For recording, slides, presenter bios and more, visit this webinar's full page Food Hubs are delivering on their promise of enabling identity-preserved, primarily local and regional food to enter the wholesale market, enabling small and mid-sized farms access to buyers that would otherwise be unattainable. But aggregation and distribution of food is a very thin-margin business, and hubs take on additional expense working with smaller farmers, providing technical assistance, and other grower and community services. Are food hubs able to support themselves with their operations? What are industry-standard financial and operational benchmarks for food hub businesses?
Yet this has not always been the case. Historically, most of the attention paid to product management has focused on the Value chain profitability full phase or on the volume-shipping portion of the product life cycle. The leaders have greatly broadened this perspective.
The leaders understand, too, the business importance of taking good care of consumers. They know that customer satisfaction holds the key to long-term success and that enabling them to return products without penalty is a big part of the equation.
Both evolved from very simple roots to become retail powerhouses. Sears started in a small train station in Minnesota, while JCPenney began as a tiny general store in Kemmerer, Wyoming. Both of these retailers operated on a then-innovative business philosophy: This innovation, which was designed to increase customer satisfaction, did more than that.
It actually reduced consumer risk of shopping at Sears or JCPenney. This meant that their stores were likely to attract a long-term consumer because the risk associated with shopping there was reduced.
For these two pioneering retailers, taking back product from consumers was a smart marketing move that over Value chain profitability full years consistently translated to business success. This article strives to make the case for building an effective reverse logistics program in your organization.
It describes the importance of this key component of supply chain management and outlines how reverse logistics differs from forward logistics. We then describe some of the key considerations in building a reverse logistics competency and then list key metrics that need to be put in place.
Finally, the article offers some practical steps that readers can take to build momentum for a successful reverse logistics program in their organization.
Important and Different Companies can no longer afford to treat reverse logistics as an afterthought. It needs to be a core capability within the supply chain organization. For years, most firms paid little attention to returns. That has changed as companies increasingly realize that understanding and properly managing their reverse logistics can not only reduce costs, but also increase revenues.
It can also make a huge difference in retaining consumer loyalty and protecting the brand, as we explain more fully below.
Just how big is the opportunity? This represents approximately 0. It has been estimated that supply chain costs associated with reverse logistics average between 7 percent to 10 percent of cost of goods.
Capturing the potential benefits begins by clearly understanding the nature of reverse logistics. First off, it is very different from forward logistics. All of the boxes on a pallet are typically identical and stacked in neat rows. They arrive at the distribution center or retail outlet like clockwork.
The reverse flow is different in a number of ways. First, product arrives whenever customers decide to return an unwanted item, or a retailer decides to pull slow-moving product, or a manufacturer institutes a packaging change, or any number of other possible causes.
Second, the product is not all in new condition. Third, much of the packaging is damaged or shelf-worn. Exhibit 1 summarizes these and other differences between forward and reverse logistics. Drivers of Reverse Logistics The drivers of reverse logistics policies and practices will differ among organizations, in large part depending on the perceived importance of this activity to the business.
In many companies, reverse logistics still is not considered very important—though as we said this is changing.
In some organizations, in fact, it is actually viewed as an embarrassment. This could be the case, for example, where merchandisers responsible for buying product that did not sell well to the consumer are in charge of managing those returns.
Often, they resist taking the hit of unsold and obsolete merchandise.
The capitalist system is under siege. In recent years business increasingly has been viewed as a major cause of social, environmental, and economic problems. "Customer stratification has greatly enhanced our understanding of our customers. We now know which customers maximize our value proposition. Linking customer stratification to our supplier and inventory systems empowers our team to quickly distill the variables affecting risk and reward so they can make better and more profitable business decisions.". Increasing fish farm profitability through aquaculture best management practice training in Egypt.
Because writing down the book value of the slow-moving inventory and moving it to the secondary market is an admission that the purchase was unsuccessful, firms tend to postpone the decision.
The products in question end up losing much more of their value than if the decision to liquidate the inventory was made more quickly. In addition to corporate perceptions, product attributes are a major driver of reverse logistics. The first, and often most important attribute, is the quality of the product being returned.
Items that appear to be first quality are more likely to be worth saving that those that are not. Product size is another attribute that typically determines how return product is handled. The position in the product lifecycle is another attribute that drives returns management strategy and tactics.Vanguard Predictive Planning for Supply Chain matches advanced analytics with a workflow design that fosters communication and tracks the inputs of diverse users.
Service-Profit Chain. Customer satisfaction is a critical component of profitability. Exceptional customer service results in greater customer retention, which in turn results in higher profitability.
→ Customer Care → Create Customer Value: 10 Lessons from Konosuke Matsushita Customer loyalty is a major contributor to sustainable profit growth. "Customer stratification has greatly enhanced our understanding of our customers. We now know which customers maximize our value proposition. Linking customer stratification to our supplier and inventory systems empowers our team to quickly distill the variables affecting risk and reward so they can make better and more profitable business decisions.".
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The iMBA program at the University of Illinois is built around 7 key specializations each dedicated to teaching you a critical business skill. TrackX, Inc. is an enterprise asset management company deploying SaaS-based solutions leveraging multiple auto-ID and sensor technologies for the comprehensive tracking and management of .