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EXECUTIVE SUMMARY

Traditionally, businesses have concentrated on improving the forward supply chain

for their products. However, as the business environment becomes more competitive,
it becomes increasingly important for them to concentrate on optimizing the backward
loop, as well. Reverse logistics practices have been in existence for a long time,
especially in the automotive industry, where manufacturers try to recover value from
recycling car parts. Reverse Logistic now involving all the layers of supply chains in
various industry sectors. Attracted by the value in used products one way or the other,
reverse Logistics has become a key competence in modern supply chains. While
many companies have yet to recognize the strategic potential of efficient reverse
logistics, it is clear that the tide is beginning to turn. There is more interest in reverse
logistics now than ever before. Firms are beginning to make serious investments in
their reverse logistics systems and organizations. One clear indication of the strategic
importance of a business element is the amount of money spent on managing reverse
logistics.

Increased global competition and complexity within the Indian automotive sector has
led companies to find ways to improve the efficiency of reverse logistics. Given this
truth and the huge pressures confronting the Automotive Industry, the cost down
pressures remains arduous and with rising labour and materials costs, so the focus on
improved efficiencies as a method of cost reduction in reverse logistics.

The Endurance Technologies Ltd. which is one of the leading industries in the field of
suspension manufacturer recognizes the need for the better and improves reverse
logistics system. Endurance Technologies Ltd. is a company which always want to
achieve the best reverse logistics system by investing and improving with the help of
new process and technologies.

Reverse logistics play the important role in the industry because of the complexity of
the operations and large number of components. Managing the return process of
empty bins is the prime concern of reverse logistics of Endurance Technologies Ltd.
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As the movement of the material in the bins is very frequently so the amount invested
in the bins is huge. Improving the process of managing empty bins make the process
of reverse logistics very cost efficient. Return time delay of empty bins, damage to
bins and high processing cost were the major concern for the company in reverse
logistics. By redesigning the process of storing of empty bins, providing separate
place for the storage and implemented the new ways of keeping the bins in the stores
help the process more cost effective and time efficient. Changing the design of the
bins and introducing new equipments for handling of empty bins helps in saving the
cost of the process.

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 TABLE OF CONTENTS

1. INTRODUCTION OF REVERSE LOGISTICS .................................................................... 6

1.1 IMPORTANCE OF REVERSE LOGISTICS ................................................................. 9

1.2 REVERSE LOGISTICS ACTIVITIES .......................................................................... 12

1.3 STRATEGIC USE OF REVERSELOGISTICS................................................ 15

2. INDIAN SCENARIO OF REVERSE LOGISTICS .............................................................. 17

2.1 SIZE AND SCOPE OF REVERSE LOGISTICS.............................................. 21

2.2 CURRENT TRENDS OF REVERSE LOGISTICS ........................................................ 23

2.3 REVERSE LOGISTICS INFORMATION SYSTEM ..................................................... 25

3. REVERSE LOGISTICS IN AUTOMOTIVE INDUSTRY .......

3.1 SIZE AND SCOPE OF REVERSE LOGISTICS ...........

4. COMPANY PROFILE ................................................... .

5. REVERSE LOGISTICS CHALLENGES ............................................................................ 36

5.1 RETURN TIME DELAY .......................................................................................... 38

5.2 DAMAGE TO BINS ............................................................................................... 41

5.3 HIGH PROCESS COST .......................................................................................... 44

6. SOLUTIONS ............................................................................................................... 46

7. FUTURE TRENDS IN REVERSE LOGISTICS.................................................................. 52

7.1 RFID IN REVERSE LOGISTICS ............................................................................... 54

7.2 GREEN REVERSE LOGISTICS ............................... .56

8. EXPECTED OUTCOME .............................................................................................. 59

_Toc299734552APPENDIX 1- LIST OF

FIGURES............................................................................. 62

APPENDIX 2- LIST OF TABLES .................................................................................... 63

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REFRENCE ................................................................................................................... 64

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1. INTRODUCTION OF REVERSE LOGISTICS

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 1 INTRODUCTION OF REVERSE LOGISTICS

Twenty-years ago, supply chains were busy fine-tuning the logistics of products from raw
material to the end customer. Products are obviously still streaming in the direction of the end
customer but an increasing flow of products is coming back. This is happening for a whole range
of industries, covering automobiles, electronic goods, pharmaceuticals, beverages and so on. In
1999 the Reverse Logistics Executive Council has announced that firms have been losing
billions of dollars on account of being ill-prepared to deal with reverse flows of the product and
the material.Though the conception of Reverse Logistics dates from long time ago, the
denomination of the term is difficult to trace with precision. Terms like Reverse Channels or
Reverse Flow already appear in the scientific literature of the seventies, but consistently related
with recycling. The Council of Logistics Management (CLM) published the first known
definition of Reverse Logistics in the early nineties as

The process of planning, implementing, and controlling the efficient, cost effective flow of raw
materials, in-process inventory, finished goods and related information from the point of
consumption to the point of origin for the purpose of rescapturing value or proper disposal.

More precisely, reverse logistics is the process of moving goods from their typical final
destination for the purpose of capturing value, or proper disposal. Remanufacturing and
refurbishing activities also may be included in the definition of reverse logistics. Reverse
logistics is more than reusing containers and recycling packaging materials. Redesigning
packaging to use less material, or reducing the energy and pollution from transportation are
important activities, but they might be better placed in the realm of green logistics. If no goods
or materials are being sent backward, the activity probably is not a reverse logistics activity.
Reverse logistics also includes processing returned product due to damage, seasonal inventory,
restock, salvage, recalls, and excess inventory. It also includes recycling programs, hazardous
material programs, obsolete equipment disposition, and asset recovery.Government
legislation,shortening product lifecycles, new channels of distribution are the driving force for
the companies to give importance to reverse logistics.

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The reverse logistics process includes the management and the sale of surplus as well as returned
equipment and machines from the hardware leasing business. We refer to the term "reverse
logistics" as all activity associated with a product/service after the point of sale, the ultimate goal
to optimize or make more efficient aftermarket activity, thus saving money and environmental
resources. Reverse Logistics is a broad term referring to the logistics management and disposing
of hazardous or non-hazardous waste from packaging and products. It includes reverse
distribution which causes goods and information to flow in the opposite direction of normal
logistics activities. In fact one could regard reverse logistics as the implementation at the
company level by making sure that society uses and re-uses both efficiently and effectively all
the value which has been put into the products.

The reverse logistics process can be broken into two general areas, depending on whether the
reverse flow consists primarily of products, or primarily of packaging. The return as a process
was recently added to the Supply-Chain Operations Reference model, stressing its importance
for supply chain management in the future. Reverse logistics used in three different types of
returns which are manufacturing returns, distribution returns and customer returns. Reverse
Logistics has been stretching out worldwide, involving all the layers of supply chains in various
industry sectors. For instance, the automobile industry is busy changing the physical and virtual
supply chain to facilitate end-of life recovery.

The importance of reverse supply chain is demonstrated through a statistic originating in the U.S.
that suggests nearly 20% of everything that is sold is returned. This number obviously varies by
product and channel type; nevertheless, with the high ratio and challenging economic conditions,
addressing returns within the reverse supply chain can help cut costs, increase profit margins or
both. Awareness of the art and science of logistics continues to increase. Additionally, great
interest in reverse logistics has been piqued. Many companies that previously did not devote
much time or energy to the management and understanding of reverse logistics have begun to
pay attention. These firms are benchmarking return operations with best-in-class operators. Some
firms are even becoming ISO certified on their return processes. Third parties specializing in
returns have seen a great increase in the demand for their services.

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1.1 IMPORTANCE OF REVERSE LOGISTICS

In a competitive environment, the philosophy of accepting product returns as an edge over

competitors has resulted in huge challenges to logistics management today, logistical support
means going beyond forward logistics to include product recall, produce disposal and product
recycling etc. The logistics objectives include reverse materials flow system to extend life cycle
support to the product. Reverse logistical competency is the result of worldwide attention
towards environmental & ecological problems. To remain competitive and differentiated, the
organizations across the world are showing speed and reliability in service offerings such as

Replacing defective goods

Repairing of used products
Refurbishing the returned products
Calling back sub-standard or harmful goods
Disposing-off product waste

These services add to the competitiveness of an organization.Operating in a regulatory

environment & create customer value by providing a clean environment through reverse logistics
services without any extra cost to the customer. Return of goods from customer for non
performance, short term rental returns,returns sent to manufacturer for repairs, exchange of new
product for the old ones,goods sent for modification cant be done without the robust reverse
logistics system. The increasing importance of reverse logistics in technology companies forces
the organisation for adapting better reverse logistics system.

Reverse logistics offers several advantages to the company in terms of both tangible and
intangible benefits. In the first instance, companies are able to retrieve defective equipments and
parts which are either salvaged or refurbished and thus reclaims value out of the defective parts.
Secondly, the packaging and defective materials are collected and recycled thereby generating
scrap value back for the company. Thirdly unsold and obsolete equipments are collected point of
sale which encourages the distributors and stockists to confidently buy stocks from the company

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knowing that he can always return unused inventory and not stand to loose in the bargain.
Distributors are more likely to be open to stocking all fast moving as well as slow moving stocks.

In the eyes of the customer and society, the organization stands to gain a good standing and
reputation of being a responsible company which takes care of the e waste and hazardous waste
generated and thus stands out for its corporate governance policies. This market change now
affects companies that previously didn't even consider having a reverse logistics loop and many
of these organisations at the consumer end of market have the most ground to make up.
Companies need to take a "drains up" approach to their reverse logistics operations. Reverse
logistics has been successfully adapted as marketing strategy. Refurbished computers are sold at
cheaper prices by all leading brands and the demand for such laptops seems to be growing. The
spare parts used by the computer manufacturers to service the laptops and computers on warranty
or on sale, include refurbished parts. Many electronic and consumer durable manufacturing
companies offer buy back or exchange offer for the old equipments in lieu of the customer
purchasing a brand new product. In consumer electronics and white goods, the exchange offers
are a big hit during discount sale seasons. Companies do get involved with Reverse Logistics
either because they can profit from it, they have to and they feel socially motivated to do it.
Accordingly, it categorizes the driving forces as economics, legislation and corporate citizenship.

A reverse logistics program can bring direct gains to companies from dwindling on the use of
rawmaterials, from adding value with recovery, or from reducing disposal costs. Independents
have also gone into the area because of the financial opportunities offered in the dispersed
market of superfluous or discarded goods and materials. Even with no clear or immediate
expected profit, an organization can get (more) involved with Reverse Logistics because of
marketing, competition and/or strategic issues, from which are expected indirect gains. In Direct
gains organisation get benefits in input materials, cost, reduction of material and value added
recovery. Anticipating legislation, market protection, green image, improved customer/supplier
relations are the indirect gains.

Legislation refers here to any jurisdiction indicating that a company should recover its products
or accept them back. As mentioned before, in many countries home-shoppers are legally entitled
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of returning the ordered merchandize. Furthermore, globally there has been an increase of
environmentally related legislation, like on recycling quotas, packaging regulation and
manufacturing take-back responsibility. The automobile industry and industries of electrical and
electronic equipment are under special legal pressure. Sometimes companies participate
voluntarily in covenants, either to deal with legislation.

Corporate citizenship concerns a set of values or principles that in this case impel a company or
an organization to become responsibly engaged with reverse logistics. Nowadays indeed many
firms, have extensive programs on responsible corporate citizenship where both social and
environmental issues become the priorities

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1.2 REVERSE LOGISTICS ACTIVITIES

Reverse logistics activities would be the processes a company uses to collect used, damaged,
unwanted (stock balancing returns), or outdated products, as well as packaging and shipping
materials from the end-user or the reseller. Once a product has been returned to a company, the
firm has many disposal options from which to choose. If the product can be returned to the
supplier for a full refund, the firm may choose this option first. If the product has not been used,
it may be resold to a different customer, or it may be sold through an outlet store. If it is not of
sufficient quality to be sold through either of these options, it may be sold to a salvage company
that will export the product to a foreign market. If the product cannot be sold as is, or if the
firm can significantly increase the selling price by reconditioning, refurbishing or
remanufacturing the product, the firm may perform these activities before selling the product. If
the firm does not perform these activities in-house, a third party firm may be contracted, or the
product can be sold outright to a reconditioning/remanufacturing/refurbishing firm. After
performing these activities, the product may be sold as a reconditioned or remanufactured
product, but not as new. If the product cannot be reconditioned in any way, because of its poor
condition, legal implications, or environmental restrictions, the firm will try to dispose of the
product for the least cost. Any valuable materials that can be reclaimed will be reclaimed and
any other recyclable materials will be removed before the remainder is finally sent to a landfill.

Generally, packaging materials returned to a firm will be reused. Clearly, reusable totes and
pallets will be used many times before disposal. Often, damaged totes and pallets can be
refurbished and returned to use. This work may be done in-house, or using companies whose
sole mission is to fix broken pallets and refurbish packaging. Once repairs can no longer be
made, the reusable transport packaging must be disposed of. However, before it is sent to a
landfill, all salvageable materials will be reclaimed. To reduce costs, firms attempt to reuse as
much of these materials as possible, and reclaim the materials when they can no longer be
reused.
The activities shown in Table 1.1 are the types that are generally considered the core of reverse
logistics processes.

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Material Reverse Logistics Activities

Products Return to Supplier

Resell

Sell via Outlet

Salvage

Recondition

Refurbish

Remanufacture

Reclaim Materials

Recycle

Packaging Reuse

Refurbish

Reclaim Materials

Recycle

Salvage

Tab. 1.1 Reverse Logistics Processes

However, from a logistics perspective, the larger issue common to all of these activities is how
the firm should effectively and efficiently get the products from where they are not wanted to
where they can be processed, reused, and salvaged. Also, the firm must determine the
disposition of each product. That is, for each product, the firm must decide the final destination
for products inserted into the reverse logistics flow. Depend upon the use of the product after
return from the customer, the product is sent to the related collecting centre.
Following is the figure showing the process of reverse logistics in an organisation

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 Fig.1.1 Reverse logistics Flow

Reverse logistics can include a wide variety of activities. These activities can be divided as
follows: whether the goods in the reverse flow are coming from the end user or from another
member of the distribution channel such as a retailer or distribution centre; and whether the
material in the reverse flow is a product or a packaging material. These two factors help to
provide a basic framework for characterizing reverse logistics activities, although other
important classification factors exist. Regardless of their final destination, all products in the
reverse flow must be collected and sorted before being sent on to their next destinations. Where
products are inserted into the reverse flow is a prime determinant in the resulting reverse
logistics system. Customer, it may be a defective product, or, the consumer may have claimed it
was defective in order to be able to return it. The consumer may believe it to be defective even
though it is really in perfect order. This category of returns is called non-defective defectives.
If the product has not yet reached the end of its useful life, the consumer may have returned the
product for service, or due to a manufacturer recall. If the product has reached the end of its
useful life, the customer may, in some cases, return the product to the manufacturer so the
manufacturer can dispose of the product properly, or reclaim materials. If a supply chain partner
returns a product, it is because the firm has excess product due to an over-ordered marketing
promotion, or because the product failed to sell as well as desired. Also, the product may have
come to the end of its life, or to the end of its regular selling season.

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1.3 STRATEGIC USE OF REVERSE LOGISTICS

For any company, strategic variables are those that have a long-term bottom-line impact. These
variables must be managed effectively, efficiently and proactively for the viability of the
company. Until recently, most companies concentrated only on business functions such as
finance or marketing as strategic variables. Logistics capabilities were looked at as a strategic
variable during the late 1970s and 1980s. Most companies now look at reverse logistics as
holding an important strategic role, but this function has yet to gain the status of a strategic
variable. Reverse logistics is strategically used to allow forward channel participants, such as
retailers and wholesalers to reduce the risk of buying products that may not be hot selling items.
There is no question that the handling of reverse logistics challenges is an essential, strategic
capability. Strategic uses of reverse logistics capabilities increase the switching costs of
changing suppliers. A goal of almost every business is to lock customers in so that they will not
move to another supplier. There are many ways to develop linkages that make it difficult and
unprofitable for customers to switch to another supplier. An important service a supplier can
offer to its customers is the ability to take back unsold or defective merchandise quickly, and
credit the customers in a timely manner.

In an example, a shoe manufacturer and retailer, Kenneth Cole Productions, encourages

consumers to return old shoes to Kenneth Cole stores during the month of February. In return for
bringing in an old pair of shoes, the customer receives a 20 percent discount on a new pair of
Kenneth Cole shoes. An advertisement for the Kenneth Cole shoe donation program is depicted.
This program has been very successful in providing shoes to those in need. However, these
activities enhance the value of the brand and are a marketing incentive to purchase their
products. In each of these examples, firms are utilizing reverse logistics strategically. They are
acting as good corporate citizens, by contributing to the good of the community and assisting
people who are probably less fortunate than their typical customers. While these policies may
not be the reason all customers purchase their products, they are considered a marketing
incentive. It is using reverse logistics to not just be environmentally friendly, but to incest
customers at a real cost to their businesses.

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Reverse logistics competencies are also used to clean out customer inventories, so that those
same customers can purchase more new goods. Auto companies have fairly liberal return
policies in place, and a large reverse logistics network which allows them to bring back parts
and components from their dealers. These parts are often remanufactured, so that value is
reclaimed. If new parts held by the dealer are not selling well, the auto companies will give the
dealers a generous return allowance, so that they can buy new parts that they really need, and
therefore, service the ultimate consumer better. Most auto dealers, and many dealers in other
industries, are family-based businesses with limited supplies of capital to invest in inventories.
They often have less than state of the art inventory management capabilities. It is in the best
interest of parts suppliers to clean out their inventories, reduce credit-line constraints, and
improve customer satisfaction.

Nearly 20 percent of the firms included in the research use their reverse logistics capabilities to
protect their margins. This strategic usage of reverse logistics is closely related to cleaning out
the channel. Firms cleanse their inventories and the inventories of their customers and their
customers utilizing reverse logistics processes. Some firms are proactive in their management of
downstream inventory, as opposed to merely being reactive. These firms have programs in place
that maximizes inventory freshness. Fresher inventories can demand better prices, which in turn,
protects margin.

Another set of reasons named as being strategic deals with legal disposal issues. Over 25 percent
of the respondents said that legal disposal issues are a major concern. As landfill fees increase,
and options for disposal of hazardous material decrease, legally disposing of non-salvageable
materials becomes more difficult. Firms have to think carefully about these issues. One company
included in this research had previously managed hazardous waste carelessly, and experienced
trouble with the Environmental Protection Agency. The result of this conflict was the primary
determinant in the configuration of its manufacturing and distribution systems. This firm now
wants to make sure that anything that comes out of its facilities is disposed of properly.

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2. INDIAN SCENARIO OF REVERSE LOGISTICS

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2. INDIAN SCENARIO OF REVERSE LOGISTICS

The Facts, Figures, and Realities show that India is one of the Fastest Growing Economies on Earth. Reverse
logistics potential has been realized only recently in India, it is at a very nascent stage and is expected to grow
rapidly in the future. The Indian reverse logistics structure is witnessing a paradigm shift. India is a big country
with big challenges. Just picture it; one sixth of the world's population residing in a country only one third the
sizes of the US. It is estimated that by the late 2020s, India will overtake China as the most populated country
across the globe. Although, like China, the entire country adheres to a single time zone there are 18 major
languages and over 840 regional dialects spoken in comparison to China's one. Couple that with booming
economic growth particularly in the consumer goods market, this means a potential recipe for disaster when it
comes to managing your reverse supply chain. As has been seen time and time again in booming hi-tech
economies elsewhere around the globe, the message from retailer, distributor, and OEM management since the
dawn of the sales explosion has been simple: sell as much as possible, as quickly as possible and dominate the
market share. In India the reverse logistics industry has been left in the shadows, and senior management are only
now starting to realise the complexity and heartache involved with setting up an efficient service supply and
return network.

As many multinationals have found upon starting operations in India, embracing local operations and regulations
rather than fighting them is the key to launching successful operations. A simple "cut and paste" from other
regional operations will stand little chance of success in India. The greatest challenge faced by all in the Indian
reverse supply chain is geographical constraints. There are significant infrastructural issues with anything past a C
or D tier city; communication, transportation reach, power supply and connectivity are intermittent at best. There
are massive supply and return issues with 73% of the ever growing population living in rural areas, hence the
reason that only 5% of sales are through organised retail channel. Disparities between tax regulations of
individual states cause further woe. You can spend months trying to understand the different tax rules and
regulations across states and still be none the wiser, as they seem to change constantly. The government is
currently introducing measures to reduce this pain by implementing GST across India.

The effect of consumer demand is also significant. In the consumer goods industry it is thought that over 80%
of Indian demand for products is for mid to low order goods, so product mix is often not comparable to other
geographies. However, the lower end product ranges does not necessary point towards swap

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rather than repair policies as it might in western countries; labour costs in India are low and many OEMs choose to
manufacture parts within India to avoid cumbersome import regulations and costs. Electrical consumer goods tend
to face particularly high return rates due to the fluctuating power supply across India, which surges as much as it
intermittently cuts out. This leads to decreased "No Fault Found" rates for power related faults, further affecting
material re-utilisation and repair strategies. The impact of all these limitations must reflect in the reverse logistics
strategy of any OEM, retailer or distributor, and perhaps this is why many multinationals struggle to adjust to the
Indian climate. In an industry governed by turn-around-times, the concept of centralised returns hubs and repair
facilities in such difficult logistical conditions must be carefully planned, assessed, and agreed with all parties
before engaging first gear.

Fig. 2.1 Recycling Unit in India

Perhaps the saving grace up until now OEM has been the relative lack of consumer awareness
about return policies and warranties. However, with the help of the internet, consumer
understanding is increasing, causing OEMs such as Toyota, Tata Motors, Nokia, LG, Samsung,
and Canon to inject significant investment towards building world class, realistic and sustainable

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reverse logistics infrastructures which can function in India's somewhat unique environment.
The RLA has now launched the India Focus Committee which is focused on creating a forum to
both encourage and promote reverse logistics best practices and techniques followed across the
globe in India.

In India Print industry is projected to grow rapidly with the help of reverse logistics. Large
amount of stocks are being ordered and kept by the retailer who fail to sell all the copies which
ultimately finds its way through reverse logistics. Reverse logistics is now more important as it
helps in channelizing the unsold copies back to the publisher so as to increase the efficiency and
profitability. In India the reverse logistics have to play a large role in the growth of automobile
industry, IT, retail industry.

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2.1 SIZE AND SCOPE OF REVERSE LOGISTICS

Reverse logistics, though considered as a drain oncompany profits, in todays competitive

markets, more and more manufacturing firms are planning ofincorporating the reverse
logistics system in theirsupply chain process for following reasons:

Growing concern for environment pollution

Government regulations on product recycling and

Waste disposal

Growing consumerism

Stiff competition

The reverse logistics network can be used for variouspurposes such as refilling, repairs,
re-furbishing, re- manufacturing etc. Depending on the nature of theproduct, unit value,
sales volume and distributionchannels.

The reverse logistics market in India is valued at INR 900 bn in 2011 and is expected to grow rapidly
in the future. Of the firms included in this research, reverse logistics costs accounted for
approximately four percent of their total logistics costs. The industry is expected to grow at 18% up
to 2015. Being driven by rising export and import, government investment on infrastructure and the
entry of private players, the industry is undoubtedly on a high growth path. With the market
becoming more competitive especially for the manufacturing sector, outsourcing of reverse logistics
activities is the preferred option. A consistent good performance of the economy is the key force,
driving the growth in the reverse logistics sector. A sustained economic performance has catalysed
the activities of this sector. India's GDP is expected to grow at almost around 8% per year, the Indian
logistics industry which is pegged at INR 900 bn as of 2011 is at an inflection point, and is expected
to reach a market size of over INR 1600 bn in year 2020.

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The industry has generated employment for 4.5 crore people in the country compared to it sector
which employs only approximately 0.43 crore people. The major elements of reverse logistics
costs for Indian industries include transportation, warehousing, inventory management. India's
spending on the logistics industry is much higher than the developed economies. The reason for
high spending on reverse logistics in India is attributed to poor infrastructure facilities, lack of
implementation of it in reverse logistics. In the field of reverse logistics the unorganised sector
is 90% and organised sector is 10%. It provides a large scope for reverse logistics to capture the
unorganised sector. Loses of 14% translates into roughly INR 90 billion for various industries
primarily due to the unorganized section.

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2.2 CURRENT TRENDS OF REVERSE LOGISTICS

Gatekeeping Technology

In order to improve gate keeping, front-line employees need good information about which products to allow into
the reverse logistics flow. Accomplishing this task is not easy. It is made more difficult because many front-line
employees who are making gatekeeping decisions are often inexperienced employees working at or near minimum
wage. Retailers are loath to incur significant costs training these employees, because employee turnover tends to be
high. More training would certainly improve gatekeeping, but using a significant amount of training on an ongoing
basis would not be cost-effective. If it is not feasible to provide the gatekeepers with a high level of training, many
manufacturers have sought to bulletproof the returns process by providing materials for the employees to follow
when taking a return. Such materials would let the employee know what products can be returned, for how long
after purchase, and what parts should be included with the product. For example, in the case of a VCR, the
employee should make sure that the VCR, the remote control, and the cables are all present, and that the remote
matches the VCR. In an effort to improve retailers returns processing, a well-meaning manufacturer may put
together a binder outlining each of the parts that should be present for each one of its products. Unfortunately, these
carefully thought-out materials are often obsolete within months or weeks of printing due to product changes. The
most significant problem these materials face is the fact that they are very paper-intensive. Imagine the scene at a
typical returns desk: a half a dozen or more manufacturers have sent their own three-ring binders to a stores returns
desk, followed by periodical updates. Soon, the returns desk is swamped in materials, and no employee knows
where it all is, or which materials are obsolete or which are current. Rather than trying to sort their way through the
morass of procedures and policies, employees just ignore them.

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 Product Life Cycle Management

Good reverse logistics management can be considered part of a larger concept called product life cycle
management. The product life cycle management concept means that the firm provides the appropriate logistics and
marketing support based, at least in part, on where the product is in its life cycle. The core of the product life cycle
concept is that all products have a finite life and move through various stages. Typically, a product life cycle curve
is divided into four distinct phases during its life as a live product. Those four phases are introduction, growth,
maturity, and decline. Product volume increases through the introductory and growth phases. As a product moves
through the life cycle to maturity, sales level off and begin to decrease. In the declining stage, sales drop and profits
derived from the product diminish. Products in various stages of the life cycle require different types of
management and support. Logistics management is needed in the introduction phase of product.

Centralized Efficient Reverse Supply Chain

An efficient reverse supply chain focuses on processing product returns at an overall lower cost. This supply chain
model sacrifices speed over cost efficiency and is typically applicable to products with shorter time value
depreciation. The cost efficiencies in the supply chain are obtained by centralizing the testing and evaluation of the
returned product at a central facility, after which credit is issued. The retailer or reseller doesnt partake in any
product evaluation at their end. Shipping costs are minimized by shipping the returns to the vendor in bulk. Once
the product condition is determined at the testing facility, it is appropriately disposed of (i.e., sent for restocking,
refurbishing, salvaging or scrapping). This model achieves economies of scale at each level, thus enabling
minimization of processing costs. It is also easier on the retailer, which doesnt have to sort returns or ship them to
multiple locations, as well as the third party credit issuer, which has to issue credit at one time for multiple product
returns. In the previous model, we saw that product differentiation is delayed until all returns are shipped to the
central facility. This can be thought of as a postponement strategy. On the other hand, for products like PCs where
the asset value loss over time is relatively high.

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2.3 REVERSE LOGISTICS INFORMATION SYSTEM

One of the most serious problems that firms face in the execution of a reverse logistics operation
is the dearth of good information systems. Very few firms have successfully automated the
information surrounding the return process. In automotive industry the reverse logistics is
dealing with large number of products. It is very difficult to manage the process without proper
information system. Information system not only reduces the time of process but also increases
the accuracy of the operation. ERP systems are very useful in automotive industry for the process
of reverse logistics. Based on the response of firms included in the research, reverse logisticians
seem to feel that nearly zero good reverse logistics management information systems are
commercially available. Because information systems resources are usually stretched to their
limit, those resources are usually not available for reverse logistics applications. An information
systems department queue for building applications not determined to be core processes is often
greater than one year. Some information systems departments have queues that stretch out
beyond two years. Given this difficulty, reverse logistics applications typically are not a priority
for information systems departments. To work well, a reverse logistics information system has to
be flexible. In addition to the problems described above, automation of those processes is
difficult because reverse logistics processes have so many exceptions. Reverse logistics is
typically a boundary-spanning process between firms or business units of the same company.

Developing systems that have to work across boundaries adds additional complexity to the
problem. In addition to an investment in computer systems, they have designed manual systems
to improve returns processing. They use a three-color system. A store employee receives
instructions about the returned good from decision rules built in to the point-of-sale terminal at
the service desk. The point-of-sale terminal retrieves the return policy for that particular item.
The store clerk places a yellow sticker on the item if it is to be returned to the vendor. A green
sticker means that the item is to be placed on the salvage pallet. If the system indicates red,
the item is an exception article and has to be researched. This particular firm tries to keep the
number of red stickers to a minimum. Because the disposition decision is made by the system
and does not rely on individual judgements for most returns, disposition cycle time is

25
dramatically reduced. Additionally, because of their systems, this firm has the benefit of tracking
returns, and measuring cycle times and vendor performance. This firms buyers have much
better information in their hands when they talk to suppliers and negotiate allowances. Also, the
stores can see if the consumers are committing return abuse, and are trying to take advantage
of the store. These benefits have been realized because this firm has recognized the bottom-line
impact of reverse logistics and assigned its resources to work on reverse logistics systems
problems. Good reverse logistics system is hard to achieve without proper information system.

26
3. REVERSE LOGISTICS IN AUTOMOTIVE INDUSTRY

27
 3. REVERSE LOGISTICS IN AUTOMOTIVE INDUSTRY

The automotive industry is one of the largest industries in the world and deals with the most
expensive of consumer goods. The automobile industry may be the industry with the longest
history of making use of old products. Therefore, it is not surprising that reverse logistics is an
important subject for this industry. The Automotive Industry in India is one of the largest
industries and a key sector of the economy. The Indian automotive industry began its journey
from 1991 with the government's de-licensing of the sector and subsequent opening up for 100
per cent FDI through automatic route. Since then many large global companies have set up their
facilities in India taking the production of vehicle from 2 million in 1991 to in 2011 it touched to
13.18 million units. The entry of global auto-majors into India has significantly altered the
automobile manufacturing scenario in the country. The changes in design and adaptation of
international technologies have enabled the Indian automotive industry to compete globally, and
thus are also exposed to global challenges. Alongside the challenges, there is also a plethora of
opportunities to Indian automotive industry, which needs to be capitalized and can make India
emerge as a successful global player.

For decades, supply chain management focused on forward activities only. The Society of
Motor Manufacturers and Traders even claim that the automotive industrys long term success
will depend on the sectors ability to work towards a sustainable future. This ability includes
environmental as well as social responsibility. The more competitive the Indian automotive
component industry becomes in the global arena, the more inseparable will the principals of
reverse logistics management become to its success and future growth. In a product recovery
environment, the process of transporting, handling and returning of used products from the
customer to a processing facility plays a major role. This process is defined as reverse logistics.
Reverse logistics is often seen as the most complex activity within product recovery
management, as products have to be collected and delivered from many locations to one
28
recovery plant. Due to the fact that remanufacturing also recovers the value originally added to
the raw material. Hence this type of recovery makes a much greater economic contribution per
unit of product compared to recycling.

Fig. 3.1 Automotive Reverse Logistics

Remanufacturing activities first emerged during the Depression and further accelerated during
the Second World War, when all resources were fed into the military activities. In the United
States, the U.S Department of Defence is still the largest remanufacturer in the United States, and
automotive parts account for the largest civilian sector within the remanufacturing sector.
Remanufacturing has played a major role in supplying the aftermarket with remanufactured
replacement parts, ever since. The product range of remanufactured automotive components
comprises engines, clutches, gearboxes and fuel injectors etc. When a vehicle reaches the end of
its life, it eventually ends up at an auto salvage yard or auto dismantler. There, an assessment is
made of the components of the vehicle. Any parts or components that are in working order that
29
can be sold as is are removed and sold. Other components, such as engines, alternators, starters,
and transmissions may be in fairly good condition overall, but need some refurbishing or
remanufacturing before they can be sold to a customer. Once all reusable parts have been
removed from the vehicle, its materials are reclaimed through crushing or shredding. Shredded
metals will generally be reclaimed, but the remaining material, known as fluff, cannot be
recycled. The management of recovery operations significantly differs from conventional
manufacturing operations. As the number of product of automotive industry is high the
importance of reverse logistics also high compare to other sectors. The auto parts
remanufacturing business can be difficult without proper reverse logistic system. All of the
typical problems of reverse logistics are present: varying flows of different products, and many
products without packaging.

Every year, automotive recyclers handle more than 10 million vehicles. Their efforts supply
more than 37 percent of the nations ferrous scrap for the scrap-processing industry. However,
roughly 25 percent (by weight) of the material in a car is not recycled.

30
 3.1 SIZE AND SCOPE OF REVERSE LOGISTICS

Indian auto and auto components industry is increasingly focusing on innovative supply chain
and logistics practices to balance costs, improve service levels and increase product diversity
amid the growing global competition. According to the Auto Parts Remanufacturers Association,
the market for remanufactured auto parts is estimated at $34 billion, annually. The APRA also
estimates there are 12,000 remanufacturing firms including large-scale companies involved in
the auto parts industry. The estimated cost of reverse logistics in the Indian auto and auto
components industry is around 0.5% to 1% of total sales. The reverse logistics segment has been
growing at the same rate for both the auto and auto components industries during the same
period. The 2010-2015 Compound Annual Growth Rate (CAGR) for total RL spending is
forecasted to be 4.2% in automotive industry. Third-party reverse logistics (3PRL) spending is
expected to grow a little faster, with a forecasted 2010-2015 CAGR of 5.2% from its current $6.3
billion size. Auto components reverse logistics is estimated to be around USD2.04 billion in
2006, which is 2.45% of the sales and is likely to increase to USD3.58 billion in 2015.In India,
reverse logistics cost in automobiles industry accounts for 0.5-1% of sales whereas in auto
components industry its around 1-2%. About 90% of the auto component Industry outsources
their reverse logistics requirement to 3PRLs.

31
4. COMPANY PROFILE

32
 4. COMPANY PROFILE

Fig. 4.1 Endurance Plant, Aurangabad

Endurance was established in 1985 as Anurang Engineering Co. Pvt. Ltd. to

manufacture Aluminium Die Casting products at Aurangabad, Maharashtra (India). The
Endurance Group is a global force in Aluminium Casting (including Alloy Wheel),
Suspension, Transmission and Braking products with annual sale revenue of US$ 375
Million (INR. 1758 Crore) from domestic operations and approx. US$ 138 Million
(INR. 650 Crore) from overseas operations for the year 2009-2010. Endurance Group
has 19 Plants across India, Italy & Germany.

Endurance is a name that spells strength and the will to perform. Endurance Core
business is focused on becoming the component partner of choice for leading
Automobile Manufacturers. Assisted by a strict quality regime, interaction with
33
 customers and an eye on emerging needs, Endurance have carved a niche to cater to
some of the world's leading Automotive Manufacturers. 3700 employees work in 16
plants at 5 locations in India and about 625 employees in 5 overseas plants.
A total of 16 plants at prominent locations in India & 3 overseas plants.

Manufacturing Plants

7 Plants at Aurangabad, Maharashtra

5 Plants at Pune, Maharashtra

1 Plant at Manesar, Haryana

1 Plant at Chennai, Tamilnadu

2 Plants at Pantnagar, Uttarakhand

2 Plant at Massenbachha- usen, Germany

1 Plant at Torino, Italy

R & D Centres

2 R&D Centres of Endurance Technologies Ltd. at Aurangabad

2 R&D Centres of Endurance Technologies Ltd. at Chakan, Pune

1 R&D Centre of High Technology Transmission Systems (I)

Pvt. Ltd. at Aurangabad

Quality Policy

Our Policy is to Design and Manufacture Automobile Products of Excellent, Consistent

and Reliable Quality to meet Customer Satisfaction. This will be achieved

34
through continuous Improvement in Technology, Systems, Methods and
Resource Management.

TPM Policy

We at Endurance are committed to practice TPM to improve product reliability and the
working culture, to eliminate losses of all types in a continual manner, to maximize the
operational efficiency and accomplish total internal and external customer satisfaction,
safe and hygienic working environment through total employee involvement.

Environment, Health and Safety Policy

The main of implementing this policy is to maintain and continuously improve

the Environment, Occupational Health & Safety Management.

Vision & Goal

VISION

To continue to grow as a complete solution provider of automotive component

and systems, having global footprint in our chosen product portfolio.

MISSION

35
 To achieve and maintain leadership with a focus on Technology, Product Reliability
and Safety in an environment of Honesty, Transparency and Fairness.To ensure
profitable growth, Endurance to be a First Choice supplier to all its OEMs.

GOAL

Achieve a sustained Zero Customer Complaint for Proprietary Group

(Suspension, Transmission and Braking) and below 500 PPM Customer
Complaint for Casting Group latest from March 2010 onwards.

Major Competitors

Escorts

Gabriel

Munjal Showa Limited

36
 5. REVERSE LOGISTICS CHALLENGES

5 REVERSE LOGISTICS CHALLENGES

Despite the growing important of reverse logistics practises it is not free from barriers and
challenges. For many companies, it is difficult to successfully execute reverse logistics because
of very real internal and external barriers.Importance of reverse logistics relative to other issues,
company policies, lack of systems, competitive issues, management inattention, financial

37
resources, personnel resources, and legal issues are some of the barrier to effective reverse
logistics process. Most of the logistics system is ill-equipped to handle the reverse product flows
as the method of transportation; storage and handling are often very different from those used in
the forward flow. Very few of the firms interviewed manage their reverse logistics costs at the
operational level. Since successfully completing the reverse logistics mission is clearly a
problem for many firms, it is obvious that numerous barriers to good reverse logistics exist.

In the process of reverse logistics organisation often find that there is a loss of time and high cost
of running the process thus finding the solution which help in reduce the time and cost of the
process.Reverse logistics has been around for ages but it is now time to make it a professional
business both practically and scientifically and focus on economic and supply chain issues
relating to reverse logistics

5.1 RETURN TIME DELAY

One of the key barriers in the field of reverse logistics is delay in empty bins/ container return time.
The use of bins in the process of supply chain is very common in the automotive industry.

38
It not only saves the cost of the packing but also save the time to count and measure the material.
Because of many advantages of bins the usage of bins is very common and increasing
phenomena of automotive industry. But the process of return of bins i.e. from company to vendor
is unorganised and need to be improved.

Fig. 5.1 Material on Floor

39
Fig. 5.2 Conventional Packaging

40
 Fig. 5.3 Unorganized Storage of Bins

Delay in return time of empty bins can cause in delaying the next order from the vendor to the
company. Delay in the order hampers the production in the company. If the company is also a
vendor of some company then the chain of delaying the order is going to continue. There is
always a conflict between the vendor and the company for the delay of return process of bins.

41
5.2 DAMAGE TO BINS

Some of the companies are still using the conventional method of packing because of the high
number of damage of bins in the process of reverse logistics. In the era of completion automotive
industries are working on very low margin and always trying to develop new process and
methods which help in reducing the cost of the production.

Fig. 5.4 Damaged Bins

42
Fig. 5.5 Bins Used for Other Purpose

43
 Fig. 5.6 Bins without Partitions

As the number of components in the automotive industry is more compare to other industries, the
number of bins used is more. It is very essential to make a system which can reduce the damage
to bins. Due to damage of bins the vendor had to sent material in conventional packing which
can damage the product due to contact between two products in the transport. Lose can be much
higher in the damage bins due to damage of the product.

44
5.3 HIGH PROCESS COST

Increased global competition and complexity within the Indian automotive sector has led
companies to find ways to maximized value of products, processes, projects, or services within a
total system.

Fig. 5.7 Bins outside of Storage place

45
 Fig. 5.8 Inverted Bins

The maximized value is approached from a customer viewpoint and the related function is
expected to operate at the least cost without affecting its quality and reliability. In this
competitive world the improper handling of bins, more number of work force to manage the
empty bins contribute to high cost process. The primary objective of any process and method is
to be cost efficient without compromising the quality of the process. Due to poor reverse
logistics the process is becoming costly. As reverse logistics is becoming integral part of
automotive industry it is necessary to find out ways to optimise the process cost.

46
6. SOLUTIONS

47
6. SOLUTIONS

FIFO principle for the storage of bins

FIFO (first in first out) method as it name suggest, it governed by the principle that the material
which are received first should be issued first. We can apply this method for the storage of
empty bins and follow the method of that the bins which come first should be sent out first. For
implementing the FIFO we require the proper place for storage. With the help of signing board
which indicate the entry, exit and other necessary information of the storage helps in the storage
of bins. FIFO method helps in avoiding the variation and delay in return time of the bins.

Fig. 6.1 Storage method

48
 Single colour bins for vendor

Endurance has 35 vendors which provide material for the disc brake. 24 i.e.70% of them
provide material in the bins. From 24, six are major vendors. By assigning six different colours
for six different vendors helps in identifying the bins easily and reducing the time and man
power. For all small vendors we can assign a single colour. While assigning the colour to the
bins one thing has to be keeping in mind that the colour of vendor bins and the company bins
should be of different colour.

Install the weighing machine at the dispatch

Fig. 6.2 Weighing Machine

Installing weighing machine at dispatch help in security check. There always a threat of material
theft while returning the empty bins. Before returning the bins person at the dispatch have to
check all the bins. It is a time consuming and tedious process. By installing weighing machine,
the weight of bins is measure at the dispatch. As the bins are standardised which help in maintain
49
the types of bins less. The weight chart of bins is display at the dispatch which help security
person to know the weight of bins. Security person have to check the bins only if the weight of
bins are differ from standard weight.

Separate storage area for empty bins

Provide separate storage area for the storage of empty bins. It not only reduces the time of
vendor to collect the empty bins but also help in maintain the process cost efficient. It also helps
in minimising the loss of bins. In the storage area of empty bins provide separate place for the
storage of vendor bins and company bins. Provide a separate place to major vendor in the
empty bins storage.

Fork lift for handling bins

Fig. 6.3 Fork lift handling

50
Because of less important given to the field of empty bins management, the organisation is not
using equipment for the handling of empty bins. By dragging the empty bins for the movement
within the company damage the bins. By using fork lift either manual or automatic minimise the
damage, cost, time and work force.

Use of metallic partition

The bins should be design by considering the material which is to be carry by the bins. If the
bins the bins have less partition within it then it is better to use metallic partition or any other
material whose strength is more. If the partition in the bins is less, then load coming on the
partition is more which damage the partition. If the partition is damage then the bins are of no
use. By using the metallic partition it helps in minimising the damage.

Storage place near the dispatch area

The storage place for empty bins should be near the dispatch area. It helps vendor to manage
the collecting process of empty bins and vendor can manage by them self. By keeping storage
place near dispatch are minimising the security risk and optimise the utilisation of work force
which indirectly contribute to make the process cost efficient.

51
 Method of keeping empty bins

Fig 6.4Empty bins management

Bins should not be place inverted, it damages the partition of the bins and it is difficult to move
the bins from one place to another. In the plant some of empty bins are use to store the oil and
other material which minimises the life of the bins and at the time of requirement the shortage
of bins take place therefore it is better to use bins only for specified material.

Use DOL Method

DOL is direct online method which is use in the production line. In DOL method the material
come directly on the production line and material is used for the production and empty bins
sent to the storage area. By using this method of production the movement of bins in the plant
is minimise which help in reducing the work force, time and cost of the process.

52
 7. FUTURE TRENDS IN REVERSE LOGISTICS

7. FUTURE TRENDS IN REVERSE LOGISTICS

53
It is clear that in the future, more firms will lavish considerable attention on reverse logistics.
Many firms have only become aware of the importance of reverse logistics relatively recently,
and have yet to realize the strategic importance that reverses logistics can play. To reduce the
cost of reverse logistics, in the future, firms will need to focus on improving the process of
reverse logistics.

Fig. 7.1 &7.2 New trends in reverse logistics

7.1 RFID IN REVERSE LOGISTICS

54
RFID-based solutions have proven to help businesses reduce costs, fine-tune inventory
management, fortify theft detection, and achieve new velocity with real-time visibility into
business processes across the supply chain. The improvement seen in productivity and
operational efficiency dwarfs the gains seen during the Internet era. But given the complexity of
implementing this technology, companies that don't move quickly will wind up at a severe
competitive disadvantage. Keeping track of where reverse logistics products are and where they
are going can be time consuming. Many products do not have their original packaging, or the
packaging may be damaged. In this case, it is very difficult to use RF scanners to track the
movement of products through the reverse logistics flow. Radio Frequency Identification (RFID)
is a relatively new technology that may prove beneficial in these situations. Typical methods for
identifying products are passive. In order to know if a particular product is present, the only way
to find out is to go out into the warehouse and look to see if it is there. RFID, in contrast, is a
more active form of identification. A very small, very low powered radio transmitter is installed
in each product, broadcasting a very faint signal. Despite its small size, an RFID tag contains a
battery that can send out a signal for years. The signal is strong enough, that it can be picked up
by receivers in a warehouse. Each product can send a different signal. You could build 10
million computers, and install an RFID tag in each one, and each one could have a different
signal. There are two ways to use RFID: passively and actively. In passive RFID, a sentry at
the entrance to the warehouse records the identification of each product as it enters the
warehouse. Then, its ID is also registered when it leaves the building. Any items that have
entered, but not left the building must still be in the warehouse. In active RFID, receivers are
placed throughout the warehouse. To find out if a particular item is in the warehouse, the
receivers listen to see if the products signal is being received. If it is being received by more
than one receiver, using triangulation, it is possible to determine where in the warehouse the
product is. Using RFID to assist in the management of returned computers might be a good
option. Placing an RFID tag on the machine at the time of manufacturing would take away the
errors in the paper chain and assist in the life cycle management of the computers. One firm
interviewed in the research has developed a RFID system that simultaneously reads multiple

55
passive tags contained in various cartons on a pallet. Its system scans multiple items without
those items being to be unpacked. For certain products, an RFID tag could be placed on the
circuit board or embedded in the plastic case of the computer. RFID has the potential to aid
reverse logistics operations in a number of ways. As mentioned, it may be helpful in keeping
track of products in the warehouse. The other way it may be beneficial is in gatekeeping. RF tags
may be used in recording the ID of products when they are sold, and this information can be
useful in determining which products to accept for return.

Competitors and suppliers who are just beginning to look at this technology have a huge task in
front of them if they want to be fast followers behind the leaders. RFID is not a simple plug-and-
play technology. The whole point of using RFID is to enable companies to gather real-time data
automatically. The challenge will be to figure out ways to filter, use and share that data. Many
questions remain about how RFID technology will be deployed, such as what information will be
shared between the Retailer and its many suppliers, and how companies will track goods with
both bar codes and RFID tags during the transition period. But the Retailers are moving to
deploy it at the pallet and case level, even before all the answers are known, because the
technology has the capability to improve efficiency, cut costs and boost sales.

7.2 GREEN REVERSE LOGISTICS

56
Concern for the environment is no longer a fringe philosophy; it has without question become
vital. To address this cultural phenomenon, companies are strategically positioning themselves as
stewards of the environment by actively pursuing green initiatives. Those that are proactive stand
to benefit in a number of ways ranging from increased market share and less waste to revenue
generation from recycling programs like Green logistics.

Green logistics refers to understanding and minimizing the ecological impact of logistics. Green
logistics activities include measuring the environmental impact of particular modes of transport,
ISO 14000 certification, reducing energy usage of logistics activities, and reducing usage of
materials. Some green logistics activities can be classified as reverse logistics. For example,
using reusable totes and remanufacturing are both reverse and green logistics issues.
Manufacturers have a variety of options to contribute to the improvement of the environment.
Through proactive initiatives, current processes can be utilized to create efficiencies that both
protect the environment and positively impact the bottom line. While this may seem to be a
daunting task, in most cases, green initiatives can be implemented relatively easily by altering
existing repair and refurbishment operations through recycling and other programs

When it comes to reverse logistics, it is fundamental to have a standard screening process to

determine which units and components are repairable versus those that are destined for recycling
or disposal. The value of the device often determines the desirability to extend its lifecycle.
Several methods will determine whether a device should be returned to the manufacturer. The
most common determination is made by the consumer whose evaluation is based on personal
experience or capability. However, reliable troubleshooting can contribute to extending a
product's value, by preventing returns, avoiding loss of revenue and potential waste.

If a product can be repaired or refurbished and returned to the supply chain, further
environmental efficiencies can be realized in the packaging process. "Generic" packaging and
electronic or Web-based instruction manuals and related information can replace physical
documents that often accompany new devices. This makes the packaging less expensive and also

57
reduces its overall weight, dramatically decreasing shipping costs. Since the products are
available at discounted prices with the same branded quality standards, consumers don't miss the
"flashy" packaging. A centralized distribution model can also create further efficiencies. While
this may not be feasible for all manufacturers, centralizing operations enable asset consolidation,
in addition to streamlining the test, repair and refurbishment process.

If it becomes apparent that a unit cannot be salvaged for continued use and revenue generation,
disposal should be a worst-case scenario. Recycling is a legitimate option that can be less
expensive than repair and refurbishment, offering further revenue potential. What's more, a
beneficial recycling program can be implemented as an extension of current reverse logistics
operations, thereby reducing the need for additional overhead. Reverse logistics is ideally
positioned to collect recycling material to reduce the overall environmental impact of consumer
electronic manufacturers. After repair and refurbishment efforts have been exhausted, companies
should look to the device's components as the next step towards "green" operations.

Since many parts are already sorted during routine test and repair, recycling can be done without
major operational shifts. This can be as easy as sorting materials in specific bins near the
production line. Rather than disposing components in a central depository, employees can be
instructed to assign each material to a specific bin for efficient recycling. A regional recycling
expert who can help institute appropriate programs and facilitate the transport of the material is
key in this process. Proximity is important in reducing transportation costs for a more immediate
impact on the state of the local environment.

Just as with repair and refurbishment, recycling initiatives are best served through a centralized
location. This facilitates the ability to collect and sort raw materials in one location to maximize
volumes, creating economic advantages with recycling outlets. Centralization can also yield
significant savings because processing materials in bulk is typically more efficient and further
reduces shipping costs. Reverse logistics operations with refined repair and refurbishment
processes and a focus on recycling can generate value from a device, regardless of whether it is
usable or not. If made a priority, these processes are a cost-effective way to operate in a "green"
capacity, while enjoying a direct economic benefit.
58
It is important that manufacturers emphasize the importance of these initiatives from the top-
down. Organizational buy-in is essential for success. Beyond the immediate impact of less waste
and recycling revenue, going green can have a number of benefits including improved employee
morale.

59
 8. EXPECTED OUTCOME

8. EXPECTED OUTCOME

60
Individual firms and supply chains will continue to seek ways to achieve competitive advantage.
Reverse logistics will be one way to reduce costs, increase revenues and customer service levels
and help to obtain market advantage. By implementing the above solution in the field of reverse
logistics help the process more time efficient and cost effective.

Following is the cost benefit analysis showing the expected saving per year.

Number of bins require in a company 3000

Cost of bin Rs.300/bin
Total cost of the bins Rs.900000/-
Wages of a worker Rs.250/day
Number of working days 300/year

Tab. 8.1 Detail of Resources

BEFORE:-

Damage to bins annually-----------------------------------------5%

Number of workers require--------------------------------------5

Loss due to damage/yr Rs.45000/-

Wages of workers /yr Rs.375000/-
Total cost/yr Rs.4200000/-

Tab. 8.2 Handling Cost before Solutio

AFTER:-

61
Damage to bins annually----------------------------------------1%

Number of workers require--------------------------------------3

Number of fork lift require--------------------------------------2

Number of weighing machine require-------------------------1

Loss due to damage/yr Rs.9000/-

Wages of workers /yr Rs.225000/-
Cost of the fork lift Rs.70000/-
Cost of the weighing machine require Rs.30000/-
Total cost Rs.334000/-

Tab. 8.3 Handling Cost after Solutions

SAVING:-

Existing Cost 420000/-

Cost after implementation 334000/-
Annual Saving 86000/-

Tab. 8.4 Annual Saving

APPENDICES

62
Appendix 1 - List of Figures

Figure No: Description Page No.

1.1 Reverse Logistics Flow 14

2.1 Recycling Unit in India 19

3.1 Automotive Reverse Logistics 29

4.1 Endurance Plant, Aurangabad 33

5.1 Material on Floor 38

5.2 Conventional Packaging 39

5.3 Unorganized Storage of Bins 40

5.4 Damaged Bins 41

5.5 Bins Used for other Purpose 42

5.6 Bins without Partitions 42

5.7 Bins Outside Storage Place 44

5.8 Inverted bins 45

6.1 Storage method 47

6.2 Weighing Machine 48

6.3 Fork lift handling 49

6.4 Empty bins management 51

7.1 New trends in reverse logistics 53

7.2 New trends in reverse logistics 53

Appendix 2 List of Tables

63
Table
Description Page No
No:

1.1 Reverse logistics process 13

8.1 Detail of Resources 62
8.2 Handling Cost before Solutions 62
8.3 Handling Cost after Solutions 63
8.4 Annual Saving 63

REFRENCE

64
Research Articles:-

1. Dr. Dale S. Rogers and Dr. Ronald S. Tibben-Lembke,( 1998). Going

Backwards: Reverse Logistics Trends and Practices.

2. V. Daniel R. Guide Jr. and Luk N. Van Wassenhove, (Februrary 2002).The

Reverse Supply Chain. Harvard Business Review.

3. Marisa P. de Brito and Rommert Dekker,( August 2004),A Framework for

Reverse Logistics.

Web Sites:-

4. http://www.reverselogisticstrends.com/productcats.php?cat=Free%20Downloads&DOCS
_display=true

5. http://www.eetimes.com/design/smart-energy-design/4013545/Going-green-with-
reverse- logistics

6. www.scintel.com/.../RFID%20Solution%20in%20Reverse%20Logistics

7. http://www.prlog.org/10794150-reverse-logistics-market-in-india-2010-
available- through-bharatbook.html

65