The forward supply chain has been a popular topic in recent years, particularly within the realm of tapping technology to advance the full effort of enterprise operations. Companies have taken action to incorporate automated techniques and enhance sustainability planning in the traditional supply chain. The opportunity ripe for harvest now lies within the reverse supply chain. This broadly defines all surplus inventory and assets, whether they are goods returned to retailers, shelf overstock, or assets sitting idle or at the end of their lifecycle in warehouses. Your team may currently be managing all or some of the activities around the reverse supply chain, estimated at $150bn globally. From asset sorting to tracking and reconciliation reporting across continents, this aspect of the business can no longer be dismissed as simply a "cost of doing business."
Redefining Innovation in the Reverse Supply Chain
The driving focus from management in most organizations is to hone in on core competencies for the business. In doing so, this often leaves a vacancy around areas that still need to be tended to without the resources in place to manage them in a supportable way; the reverse supply chain can fall squarely into this mix. However, most business leaders recognize the importance of creating and managing an efficient supply chain process, and that includes the management and proper redeployment or disposal of assets. In taking a look at your reverse supply chain, an important first step is to know what assets you currently have within your organization. If you don't have a scalable system in place or utilize a paper-tracking system, you may want to consider employing a SaaS tool with authorization levels that your teams can engage with to catalog and track assets. Through a user-friendly system that allows a variety of users to interact across the enterprise, your supply chain teams and department managers can employ an on-demand resource to make decisions around each asset.
The leading asset management tools will have the ability for authorized platform managers to decide how long an asset can sit idle at a location before being sent into a "redeploy" mode where other locations in the company who may have a particular need, can request that asset. Through the application of manager approval parameters your supply chain team defines, assets can be redeployed and free up valuable space where the asset had been housed. In most cases, as long as shipping costs are reasonable, the asset can be redeployed to save the company the expense and time it would have taken to procure a new asset. This can be particularly helpful in multinational companies where specialized or large numbers of assets or equipment are often utilized and in demand. Conversely, if the asset is rendered unnecessary, companies can choose to dispose of the asset through the digital platform.
Improving Financial Recovery
Tracking assets may seem like a cumbersome and unnecessary process, but with implementation of a SaaS system, overall operations can actually be streamlined. In addition, the data you don't know about your assets may be hurting your bottom line. Not only will the digital management of assets save time and money once you have catalogued your assets, but you will be able to extract metrics to help your organization to make better decisions around procurement and storage, and understand the value of your assets. When an asset is sent for disposal, there are recorded decision points to back up that choice, which paint a clearer picture on your reverse supply chain. The process of disposition is also an area where financial recovery as well as operational efficiencies can be positively impacted.
Where the traditional next step after choosing to dispose of an asset may have been the landfill or a local liquidator with limited reach, enterprises now have the potential to innovate by reselling their assets and inventory through online marketplaces. Companies are embracing the concept of online markets to sell surplus assets, understanding there is potential to transform this area from red to black ink on the bottom line, but not always knowing the best practices in this realm. The starting point is to evaluate the qualities and approach of a reputable provider in weighing their potential to be your partner in the process. Variables such as security, compliance, transparency, buyer support and reach, diversity and range of product categories, track record, and personal touch to the client, can help you to narrow down your best options. Choosing a reputable provider allows you to expand the potential recovery for those assets and inventory by leveraging a larger, global buyer base through a competitive bidding process that can result in 20 percent to 30 percent higher return rates.
By actively pursuing opportunities to innovate an enterprise reverse supply chain can, forward-thinking companies can extract unexpected, hidden value. Additionally, through the implementation of intelligent and flexible asset management systems that allow an organization to catalogue, track and manage assets, decision-making for surplus and idle assets is grounded in solid data. When it either doesn't make financial or useful sense to redeploy an asset to another company location, moving assets through online marketplaces extends the useful life of the asset and creates new revenue streams to drive value.
While increasing the expected revenue for those assets, you also gain the unexpected benefit of a built-in sustainability initiative that provides you an opportunity to strengthen your organization's green business practices. Reducing your carbon footprint through reduced fuel costs and waste streams through an integrated process makes more than good business sense; it can buoy employee morale and help reinforce adoption around the new asset management system. Avoiding brand risk through integrated sustainable initiatives that drive value for the business and streamline operations through the reverse supply chain is truly the next wave of innovation for organizations.
Source: Liquidity Services Inc.
Keywords: supply chain, supply chain management, supply chain management IT, supply chain solutions, logistics management, logistics & supply chain, recycling, sustainable supply chains
Timely, incisive articles delivered directly to your inbox.