Reverse Logistics and Green Supply Chain Management (Essay Sample)

Reverse Logistics and Green Supply Chain Management
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Reverse Logistics
The application of logistic approach to the management of reverse flows allowed allocating a separate area - reverse logistics. It is a broad concept that encompasses the logistics management and reduction or elimination of hazardous and non-hazardous losses container and products. It means the opposite distribution. Reverse logistics is a method of reducing the destructive effects of economic industrial activities on the environment, economy, and society. The movement of goods and information occurs in the opposite direction in relation to the usual logistical activity.
Reverse logistics is the process of planning, implementation and control of logistics flows of goods from the sphere of the circulation and consumption as a result of the reverse distribution of the finished, overdue or used products (Dekker & Fleischmann, 2004). Reverse logistics as an activity is designed to prevent the return of products and reduce the amount of material in the system of direct transfers to ensure the reuse and recycling of materials. The main purpose of reverse logistics is to ensure the efficient economic and ecological processing of waste products and materials in the reproductive cycle. The totality of material and information flows, moving in the opposite direction from their typical movement is the object of management. The organizational and economic relations in the process of reverse movement of material and information flows between the participants of the logistics system are the subjects of management.
The main tasks of reverse logistics are aimed at optimizing costs of reusable goods. The second task is to provide a new channel of the supply chain, distribution, and reverse movement.
The use of packaging materials, satisfying the environmental and economic requirements is the third task. The application of information technology aimed at ensuring the efficient organization of the movement in the opposite direction or development of integrated modules is a significant aspect. It allows providing timely and complete information to all participants in the channel. The development of optimal trajectories of material and information flows aimed at minimizing the costs of the organization and operation of the channel is the task of reverse logistics. Reverse logistics system should include the correct information provision for efficient analysis of the activities. It enables to find out the reason of return and minimize the costs.
According to the Reverse Logistics Association, the amount of returned products and materials is estimated at 150 to 200 billion dollars, it's approximately 0.7 percent of GDP and 7 to 10 percent of the value of the goods. The company spends on the reserve logistics of 3 to 4 percent of the total cost of logistics companies. Companies have the opportunity to save 10 percent of the budget due to implementation of an efficient system of reverse logistics (Greve & Jerry, 2011).
Reversible logistics has many advantages such as the protection of the environment, minimizing costs and saving raw materials, fuel, and energy. The reduction in transport costs and improvement of the reputation of a company are the results of this system as well. Reversible logistics is an efficient tool of the mechanism for regulating technogenic losses of industrial enterprises. It allows them to reduce or eliminate the destructive impact of economic activity on the evolution of the economy and population. The study of the trajectory of movement of all types of flows in the reverse logistics allows identifying inefficient the loss sources, as well as optimizing these streams into a single system in order to minimize costs. Reverse logistics improves the product life cycle through increase the speed of production and reduce costs. The feature of reverse logistics is the policy of customer retention through improving service goals and achieving sustainable development. The second aspect is to increase the customer satisfaction and loyalty while concentrating on the removal of substandard goods (Dekker & Fleischmann, 2004). Feedback gives the opportunity to carry out the conceptual analysis for expression of the real causes of the returned products. Reverse logistics is an integral part of the complex mechanisms of the entire enterprise.
Green Supply Chain Management
Nowadays, green production has become a significant issue for almost every manufacturer and will determine the manufacturer sustainability in the long term with growing worldwide awareness of environmental protection. Green Supply Chain Management is the most significant system strategy used in contemporary companies integrating various operational stages to satisfy market needs and obtain profit, but with increasing government regulations and stronger public awareness in environmental protection, firms today cannot ignore environmental issues, therefore, these are looking for ways to integrate a green strategy all the way through the Supply Chain (SC). Nowadays, many industries have adopted green procurement, green manufacturing, and green distribution thereby launching the Green Supply Chain (GSC).
The aim of corporations implementing Green Supply Chain Management (GSCM) is to meet international expectations and to improve environmental and financial performance. Internal aspects of environmental management and external GSCM, investment recovery, and eco-design are components of GSCM practices (see Appendix A). Studies imply that companies suffering from SC disruptions experienced 33-40% lower stock returns relative to their industry benchmarks, hence, it is significant to adopt a GSCM and avoid these issues (Ghobakhloo, Zulkifli, & Ariffin, 2013).
Green supply chain management is a management concept and organizational strategy, which consists in an integrated approach to environmental planning and management of all the flow of information aimed at measuring the overall economic and environmental benefits (Ghobakhloo, Zulkifli, & Ariffin, 2013). Green logistics is the basis of supply chain management. Green logistics is a system of measures, which includes the use of energy-saving technologies and modern equipment logistics at all levels of the supply chain. It makes it possible to minimize the negative impact on the environment and improve the customer value of products for consumers. All supply chain should be aimed at achieving a common goal and share the principles of green logistics (Bower, Cousins, & Lamming, 2001).
The Advantages of Green Supply Chain Management
Adoption of a GSCM system will help companies observe environmental regulations and public demand as well as it will establish an opportunity to innovate, gain new market and achieve economic performance. The implementation of green supply chain has a positive impact on the financial system. A significant advantage of the green chains is the long-term effects on the financial and economic activities of the organization. Another positive consequence is the stability of the resources. Reduce costs and improve production efficiency...