in the chances of the retail sector in India is the addition in the immature working population. In India, brawny wage packages, atomic households in urban countries, along with increasing working-women population and emerging chances in the services sector. These cardinal factors have been the growing drivers of the organized retail sector in India which now boast of retailing about all the penchants of life – Apparel & A ; Accessories, Appliances, Electronics, Cosmetics and Toiletries, Home & A ; Office Products, Travel and Leisure and many more. With this the retail sector in India is witnessing greening as traditional markets make manner for new formats such as departmental shops, hypermarkets, supermarkets and forte stores.A


Rural markets emerging as a immense chance for retail merchants reflected in the portion of the rural market across most classs of consumption.ITC is experimenting with retailing through its e-Choupal and Choupal Sagar – rural hypermarkets.

The Hidden Challenges:

Modern retailing is all approximately straight holding “ first manus experience ” with clients, giving them such a satisfiable experience that they would wish to bask once more and once more. Supplying great experience to clients can easy be said than done. Therefore challenges like retail distinction, trading mix, supply concatenation direction and competition from provider ‘s trade names are the talk of the twenty-four hours. In India, as we are traveling to the following stage of retail development, each enterprise to offer experiential shopping.A One of the cardinal observations by clients is that it is really hard to happen the singularity of retail shops. The job: retail distinction.

The following job in puting up organized retail operations is that of supply concatenation logistics. India lacks a strong supply concatenation when compared to Europe or the USA. The bing supply concatenation has excessively many mediators: Typical supply concatenation looks like: – Manufacturer – National distributer – Regional distributer – Local jobber – Retailer – Consumer. This implies that planetary retail ironss will hold to construct a supply concatenation web from abrasion. This might run foul with the bing supply concatenation operators. In add-on to fragmented supply concatenation, the hauling and transit system is antiquated. The construct of container trucks, automated repositing is yet to take root in India. The consequence: A important losses/damages during transportation.

Trading planning is one of the biggest challenges that any multi shop retail merchant faces. Geting the right mix of merchandise, which is store specific across organisation, is a combination ofA client penetration, allotment and mixture techniques.

The private label will go on to vie with trade name leaders. So provider ‘s trade name wiil take their ain manner because they have a established trade name image from last decennaries and the grounds can be attributed to betterA client experience, value vs. monetary value, aspiration, invention, handiness of provider ‘s trade name.


One of the most of import challenge in organized retail in India is faced by hapless supply concatenation and logistics direction. The importance can be understood by the fact that the logistics direction cost constituent in India is every bit high as 7 % -10 % against the planetary norm of 4 % – 5 % of the entire retail monetary value. Therefore, the borders in the retail sector can be improved by 3 % – 5 % by merely bettering the supply concatenation and logistics direction.

The supply concatenation direction is logistics facet of a value bringing concatenation. It comprises all of the parties that participate in the retail logistics procedure: Manufacturers, Wholesalers, Third Party Specialists like Shippers, Order Fulfillment House etc. and the Retailer. Here, logistics is the entire procedure of planning, implementing and organizing the physical motion of ware from maker to retailer to client in the most timely, effectual and cost efficient mode possible. Logisticss respects order processing and fulfilment, transit, repositing, client service and stock list direction as mutualist maps in the value bringing concatenation. It oversees inventory direction determinations as points travel through a retail supply concatenation. If a logistics system works good, the retail house reduces stock outs, hold down stock lists and better client service – all at the same clip. Logisticss and Supply Chain enables an organized retail merchant to travel or shop merchandises more efficaciously. Efficient logistics direction non merely prevents gratuitous motion of goods, vehicles reassigning merchandises back and Forth ; but besides frees up storage infinite for more productive usage. Retail analysts say on-time order refillings will go even more critical once the Wal-Mart/ Bharti combine begins operations – the American retail merchant works about wholly on cross-docking and is likely to demand higher service degrees, including possible levies for holds in cargo.

The efficiency and effectivity of supply concatenation and logistics direction can besides be understood by the fact that modern retail shops maintain lower stock lists than traditional retail. In India, by and large in the traditional kirana shops, three hebdomads stock lists are kept ; while in a modern retail shop like Hypercity, it ‘s nine yearss and it’sA under two hebdomads for Food Bazaar. Now, it is good for both the maker every bit good as the retail merchant. If we go through the undermentioned nutrient supply concatenation in India, we find that a batch can be improved by keeping the supply concatenation and logistics.

2.4 Reverse Logistics & A ; SCM:

Reverse Logistics offers several advantages to the company in footings of both touchable and intangible benefits. In the first case, companies are able to recover faulty equipments and parts which are either salvaged or refurbished and therefore repossess value out of the faulty parts. Second, the packaging and faulty stuffs are collected and recycled thereby bring forthing bit value back for the company. Third unsold and disused equipments are collected back from point of sale which encourages the distributers and stockists to confidently purchase stocks from the company knowing that he can ever return fresh stock list and non stand to free in the deal. Distributors are more likely to be unfastened to carrying all fast moving every bit good as slow traveling stocks.

Reverse logistics has been successfully adapted as selling scheme. Refurbished computing machines are sold at cheaper monetary values by all taking trade names and the demand for such laptops seems to be turning. The trim parts used by the computing machine makers to serve the laptops and computing machines on guarantee or on sale, include refurbished parts.

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Chapter 3


3.1 Introduction

Literature Review is the procedure of reading, analysing, measuring and sum uping research articles. The findings of a literature reappraisal may be compiled in a study as portion of a thesis. A literature reappraisal may be strictly descriptive or it can give a critical appraisal of the literature in a peculiar field to place where the spreads are contrasting the positions of a peculiar research worker. It besides helps in measuring and expose relationships between the different constructs, so that we can province our nonsubjective and organize our hypothesis for survey.


Literature reappraisal is the most of import portion of any thesis or research paper due to several grounds. Literature reappraisal helps in beef uping the thesis to set up the aims for our survey by sing the positions of other writers. This proves a point that a important sum of literature has been developed by research workers which helps in widening our research by reexamining it and set uping our aims for survey. Literature reappraisal is about acquiring aware of the work done by research workers in the yesteryear, which helps in hypothesis preparation for the thesis.


The literature reappraisal is done in the undermentioned mode:

Identifying the relevant research articles related to our country of research

Reading the research article exhaustively

Analyzing the facts, constructs in the research article

Evaluation of the research article

Sum uping the research article in a brief mode

3.4 Reappraisal

1. Rearward Logisticss: RFID the key to optimality, Journal of Industrial Engg and Mgmt

Rezwan Asif

Linkoping University ( SWEDEN )

This paper explains that Reverse Logistics by and large give attempts on activities environing the return and processing of returned merchandises. They are at first normally collected at the point of sale and besides in aggregation points, so inspected and sorted by employees to the best of their cognition. Furthermore, the employee determines if the return is accepted and the actions to be taken subsequently on. Thereafter, a certain sum of clip can go through before farther actions are taken in respects to those recovered merchandises.Due to its alone advantages such as majority reading, to the full mechanization and no line of sight, the needed clip, labor and cost for aggregation and sorting are reduced. To increase the value of the returned merchandises, determinations are made whether to mend, renovate, remanufacture, cannibalise or recycle the products.The trailing and designation features of the RFID give information about the quality of the returned merchandises, advantages on doing the right determinations and besides cut down larceny. So RFID-based solutions have proven to assist concerns cut down costs, fine-tune stock list direction, strengthen larceny sensing, and achieve new speed with real-time visibleness into concern procedures across the whole Reverse Logistics Supply Chain.

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2. Social media as a touch point in rearward logistics: graduated table development and proof

A InternationalA JournalA ofA BusinessA Research

Chandra, Navin

This paper presents the development of a graduated table which assesses the factors that are of import for clients who are contacted by companies on societal media, in the context of contrary logistics. A planar graduated table is developed on serviceability and experience. The usability dimension consists of points related to ease of usage, user control, response traceability and personalization. For the experiential concept, the points are empathy, empowerment and engagement. This graduated table can be used for all types of cyberspace and nomadic technology-enabled communicating to measure client service.A

3. The Role of ICT in Reverse Logistics: A Hypothesis of RFID Implementation to

Pull off the Recovery Procedure

Andrea PAYARO, University of Padova, Italy.

Traditionally a merchandise was developed to be manufactured and travel through the supply concatenation to be sold to a client. However, supply ironss are steadily incorporating more activities than those concerned with supply entirely, like including service and merchandise recovery. Here we will concentrate on the latter, and particularly rearward logistics, i.e. the handling of merchandises, constituents and stuffs during the recovery procedure ( Revlog, 1998 ) . Several forces drive contrary logistics, like, competition and selling motivations, direct economic motivations and concerns with the environment. At present, in literature it is non present a theoretical account that describes which merchandises can easy be recovered and what are the elements that determine the feasibleness of recovery procedure. This paper aims to specify the merchandise ‘s features that influence the

acceptance of contrary logistics and to propose the usage of information engineerings to back up the recovery procedure. Information and communicating engineerings have a chief function in the recovery procedure of electronic devices.

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4. Cruising Ahead: Retail Reverse Logistics Outlook in India

Rachna Nath

Outlook, 14 Feb 2012.

Logisticss is a constituent of incorporate supply concatenation and is a important subscriber to the monetary value of goods on the shelf. In India, logistics contributes 14-15 per centum of the state ‘s GDP, while in the developed geographicss this per centum tends to be much lower, 7-9 per centum. Here lies the challenge for Indian retail merchants, specifically price reduction retail merchants, for whom logistics direction is a possible country to optimise cost.

Most logistics companies today provide clients real-time visibleness sing the co-ordinates of merchandises in the supply concatenation. This is made possible by the usage of engineering like GPS/GPRS. The usage of handheld devices for stock list control is besides picking up in the industry. This helps retail merchants count their stock list faster and more expeditiously. In some instances, a retail merchant ‘s systems integrate with those of their 3 PL and 4 PL supplier to enable smooth exchange of information on both sides.

In November 2011, the Committee of Secretaries of the Government of India approved up to 51 per centum FDI in multi-brand retail, with a few conditions, before turn backing in the face of stiff resistance. One of the conditions was that half of FDI in multi-brand retail should travel into making back-end substructure like cold ironss and warehouses. Besides, the minimal FDI was mandated to be US $ 100 manganese ( around Rs 450 crore ) .

5. Green Reverse Logistics Brings Many Happy Returns

Amy Roach Partridge

Companies that combine the “ cut down, reuse, recycle ” mantra with the supply concatenation wisdom of pull offing costs and stomping out inefficiencies are developing rearward supply ironss that help the Earth, the client, and the bottom line.

“ Rearward logistics is inherently green, ” explains Gailen Vick, president of the Reverse Logistics Association, a trade organisation focused on educating retail merchants, makers, and third-party logistics suppliers about the benefits of contrary logistics. “ Repairing, refurbishing, or recycling a merchandise alternatively of throwing it in a landfill automatically does good for Mother Earth. ”

Rearward logistics activities give companies a full green supply concatenation ; they non merely travel to market with a green merchandise, but they besides have a manner to acquire it out of the field that does non include a landfill. If a company can market a refurbished merchandise that is merely every bit good as a new one, it can cut fabrication costs while advancing a green image through selling refurbished goods.

6. Measuring the Impact of RFID on Return Center Logistics

Nishtha Langer

Tepper School of Business, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213

Harmonizing to this article, many makers, retail merchants, distributers, and logistics i¬?rms adopt RFID, the engineering is going permeant in the supply concatenation. Although its advocators include retail giants such as Wal-Mart, non all companies are enthusiastic about its benei¬?ts. It is non clear whether RFID is a blessing or a expletive to the supply chain-its market growing may merely be an issue of conformity. To set up the existent benei¬?ts of RFID, i¬?eld survey was conducted with GENCO, a third-party logistics company that deployed RFID in the outbound logistics operations at one of its return centres. Their analysis found that the RFID execution had a signii¬?cant impact on the GENCO outbound procedure. The figure of client claims fell well following the RFID deployment. After commanding for other factors in our theoretical account, they coni¬?rmed that RFID was a cardinal factor that contributed to the positive consequences at this return Centre.

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7. IT Investment Is Key to Successful Reverse Logistics Management

Harmonizing to this article, Companies need some sort of track-and-trace capableness to derive better visibleness into where a good is in the contrary supply concatenation procedure. For starting motors, companies can utilize bar-coding and radio frequence designation to label points before traveling back through the supply concatenation. Enhancing the visibleness of inbound returns allows concerns to set staffing degrees harmonizing to stock list fluctuations. This enhanced visibleness besides helps maximise the value of returned ware by making stock list qui vives when merchandises are ready for resale.

Reverse logistics package addresses this issue by automatizing conformity studies to turn out that authorities ordinances were followed. A contrary logistics system captures merchandise informations at each phase of the proficient procedure and so produces conformity certification in a client study. Automatizing conformity studies eliminates documentation mistakes and reduces staffing demands to bring forth conformity studies.

8. Automatizing the Retail Returns Process with R-LogA® Reverse Logistics Software

GENCO developed proprietary R-LogA contrary logistics softwareA to pull off the contrary flow of merchandises, information and hard currency from the point of reception through concluding temperament. R-Log houses the concern regulations, agreed to between organisation and their sellers, specifying the appropriate merchandise temperament method for each merchandise. These regulations help automatize once manual procedures to virtually extinguish human mistake, rush up the contrary flow of merchandises and cut down labor costs.

R-Log benefits include:

Automation of the returns mandate procedure

Validation and crediting of on-line client returns

Improved rapprochement of client, shop, and seller conformity

Virtual riddance of shop labor to procedure returns, liberating up store-level staff to work straight with clients

Reduced stock list and improved hard currency flow through fast, automated processing

Immediate application of seller credits to the histories collectible system

Complete visibleness and control through a Web-based tool that provides real-time information on returns stock list.

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9. Rearward Logisticss: Customer Satisfaction, Environment Key to Success in the twenty-first Century:

The challenge for retail merchants and sellers is to treat returns at a proficiency degree that allows promptly, efficient and cost-efficient ware aggregation and return. Customer demands facilitate demand for a high criterion of service that includes truth and seasonableness.

Rearward logistics is based upon heightened environmental consciousness, public policy and the jurisprudence. The chief construct is that reclaimable packaging, every bit good as outdated, damaged or faulty merchandises, can outdo be recycled or reused by the original maker. It besides involves merchandise system designs that do recovery and reuse possible, efficient and profitable. In contrary logistics, a step of what gets thrown off is a step of a merchandise design and recovery procedure failure. While landfill sites worldwide are at their busiest, more companies are detecting it makes good concern sense to be proactive on environmental issues refering returned stock list.

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10. Sustainable Supply Chain Strategy – Reverse Logisticss in E-Retail

Harmonizing to this article, the rapid enlargement of e-retail has besides contributed to the increased consciousness of the importance of contrary logistics. Customers purchasing over the cyberspace do non hold the benefit of a physical review of the merchandise and this increases the likeliness that they will see some dissatisfaction with the merchandise and will desire to return it. As increasing Numberss of online sellers offer easy, no-fault returns, this has resulted in the potency for an ever-greater sum of returned ware deluging a company ‘s contrary logistics supply concatenation. In recent old ages companies have reported returns per centums anyplace between 5 % and 35 % . Difficult goods are usually at the lower terminal of the graduated table, while manner vesture and footwear, where the client will sometimes order a scope of sizes if they are unfamiliar with the tantrum, is often at the higher terminal of this scope.

Change by reversal logistics direction package exists that can either run as a standalone application or as portion of an ERP. This specialized package can automatize some of the critical maps and supply coverage and audit maps to enable retail merchants to keep better control and besides help in run intoing regulative demands.

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