Imagine the scenario. You’re done with your holiday shopping, Christmas day comes around and gifts are passed out—some of which are kept and some of which are returned to retail stores. Opened but intact items get put back on the store shelf for resale with an “opened item” sticker slapped on the box. While other items—think electronics like a cell phone or laptop computer—get returned to the manufacturing warehouse, refurbished and resold at a lower cost. Sounds simple, right?
But now imagine that for that one toaster oven you returned, consumers all over the country can be returning that exact same toaster oven made by the same manufacturer. Aside from all the logistics that went into getting that item to a retail store close to you, now those production, distribution and transportation processes are multiplied by the hundreds of returns of that one item. Thus, the reverse logistics process is now more of a challenge than perhaps the initial flow of goods in the forward supply chain.
While automation and standardized processes can help, the crux of the matter is not all reverse logistics processes are the same and a one-size-fits-all approach does not always work. Companies need to ensure they have the expertise on hand to manage reverse logistics—as equally an important function as the forward-moving processes in supply chain.
“It used to be sort of an afterthought to take care of reverse logistics—this part of the supply chain has been ignored by many entities just because you can put excess items on a truck and go put them in a hole in the ground somewhere or push them off to the end of the pier,” said Tom Burton, President of Government Liquidation LLC (of Liquidity Services Inc., which provides full service solutions to sell surplus assets). “But now, this is becoming a job for the experts. The other piece of it is the compliance part. Some of that excess property, you just can’t put in a pile and say ‘take this away’ because there could be hazardous characteristics that could make that property risky—so it needs to be controlled.”
Within the government
For DLA Disposition Services, which handles disposition of property, reverse logistics is always a continuing education process—especially at the federal level. “The pace of current operations has had people focused so much on military deployment, completing their mission and coming back,” explained Ken MacNevin, Chief of Public Affairs for the Defense Logistics Agency (DLA). As a result, “there’s a turnover of people every two to four years at the government level,” MacNevin confirmed.
To address this, DLA Disposition Services rolls out classes at school houses where military are deployed to address such reverse logistics of items out in the field. For example, some of those personnel based in Afghanistan have the responsibility of sorting, separating and deciding which items come back to the United States, explained MacNevin.
Some of the other items that are turned in to DLA Disposition Services include old gun barrels from army tanks and other types of property—such as electronics that have specific metals— that require a different treatment. In the case of USS Long Beach—commissioned in 1961 as the first nuclear-powered guided-missile cruiser—the historic navy cruiser was turned over to DLA Disposition Services who then worked with Government Liquidation, tasked with marketing the cruiser and selling it to an appropriate buyer.