Key Indicators of Reverse Logistics for Dairy Industry

For most firms, reverse logistics is a relatively new business concept whose main focus is on
getting the product to the end consumer. Industries, however, shift to reverse logistics to boost
the bottom line as return rates are calculated at 25% of total sales (Petersen and Kumar, 2009).
Most product returns are unsaleable in the dairy sector, like damaged and expired products.
However, when faced with a product recall, these companies realize the importance of reverse
logistics, especially when it draws public attention and regulatory oversight. In a moment of
crisis, reverse logistics needed to perform effectively to protect consumer confidence.

Now we discuss the key reverse logistics indicators empathizing how they are applied across the
different stages of Dairy product life cycle (Introduction, Growth, Maturity & Decline).

 Speed: Speed is critical for short-shelf products. Products that easily deteriorate and lose
their physical, chemical, and/or microbiological attributes require fast operations in
reverse logistics. During the phase of maturity, the velocity shows a greater effect than in
the other stages. Goods with limited shelf-life time allow product design to follow similar
marketing practices in a de facto rate.

 Flexibility: Especially during the first two stages of the product life-cycle flexibility is
critical. Flexibility allows companies to differentiate their products from competitive
ones during the growth stage, since a growing market attracts more competition. It is also
argued that the implementation of greater flexibility is an efficient way of managing
volatility and variance in the operational and organizational reverse logistic structures.
Bai and Sarkis suggested two types of reverse logistics flexibility: operational flexibility,
which includes a variety of dimensions such as product and volume flexibility across
various operational reverse logistics functions, and strategic flexibility, which was
classified into flexibility of network and organizational architecture dimensions.

 Quality/Reliability: Quality varies over the different stages of the PLC and is more
critical in the stages of introduction and growth. The sooner an enterprise identifies
quality issues, the sooner they can be addressed. An efficient logistics system should
therefore incorporate quality control and assessment from the design phase of the product
as early as possible. Several companies have already put in place a system to enhance
customer service processes. Isolated from forward logistics and customer service, reverse
logistics cannot operate. The reverse logistics managers will collect customer input and
suggestions to enhance product design and functionality as soon as possible.
Organizations can use technology to collect information from consumers who contact
customer service in real time and thus organizations can address quality problems early in
the product life cycle. Quality and reliability are aimed at reducing product returns, rather
 than managing them more efficiently. In the case of food product recalls, however,
consumers must be confident that the fault items have been withdrawn from the retailer's
shelves. Customers thus feel confident and reliable for the companies and brands to
which they are loyal.

 Sustainability: Findings show a greater impact on environmental and social factors from
economic performance. Reverse logistics faced high operating costs for many businesses.
Reverse logistics should be included in the sustainable strategy to effectively reduce costs
and achieve better customer service. Organizations need to look for ways to distinguish
themselves from rivals in terms of efficient reverse logistics, and thus have a competitive
advantage. Since all logistics activities entail costs, economic sustainability has become a
priority over sustainability's environmental and social dimensions. As the product
matures to the final stage of their life cycle, when their product life is extended to an
extent that makes them sustainable, branded products benefit. Sarkis, Helms and Hervani
put it this way:
“Recycling and reuse initiatives help to reclaim recyclable materials, therefore generating
additional revenue streams while simultaneously reducing the level of cost of waste
disposal”.

Waste Management

1. Recycling of Catons: These cartons are made up of renewable materials. Such cartons can
be thrown in the recycle bins after use at home. Now these cartons can be collected by
trucks and can be sent to local recycling facility for sorting and baling. At these facilities
they are first sorted from other materials and then cab be shipped to a paper mill after
baling. Next step is pulping where carton is mixed with water thus made into pulp in
order to extract fiber. Next this is then recycled into tissue paper, paper towel and other
green building material.

2. Recycling of plastic bottles and containers: First, they need to collect the bottles from
homes, businesses and other sites. Then, each plastic bottle has to be separated from the
metal, glass, and other things people put into recycling bins. In fact, the plastic bottles are
sorted by the type of plastic they are made from. Then, any food, liquid, or chemical
residues are removed from the bottles.

Last, all the bottles are ground into flakes and shredded in. They are eventually melted
and shaped into tiny pellets, each about the size of a rice grain. The pellets are bundled
and sold to companies which can melt them into many different products. Just think in
your own home of all the plastic toys, tools, electronic gadgets and other plastic stuff.
Many of these are made with recycled plastic.
Green Supply Chain Management

Awareness of the environment is growing day by day. Supply chain has now become such an
important function that it has become inevitable for sustainable development to embed
environmental issues into day-to-day supply chain questions. This has contributed to interest in
Managing the Green Supply Chain. The supply chain definition covers the small amount of
materials from source to point of use. Organizations are investing in effectively managing the
supply chain. Now the focus is on productivity–how we can maximize output with the resources
given input. Also called supply chain as value chain (Extended Enterprise). This is a loosely
connected network of enterprises working together to supply a market with goods or services.

References

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Karim, M.A., Smith, A.J.R., and Halgamuge, S. (2008) ‘Empirical relationships between some
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Olugu, E.U., Wong, KY. and Shaharoun, A.M. (2011) ‘Development of key performance
measures for the automobile green supply chain’, Resources, Conservation and Recycling, Vol.
55, No. 6, pp. 567-579.