Category Archives: Nuts & Bolts

“Returns” or a Reverse Logistics Program?

From a previous post…

Reverse logistics programs are fast becoming a major requirement in 3PL and procurement contracts. Not long ago “returns” were considered a nuisance by manufacturers, retailers, and logistics providers. They were handled only as a courtesy to customers. Today, environmental legislation is forcing companies to take responsibility for waste. At the same time consumers expect clear and efficient returns programs when making purchases. The EU is leading the way on reverse logistics with strong legislation and policies. In the US reverse logistics is evolving as progressive companies realize the opportunities to enhance their public image, lower operating costs, and improve productivity. In other words reverse logistics is moving from an added cost “returns” program to a value add process. Here are some recovery options in reverse logistics*

  • Reuse– inspect, clean, and use again for identical or similar purpose, value add
  • Remanufacturing– dismantle and reassemble or use for parts, value add in remanufacturing w/improvements
  • Recycle– sorting process for scrap, no real value add but can recover some costs

While the above  is good business practice it is difficult to plan and execute from a logistics point of view. One reason for this is uncertainty in timing and quantity of returns. Product life cycle and rate of technological innovation play a big role in timing of returns.

Successful reverse logistics implementation involves both external and internal factors. External factors include legislation, customer demand, and incentive. Internal factors include environmental concerns, strategic cost/benefits, volume and quality of returns, resources utilized, and integration and coordination.

  • Customer demand– environmental responsibility is becoming a competitive necessity
  • Incentive– companies need to make returns worth it for end users
  • Environmental concerns– growing trend, not optional going forward
  • Strategic cost/benefit– can help increase sales and asset utilization but will increase costs. Benefit is mostly long run after initial investments in equipment, design, process, and labor.
  • Volume and quality– returns must be managed to avoid scrap as much as possible
  • Resources– use available resources and assets as much as possible
  • Integration and coordination– must use info systems to gain competencies in recovery so reverse logistics does not become a profit drain but a profit center
  • Performance measures– forward logistics measures are not adequate for return logistics. Need to develop different metrics for return logistics. Ex: time required for product recovery, % recyclable/reusable at end of product life, core return rate, % product weight or volume disposed in landfills

 

 

 

 

 

 

 

*Global Logistics and Supply Chain Mgt by Mangan, Lalwani, Butcher, and Javadpour, 2nd Ed, John Wiley & Sons, 2012

LSP’s Customer Service Re-Visited

In my SNHU class this week we discussed logistics KPI’s and customer service offered by logistics service providers. KPI’s are essential to the management of logistics providers as well as to their clients. Some customer service functions, however, are not as easy to measure. Clients of logistics providers include shippers, consignees, importers, and exporters. Whether your logistics provider is a motor carrier, freight forwarder, customs broker, or warehouse company, you will need customer service assistance from time to time. Let’s differentiate:

Request for Information– shipment status, tracking and tracing, claims status, rate requests, invoice balance. This type of customer service is best obtained on line. Take the time to become familiar with your providers’ info systems so you don’t waste time on the phone or waiting for a call back. If your provider does not offer this type of info on line they are either inefficient or very small. To avoid frustration ask yourself if you just need information or action by your provider. Information is easier to get than action.

Action Needed- This level of customer service most likely requires human intervention. Examples include customs or regulatory delays, stopping or diverting shipments, credit issues, special pricing, or real emergencies. While no one likes calling an 800 number, it is a good idea to get your request into the provider’s system as soon as possible as a first step. The difficulty is in reaching the right contact and getting the action you need. If you use a 3PL you may be able to delegate the problem for their handling and have them provide timely updates. If you do not use a 3PL, then you need to manage the issue on your own. One mistake clients make is to rely on their  account rep for all customer service. Account reps are usually on the road and in meetings so this causes delays in action. Another mistake is to depend on the super efficient Mary, Debbie, Tom, or Bill in your provider’s office. Everyone takes vacations and sick days so don’t rely on one person for your customer service needs. A better way to get good customer service is to establish protocols with the help of your providers.

Protocols- Day to day logistics consists of planning, execution, and problem solving. Good planning is essential but not foolproof. Logistics managers deal with changing schedules, equipment failures, weather delays, regulatory issues, and miscommunication on a daily basis. Most problems, however, are not new. The same situations tend to repeat themselves so they can be anticipated. I suggest developing a set of problem solving protocols for the most common issues in your supply chain. This approach will save you time since you will not be starting from scratch when a problem arises. It will also enable your colleagues to act in your absence. A basic protocol defines the problem and lists steps to be followed as well as the resources involved. Your logistics providers can help by providing resources. They should be willing and able to give you relevant operations contacts along with phone and e mail info for your identified problem areas. Your account rep may be surprised when you ask for help developing protocols but they should welcome the opportunity. This method can be a big time saver for them as well. Get commitment from your providers to respond to your requests in an agreed to amount of time. You can update the protocols as needed. Make protocols a part of your meetings with your account reps and you will get better customer service.

Finally, if your account rep says “Just call me”, don’t accept this response.

We help small and medium sized companies stay compliant with Customs and export regulations and manage logistics. Contact mitch@52.91.45.227

Mitch’s Comment on LinkedIn Article

Export Compliance: Whose Job is it Anyway?

Jim Dickeson on LinkedInWhen you export from the United States, does your freight forwarder ask you a lot of questions?  Like, “What’s your Schedule B number?  What’s y…

 

  1. As Elmer Fudd would say…..”you pesky forwarders ask too many questions”, but if your forwarder doesn’t ask questions, time to move on. “

     

    Couldn’t agree more, Bill. That’s why the exporter-forwarder relationship is key. But the exporter still has ultimate risk and responsibility.

Comments in International Trade

Outsource Logistics & Supply Chain Functions: Gain a Competitive Edge

Mitch Kostoulakos CTL,LCB

  • Outsourcing logistics functions can be an effective strategy. In many cases, however, there is little oversight of the 3PL during the life of the contract. Outsourcing must start with defining specific scope of work including special services. Most critical is regular (monthly or at least quarterly) performance reviews of the 3PL by management, not just when problems develop.less

Who’s Inspecting Your Shipments?

In previous posts we have discussed the World Bank Logistics Performance Index for international trade. The Index also contains a domestic component as detailed below:

Domestic LPI

The Domestic LPI looks in detail at the logistics environments in 116 countries. For this measure, surveyed logistics professionals assess the logistics environments in their own countries. This domestic evaluation contains more detailed information on countries’ logistics environments, core logistics processes and institutions, and performance time and cost. This approach looks at the logistics constraints within countries, not just at the gateways, such as ports or borders. It uses four major determinants of overall logistics performance to measure performance:
• Infrastructure,
• Services,
• Border procedures and time, and
• Supply chain reliability.

Here is some of the data for the US from the 2014 report. The low % of physical inspections stands out.

Shipments meeting quality criteria (%) 86.67%
Number of agencies – exports 3
Number of agencies – imports 4
Number of documents – exports 3
Number of documents – imports 3
Clearance time without physical inspection (days) 1 days
Clearance time with physical inspection (days) 2 days
Physical inspection (%) 3.63%
Multiple inspection (%) 2.3%

What About My CTL?

I have  held the CTL certification since 1998. This credential (Certified Transportation and Logistics) is attained by passing a series of exams and completing a research project. The program is rigorous and the certification is well earned. As many AST&L members will attest, the CTL is relatively unknown even within the field of transportation and logistics. I have been asked on occasion if pursuing the CTL is worthwhile and always reply that the effort is a rewarding personal achievement but I cannot honestly say that the CTL has been a big advantage professionally.

Now that AST&L and APICS have announced a proposed merger, I have questions about the CTL long term. The announcement on AST&L’s website includes a statement in the FAQ’s that there will be no changes to designations “in the short term”. I intend to vote in favor of the merger because of the advantages APICS offers in terms of highly recognized certifications and active chapters. I am a member of AST&L’s Education Committee and recently completed the first ever CTL re-certification program. With this significant investment in the CTL, I would like to see stronger affirmation from APICS that the CTL will be maintained and promoted.

How Professional Are You? Comments in AST&L Discussion

Mitch Kostoulakos CTL,LCB commented on a group discussion

American Society of Transportation and Logistics (ASTL)

I’m Thinking About Getting a CTL. Is It Worth It?

Any Thoughts,

Mitch Kostoulakos CTL,LCBThe CTL is a real differentiator for anyone working in the field of transportation and logistics. It is a true professional certification which is earned through a rigorous exam process. I would add that the CTL is not as well known as the APICS designations. I have previously written about professional designations and my article was highlighted by AST&L.

Mitch’s Comments in International Trade Compliance Experts

Compliance problems of small companies

Marketing & Communications at ComplyGlobal™

A lot of the attention is on the Compliance management problems of the larger companies but the challenge for the smaller companies with their limited staff, budgets and bandwidth is perhaps even greater. Cloud based systems probably offer some help but let me ask the compliance experts here – are the challenges real and if so what can small companies do to stay ahead of their compliance requirements?

Mitch Kostoulakos CTL,LCB

Compliance challenges and risks are real. Fines and penalties can have a bigger impact on smaller companies. Limited staffing means no one is keeping up with regulations. Hiring consulting help is good risk management.

Mitch’s Comment on LinkedIn Post : 5S Benefits

Mitch Kostoulakos CTL,LCB commented on: