Question.395 - You will submit a reverse logistics model analysis. You will need to complete section V, and integrate it with prior milestones for a complete, polished artifact containing all of the critical elements of the final project. It should reflect the incorporation of feedback gained throughout the course.
Answer Below:
Organization Selection: Amazon Almost every customer prefers Amazon because it is a platform for diverse goods and services. Since the company has expanded its limitations and provided every essential requirement for the people, the customers are attracted to the platform since they consume time and dont have to build trust for some other company to fulfill their requirements. Moreover, Amazon doesnt take shipping charges, due to which many customers feel it convenient to order essential needs. Shipping charge changes the minds of the customers while ordering any product, which leads to a loss in the market. Millions of customers visit Amazon in order to receive the best quality products, and according to the 2019 data, more than 250 billion dollars revenue Amazon has received. This shows how the organization has gained trust and credibility, and since there is high customer satisfaction, there is a reference that people send from one person to person, and this way, the new customer starts getting involved in buying process from Amazon. It has a wider reach throughout the world maximizes the value of the company. Forward and Reverse Logistics Best Practices Forward logistics is the flow of goods and services from the sources to the final destination, while reverse logistics flows from the final destination to the supply chain. Manufacturing, storing, sourcing, packaging, and transportation are the major components of forwarding logistics that complete production (Pival, 2019). On the other hand, returns, repackaging, recycling, and product disposal are the major components of reverse logistics that help manage the disposition of returned products that aim to ensure the welfare of the environment and the concerns of the customers (Pival, 2019). Usually, forward logistics has been more productive and beneficial in marketing than reverse logistics because of the separation of components. If the components from forwarding logistics are combined to reverse logistics, the latter process will also be effective and will help in the overall production process. Transportation is one of the major components in forwarding logistics that helps the production process to be successful since the products are reached to the customer on time (Hansen et al., 2018). Therefore, this component can be combined in reverse logistics, and transportation can be used similarly while returning the products from the customers to the manufacturers. A safe reach of products to the customers is not sufficient unless the customers are satisfied with whatever they have received, and so reverse logistics needs to be efficient in the same way to deal with the returned products at the same pace and efficiency (Hansen et al., 2018).. The way in forward logistics, the location of transports are tracked in order to reach to the clients or customers at a time, in the same way, the process should be continued in reverse logistics to take back the returned products from the clients and send them back to the manufacturers to initiate the further process (Hansen et al., 2018).. When there is the same resource of optimizing both forward and reverse logistics, the cost will be reduced, and transportation management tools can be accessed in both forms of logistics. Reverse logistics takes place when the forward logistics is not optimized efficiently. Therefore, in order to reduce cost and material, the forward logistics needs to be effective and productive so that it meets all the requirements of customer demand and ensures the best quality product so that there will be less chance of getting the products damaged or repaired, which is taken care by reverse logistics. In order to make the supply chain process strong and optimal, the first thing that needs to be done is to be customer-centric to understand the customer's taste and preference so that it becomes easy for the manufacturer to produce goods that meet all the requirements. The second most important thing that needs to be considered is quality management. When the quality is effective, there is no chance of making the customers dissatisfied. Therefore, when the return of products will-less, the use of transportation for reverse logistics will be less, and this will enhance productivity because, in that way, there will be a reduction of cost of the shared resource. Transportation brings the most efficiency in the production process between the consumers and the producers and helps in building relationships (Hansen et al., 2018). Amazon has always been in need of effective transportation to maximize the overall performance of the supply chain. The comprehensive network of warehouses, management tools, and transportation are the major elements that make Amazon the most popular company worldwide (Snapp, 2017). In such a case, if transportation is shared in reverse logistics, the production rate will be maximized, and the company's growth will be expanded. When shared resources of transportation are utilized in reverse logistics, the coordination costs will be reduced (Snapp, 2017). Moreover, when the transportation system will be shared equally in both forward and reverse logistics, the Amazons trucking industry will increase by 26%. The total miles were estimated to be 38% by 2023 (Snapp, 2017). Since Amazon provides free shipping to the customers, this shared resource will help minimize the shipping costs and make the process cost-effective. If the transportation system becomes effective, it will be one of the profitable moves for Amazon because it will help the company to increase the control in marketing (Snapp, 2017).. Since Amazon has been one of the preferable options for every customer to do online shopping and received the optimal result of customer engagement and loyalty, the productivity will expand and enrich its value at a higher level by combining the transportation service of forward and reverse logistics to develop the logistic system. Value, Velocity and Visibility in forward logistics and reverse logistics Value: In forward logistics, the goods are forwarded to every customer, where the process takes place from the source to the final destination. Here, the importance and value are given to the product since, in this logistics; the flow of goods needs to be smooth and streamlined to reach every user route (Billings, C. (2019). While in reverse logistics, the process takes place in a reverse manner that starts from the destination to the source. In other words, the products are taken from the customers and returned it back to the manufacturers. Therefore, here the value is given more to the customer and their concerns Billings, C. (2019). When the customer sends back any product or raises an issue on a particular order, the main focus shifts from the product to customer satisfaction in order to maintain the relationship between the consumer and the seller. Value is an important indicator of logistics models because the logistic system will not become effective without realizing the value. Velocity: Velocity is another important factor through which the performance of the logistics models is identified. It is evident that reverse logistics is more complex than forward logistics because, in forward logistics, the flow of the goods are passed from one route to another to the end-user, while in reverse logistics, the goods are sent back to the manufacturers through the supply chain which disrupts the normal flow of goods. Therefore, the speed of reverse logistics is based on the supply, while the velocity of forward logistics is based on the demands of the customers. Visibility: Visibility is transparent and effective in forward logistics since every detail can be traced from transportation to the inventory. It helps the shippers develop better communication with customers and provide the best quality of service by updating them and preventing disruptions (Verwijmeren, 2017). But on the other hand, visibility is a challenging indicator in reverse logistics since it is difficult to forecast the demand and supply for the return products and plan them accordingly to put them back to the manufacturing or the supply chain process (Verwijmeren, 2017). In reverse logistics, as soon as the product comes back to the manufacturer, the process of recycling or disposing of starts, and the purpose of doing this is to regain the value of the product by recycling once the quality or any other issues are examined and monitored (Jenkins, 2021). The objective of reverse logistics is to win the customer's trust by satisfying them to repeat the same customers and develop customer loyalty. The reverse logistics process becomes effective when the return process is without delay or procrastination, making the customer believe that their concerns are heard and accepted. When products are returned to the manufacturers, it should be examined whether the product can be repaired and fixed the defective parts or recycled the raw materials to produce something new and valuable (Jenkins, 2021). In this way, reverse logistics add value in the process by minimizing waste into sales that helps in building customer loyalty and strong relationship. Reverse logistics has been one of the effective ways that have made Amazon win a competitive advantage. Amazon is productive in its reverse logistics, which is one of the reasons for customer loyalty customers first preference. Amazon has its own warehouse where the profits are recovered since the products are repaired or refurbished, which adds more productivity. Amazon can resell those products again by minimizing the waste and reducing the costs of material (Snapp, 2017). Moreover, Amazon's customer service is also remarkable since whenever there is a return of the product, the customer gets a quick response from the service center regarding the return of the product and deals with them smoothly. As I have mentioned above, transportation management is one of the aspects that I think needs to be improved combined with forward logistics. Other than this, reverse logistics has a great impact on the production process of Amazon. Environmental Impacts Supply chain management is the process of handling and dealing with the flow of goods and services, starting from the raw materials to the finished products comprising the overall manufacturing process. The supply chain management process starts from forward logistics model and ends in reverse logistics. The supply management process starts with planning goods, sourcing the raw materials and changing them to finished products to delivering, and finally returning the products that are found to be defected or flawed. The returning of the product is the reverse logistic process once the final products reach the desired customers (Nguyen, 2019). The supply chain Amazon takes place from warehousing to the management of inventory to the delivery and return process (Nguyen, 2019). The way the organization deals with the forward logistics that brings to the productivity level and meets the customer demand and interest, in a similar way, Amazon handles reverse logistics in a very effective and smooth way that ensures that nothing should be unused or misused with the returned product Bauer, 2021). Amazon gets the utmost level of customer satisfaction and loyalty because of the trends that the organization practices. Amazon aims to provide the best quality service to the customers and be the most customer-centric platform, and this is ensured through the green manufacturing and eco-friendly process that the company acquires in the market share. There is a third-party seller that monitors and operates half of the sales, and this is done in two ways- FBA (Fulfillment by Amazon) and FBM (Fulfillment by Merchant) (Bauer, 2021). FBA looks after the logistics in both forward and reverse modes (Bauer, 2021). When the third-party seller gets engaged in the inventory management process, Amazon handles the warehouse in order to provide the best fulfillment method. On the other hand, FBM deals with the storage process and taking care of the finished products. One of the potential negative impacts that have been found in Amazon is 15% of carbon footprint, as evident by the sustainability report of 2020 (Bauer, 2021). One of the most important components in which reverse logistics has the greatest potential is the sustainable use of transportation systems that have minimized waste. The reverse logistics of Amazon deals with two major ways- first, to provide free shipping and store costs. Secondly, the organization repairs and refurbishes the returned products to minimize waste and reduce material costs without letting go of the unwanted products (Pratt, 2020). This takes the organization towards sustainable growth and development and ensures a long-term productivity level. Remanufacturing, refurbishing, or recycling of products are the most potential reverse logistics components in Amazon that increase public trust and maximize the organization's value (Pratt, 2020). In reverse logistics, when the products are returned, the quality of the product is examined with the help of quality management tools. Accordingly, the returned products are utilized in a sustainable manner to make use of it and minimize waste disposal. Moreover, Amazon has been implemented one of the most effective and beneficial strategies of sustainability and impact the environment positively, and that is by recycling the packaging system. The curbside-recyclable packaging has been initiated with an intention to cut off the material wastes, replacing plastics with natural fiber and cotton and recycling the use of paper in order to pack the groceries and deliver them to the customers in the most sustainable manner (Pratt, 2020). This was done by taking feedback from both the customers and the employees in order to use the new packaging strategy. Product Life Cycle A product life cycle is the complete cycle of a commercial product starting from manufacturing to its destination. This is a continuous process of starting a journey and ending it like the life cycle of a human (Sraders, 2021). Whenever a product is introduced into a market, the cycle continues till the product declines or is removed completely from the market. There are basically four stages of the product life cycle- introduction, growth, maturity, and decline. In the first stage, a product is introduced in a market with its benefits and to make a product appealing and attractive. (Sraders, 2021).In the second stage, the consumer starts getting used to the product as the buying and selling process begins. During the third stage of maturity, the price or demand of the product declines because of the new products and increased competition. Finally, in the decline stage, the product's life cycle comes to an end as the sale of the product drops and the demand declines (Sraders, 2021). Manufacturing time is the most crucial and important phase of marketing since the very product is based on how effective the manufacturing process is. Moreover, manufacturing generates employment and other economic activities. Therefore, in order to make the manufacturing process effective, the resource acquisition should be well enough to have sufficient equipment in producing goods. In todays competitive marketing, the cost of returns increased highly in reverse logistics due to free shipping and pricing. But there are many strategies and ways to cut down costs in the reverse logistics model. The most important way is to be transparent with the products and their features provided to the customers ("Reduce Costs on Reverse Logistics | JIT Services", 2019). In online shopping, the customers basically rely on the reviews of the particular product before placing the order. Therefore, the reviews and the description should be genuine and exactly the same as they want, which should match once they receive their orders. This will reduce the transportation cost of returning defective or bad quality products ("Reduce Costs on Reverse Logistics | JIT Services", 2019). Moreover, when the reverse logistics model follows sustainable practices like reusing and recycling the materials for packaging, the cost will be reduced for delivering the products to the destination. Since free shipping has been one of the most beneficial competitive advantages, the organization should keep in mind that people are satisfied with their products and services so that there is less chance of returning back the products to the manufacturers ("Reduce Costs on Reverse Logistics | JIT Services", 2019). Reverse logistics is as important as forward logistics in the marketing process. Through the reverse logistics model, the supply chain process becomes effective because many times, after shipping the products, the supply chains become ignorant of the success of the products (Systems, 2021). In such a case, reverse logistics helps an organization to understand and rectify their mistakes so that for the next order, there should not be any return of the product. Through supply chain analytics, reverse logistics can be analyzed and assessed in order to understand the flow of returned items. If the volume of the same returned product is high, the organization will realize that the production process needs to overhaul (Systems, 2021). Reverse logistics helps the organization to realize the loopholes or the cause of the fall in their production process (Systems, 2021). Therefore, the supply chain management becomes successful and complete with the implementation of the reverse logistics model. Amazon's product life cycle is very productive and important in developing supply chain management. The life cycle is affected highly by pricing. In the first stage of introduction, the product's price is kept at a low rate so that people get attracted and appeal to the display of the product (Breslin, n.d.). As soon as it goes to the second product of growth, the price starts increasing with the demand of customers. Eventually, the price falls and rises according to the demand and the life cycle of the product (Breslin, n.d.). Therefore, pricing is the main factor in making the life cycle of Amazon productive (Breslin, n.d.). Amazon has been implemented one of the most effective and beneficial strategies of sustainability and impacts the environment positively, and that is by recycling the packaging system. The curbside-recyclable packaging has been initiated with an intention to cut off the material wastes, replacing plastics with natural fiber and cotton and recycling the use of paper in order to pack the groceries and deliver them to the customers in the most sustainable manner (Redman, 2021). This was done by taking feedback from both the customers and the employees in order to use the new packaging strategy. Remanufacturing, refurbishment, or recycling of products is the most potent component of reverse logistics in Amazon that increases public trust and maximizes the organization's value (Redman, 2021). Reverse Logistics Model Analysis Amazon is efficient in using certain innovative practices in the reverse logistics model to accept and optimize the exchange process. Amazon uses best-in-class software that provides the exchange policy that generates revenue from the refunds. Return-bar location is under operation again in order to receive the returned products across the nationwide network. The shipping cost is very low because of comprehensive shipping. Cardboard-free packaging is used to eliminate carbon emissions by 120 lbs. These are some of the most effective strategies and tools that the company implements to stay in the competition and inspire other companies in order to turn the production process towards sustainability. If these practices were not implemented, the production level would have declined, leading to inflation in inventory management. Since Amazon manages reverse logistics so well, people can never lose trust in the products and services, increasing customer satisfaction to an optimum level. Moreover, the returns become an opportunity to seek new and fresh orders instead of relying and depending on a third-party logistics model. Therefore, reverse logistics plays a very important role in holding the value of the organization and increasing its profitability. References Bauer, M. (2021).?How Amazon Supply Chain Works - Teikametrics. Teikametrics. Retrieved from https://www.teikametrics.com/blog/how-amazon-supply-chain-works/. Billings, C. (2019).?Realize value by connecting your forward and reverse logistics. Ingram Micro Services. Retrieved from https://www.ingrammicroservices.com/blog/forward-and-reverse-logistics-complete-product-lifecycle/.Breslin, S.?The Amazon Product Lifecycle (4 Stages). RepricerExpress. Retrieved from https://www.repricerexpress.com/amazon-product-lifecycle/.Hansen, Z. N. L., Larsen, S. B., Nielsen, A. P., Groth, A., Gregersen, N. G., & Ghosh, A. (2018). Combining or separating forward and reverse logistics.?The International Journal of Logistics Management.Jenkins, A. (2021).?A Guide to Reverse Logistics. Oracle NetSuite. Retrieved from https://www.netsuite.com/portal/resource/articles/inventory-management/reverse-logistics.shtml.K, T. (2019).?Top 10 Tips to Reduce Your Supply Chain Costs - Lean Supply Solutions - Innovative Supply Chain Solutions. Lean Supply Solutions - Innovative Supply Chain Solutions. Retrieved from http://www.leansupplysolutions.com/blog/top-10-tips-reduce-supply-chain-costs/.Nguyen, T. (2019).?Amazon offers 1-day shipping on more items than ever. The environmental toll is huge.. Vox. Retrieved from https://www.vox.com/the-goods/2019/10/16/20917467/amazon-one-day-shipping-bad-for-environment.Pival. (2019).?The Difference Between Forward And Reverse Logistics | PiVAL. PiVAL. Retrieved from https://www.pival.com/news/forward-and-reverse-logistics/.Pease, A.?7 ways to go toe-to-toe with Amazons reverse logistics Happy Return - Retailers. Happy Return - Retailers. Retrieved from https://happyreturns.com/blog/7-ways-to-match-amazons-reverse-logistics.Pratt, M. (2020).?Amazon's Environmental Impact Delivers Climate Change Concerns | Supply Chain Transportation and Logistics Center at the University of Washington. Depts.washington.edu. Retrieved from https://depts.washington.edu/sctlctr/news-events/in-the-news/amazons-environmental-impact-delivers-climate-change-concerns. Snapp, S. (2017).?How to Best Understand Amazon Transportation Services - Brightwork Research & Analysis. Brightwork Research & Analysis. Retrieved from https://www.brightworkresearch.com/best-understand-amazon-transportation-services/.Verwijmeren, M. (2017).?Gaining Better Visibility and Control for Reverse Logistics. Mpo.com. Retrieved from https://www.mpo.com/blog/gaining-better-visibility-and-control-for-reverse-logistics. The Secrets to Successful Reverse Logistics Management for Your Warehouse | how.fm. how.fm. Retrieved from https://www.how.fm/library/successful-reverse-logistics-management-for-your-warehouse/. Reduce Costs on Reverse Logistics | JIT Services. Indianapolis & Huntsville 3PL | Fulfillment | Logistics | Warehousing. (2019). Retrieved from https://jitservices.com/reduce-costs-reverse-logistics/.Redman, R. (2021).?Amazon unveils curbside recyclable grocery delivery packaging. Supermarket News. Retrieved, from https://www.supermarketnews.com/sustainability/amazon-unveils-curbside-recyclable-grocery-delivery-packaging.Sraders, A. (2021).?What Is the Product Life Cycle? Stages and Examples. TheStreet. Retrieved from https://www.thestreet.com/markets/commodities/product-life-cycle-14882534.Systems, N. (2021).?The Importance of Reverse Logistics in Your Supply Chain. Newcastlesys.com. Retrieved from https://www.newcastlesys.com/blog/the-importance-of-reverse-logistics-in-your-supply-chain.More Articles From Operation Management
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