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Initially, Wal-Mart relied on intermediaries in the sourcing process.

Reverse Logistics Philips Case Study

To cut these costs, Wal-Mart decided to do away with intermediaries in the supply chain and started direct sourcing of its goods from the suppliers. The company later engaged the suppliers of other goods, such as cloth and home electronics appliances, directly and eliminated the importing agents.

The purchaser, in this case Wal-Mart, can easily direct the suppliers on how to manufacture certain products so that they can be acceptable to the consumers. In other words, direct sourcing reduced the time that takes the company to source and stocks the products in its stock. Wal-Mart adopted this strategy of sourcing through centralizing the entire process of procurement and sourcing by setting up four global merchandising points for general goods and clothing.

The company instructed all the suppliers to bring their products to these central points that are located in different markets. The procurement and sourcing at centralized places helped the company to consolidate the suppliers. The company has established four centralized points, including an office in Mexico City and Canada. As a result, the company intended to increase centralization of its procurement in North America for all its fresh fruits and vegetables.

Strategic vendor partnerships is another strategy the company is using in the sourcing process. Wal-Mart realized that in order for it to ensure consistency in the quality of the products it offers to the consumers and also maintain a steady supply of goods in its stores at a lower cost, it had to create strategic vendor partnerships with the suppliers. It then made a strategic relationship with these vendors by offering and assuring the long-term and high volume of purchases in exchange for the lowest possible prices.

This enables the company to offer competitive prices for its products in its stores, hence, maintaining a competitive advantage over its competitors whose goods are a more expensive in comparison. Another sourcing strategy Wal-Mart uses is implementing efficient communication relationships with the vendor networks; this is necessary to improve the material flow.

The company has all the contacts with the suppliers whom they communicate regularly and make dates on when the goods would be needed, so that the suppliers get ready to deliver the goods in time. Cross-docking is another strategy that Wal-Mart is using to cut costs in its supply chain. Cross-docking is the process of transferring goods directly from inbound trucks to outbound trucks. Cross-docking helps in saving the storage costs.

Tax-efficient supply-chain management is a business model that considers the effect of tax in the design and implementation of supply-chain management. As the consequence of globalization , cross-national businesses pay different tax rates in different countries. Due to these differences, they may legally optimize their supply chain and increase profits based on tax efficiency.

Supply-chain sustainability is a business issue affecting an organization's supply chain or logistics network, and is frequently quantified by comparison with SECH ratings, which uses a triple bottom line incorporating economic, social, and environmental aspects. Consumers have become more aware of the environmental impact of their purchases and companies' SECH ratings and, along with non-governmental organizations NGOs , are setting the agenda for transitions to organically grown foods, anti-sweatshop labor codes, and locally produced goods that support independent and small businesses.

For example, in July , Wal-Mart announced its intentions to create a global sustainability index that would rate products according to the environmental and social impacts of their manufacturing and distribution. The index is intended to create environmental accountability in Wal-Mart's supply chain and to provide motivation and infrastructure for other retail companies to do the same. It has been reported that companies are increasingly taking environmental performance into account when selecting suppliers. This law requires SEC-regulated companies to conduct third party audits of their supply chains in order to determine whether any tin, tantalum, tungsten, or gold together referred to as conflict minerals is mined or sourced from the Democratic Republic of the Congo , and create a report available to the general public and SEC detailing the due diligence efforts taken and the results of the audit.

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The importance of reverse logistics in your supply chain network

The chain of suppliers and vendors to these reporting companies will be expected to provide appropriate supporting information. Incidents like the Savar building collapse with more than 1, victims have led to widespread discussions about corporate social responsibility across global supply chains. Wieland and Handfield suggest that companies need to audit products and suppliers and that supplier auditing needs to go beyond direct relationships with first-tier suppliers. They also demonstrate that visibility needs to be improved if supply cannot be directly controlled and that smart and electronic technologies play a key role to improve visibility.

Finally, they highlight that collaboration with local partners, across the industry and with universities is crucial to successfully managing social responsibility in supply chains. By reducing resource input and waste leakage along the supply chain and configure it to enable the recirculation of resources at different stages of the product or service lifecycle, potential economic and environmental benefits can be achieved. These comprise e. SCM components are the third element of the four-square circulation framework.

The level of integration and management of a business process link is a function of the number and level of components added to the link. Literature on business process reengineering [62] [63] [64] buyer-supplier relationships, [65] [66] [67] [68] and SCM [18] [69] [70] suggests various possible components that should receive managerial attention when managing supply relationships. Lambert and Cooper identified the following components:. However, a more careful examination of the existing literature [22] [71] [72] [73] [74] [75] [76] [77] [78] leads to a more comprehensive understanding of what should be the key critical supply chain components, or "branches" of the previously identified supply chain business processes—that is, what kind of relationship the components may have that are related to suppliers and customers.

Bowersox and Closs state that the emphasis on cooperation represents the synergism leading to the highest level of joint achievement.

Reverse Supply Chains: Issues and Analysis - Google книги

A primary-level channel participant is a business that is willing to participate in responsibility for inventory ownership or assume other financial risks, thus including primary level components. Third-level channel participants and components that support primary-level channel participants and are the fundamental branches of secondary-level components may also be included. Consequently, Lambert and Cooper's framework of supply chain components does not lead to any conclusion about what are the primary- or secondary-level specialized supply chain components [80] —that is, which supply chain components should be viewed as primary or secondary, how these components should be structured in order to achieve a more comprehensive supply chain structure, and how to examine the supply chain as an integrative one.


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Reverse logistics is the process of managing the return of goods. It is also referred to as "aftermarket customer services". Any time money is taken from a company's warranty reserve or service logistics budget, one can speak of a reverse logistics operation.


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Reverse logistics is also the process of managing the return of goods from store, which the returned goods are sent back to warehouse and after that either warehouse scrap the goods or send them back to supplier for replacement depending on the warranty of the merchandise.

Supply chain systems configure value for those that organize the networks. Value is the additional revenue over and above the costs of building the network. Co-creating value and sharing the benefits appropriately to encourage effective participation is a key challenge for any supply system.

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Tony Hines defines value as follows: "Ultimately it is the customer who pays the price for service delivered that confirms value and not the producer who simply adds cost until that point". Global supply chains pose challenges regarding both quantity and value. Supply and value chain trends include:.

These trends have many benefits for manufacturers because they make possible larger lot sizes, lower taxes, and better environments e. There are many additional challenges when the scope of supply chains is global.

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This is because with a supply chain of a larger scope, the lead time is much longer, and because there are more issues involved, such as multiple currencies, policies, and laws. The consequent problems include different currencies and valuations in different countries, different tax laws, different trading protocols, vulnerability to natural disasters and cyber threats, [81] and lack of transparency of cost and profit. Supply-chain consulting is the providing of expert knowledge in order to assess the productivity of a supply-chain and, ideally, to enhance the productivity.

Supply chain Consulting is a service involved in transfer of knowledge on how to exploit existing assets through improved coordination and can hence be a source of competitive advantage; Hereby the role of the consultant is to help management by adding value to the whole process through the various sectors from the ordering of the raw materials to the final product.

On this regard, firms either build internal teams of consultants to tackle the issue or use external ones, companies choose between these two approaches taking into consideration various factors. The use of external consultants is a common practice among companies. Supply chain professionals need to have knowledge of managing supply chain functions such as transportation, warehousing , inventory management , and production planning. In the past, supply chain professionals emphasized logistics skills, such as knowledge of shipping routes, familiarity with warehousing equipment and distribution center locations and footprints, and a solid grasp of freight rates and fuel costs.

More recently, supply-chain management extends to logistical support across firms and management of global supply chains. Supply chain professionals play major roles in the design and management of supply chains. In the design of supply chains, they help determine whether a product or service is provided by the firm itself insourcing or by another firm elsewhere outsourcing. In the management of supply chains, supply chain professionals coordinate production among multiple providers, ensuring that production and transport of goods happen with minimal quality control or inventory problems.

One goal of a well-designed and maintained supply chain for a product is to successfully build the product at minimal cost. Such a supply chain could be considered a competitive advantage for a firm. Beyond design and maintenance of a supply chain itself, supply chain professionals participate in aspects of business that have a bearing on supply chains, such as sales forecasting , quality management , strategy development, customer service , and systems analysis. Production of a good may evolve over time, rendering an existing supply chain design obsolete.

Supply chain professionals need to be aware of changes in production and business climate that affect supply chains and create alternative supply chains as the need arises.