A while ago, BusinessWeek published an article with an irresistible headline, Reverse Logistics: From Trash to Cash, pointed out by colleague and fellow blogger Bart Preecs. As we see so often when we consider environmental marketing issues, reverse logistics has the potential of combining ecological benefits with costs savings and business efficiencies. Says Business Weekly:
"But with oil and other commodity prices surging, some companies are reconsidering trash. They recognize that used-up products are the sum of their raw materials, energy, and labor: With another wring of the sponge, more value can be extracted. So they're essentially running their supply chains backward, a process called 'reverse logistics.' ... ... ... A recent KPMG study suggests companies can recover up to 0.3% of annual sales this way. (That's $100 million in the case of Best Buy.) Genco has even spun out a reject-pile brokerage business, called Genco Marketplace, that connects sellers and buyers with $5 million a day in junked goods."
The article introduces the reverse-logistics practice at outdoor gear-maker Patagonia, making new products from recaptured materials from products entering the waste cycle.
The reverse-logistics service provider highlighted by BusinessWeek is Genco.
The snappy Web site hints of speed, acceleration, and efficiency, without any hint of environmental messaging. The company's brief mission statement does not address ecological concerns even at a high level. The reverse logistics page offers a detailed description of the service. Genco summarizes the value proposition for its reverse logistics as follows:
"GENCO Supply Chain Solutions understands the reverse-product life cycle and can deliver improved cash flow, customer satisfaction, management and operational control. Through continuous process improvements, we have designed best practices that reverse the cycle of losses and uncover hidden value for our customers. In the process, our customers have experienced:
- A comprehensive return stream for improved cash flow
- Technology that is scalable and reduces costs
- A fully integrated system that reduces cycle times
- A consistent process for improved business controls
- Diverse remarketing that increase liquidation values
- An adaptive transportation process that improves transportation effectiveness."
As you see, these statements are opaque as regards any direct environmental positioning. But you wouldn't be reading this if your imagination couldn't see the huge potential in reverse logistics to help manufacturing businesses, their supply chains, and their customers practice environmental responsibility at a much higher level of accomplishment. And, for them to generate the cost and efficiency advantages that reverse logistics can help bring about.
Reverse logistics has been around for many years, but is not all that well known unless you are in touch with manufacturing and supply-chain management, or deal with ERP systems. One useful introduction, written before green marketing and the backlash against it became ubiquitous, appeared in Material Handling Management in 2001. The newsletter of the Reverse Logistics Association, if you care to sign up and expose your contact information, provides updates on the cautious, but firm, greening of reverse logistics.
