Is Reverse Logistics the right name?

Jim Tompkins from Tomkins Associates has an interesting post regarding the terminology we use for services supply chain.

He makes the very good point that “Reverse Logistics” is often used to describe processes that are actually NOT the forward logistics process in reverse.  I suspect that this is one of the reasons that there is so little recognition and understanding of the concept.

When many folks see the term “service supply chain,” they automatically think “reverse logistics.” But lately, I have come to the conclusion that this is a case of bad terminology. For example, if you ask a child what reverse logistics is, he or she may say that it is logistics done in reverse.

But really, this is not the case. Product isn’t going in a backward direction – back up through the supply chain. It’s not like pressing rewind and seeing a product moving backward to its original state before it was created. On the contrary, it’s more like when you come to a fork in the road and have to decide which path to take.

The fork represents the place and time in the supply chain when a company has to decide what to do with

  • Servicing the products they have previously sold
  • Retrieving the products they previously sold
  • Retrieving inventory from the field – whether it’s returned, recalled, overstock, etc.

Service supply chains represent the options (or paths) for handling these product flows.

Unfortunately, I’d have to say that “service supply chain” is also not the most ideal terminology (although I struggle to come up with a better one).

Jim also goes on to discuss the challenges facing the services supply chain currently (especially in light of the economy).

  • The low degree of outsourcing being done in service supply chain functions;
  • Inadequate management involvement in the process;
  • Lack of sound forecasting techniques for service parts;
  • The amount of wasted effort in the company processes; and
  • Inefficient and ill-suited IT systems to manage service supply chain activities.

I would add that the effect of the routing of management staff has left the traditional decision-makers in this field either out of a job or powerless.  That will be the legacy of this era.

I’m dismayed at how “senior” NZ management of  international companies are unable (or afraid?) to make relatively minor decisions relating to our local market.

Having said that, the opportunities presented by this market far outweigh the threats as far as Service Plus is concerned.  Outsourcing to reduce costs, appointment of new partners, competitors closing down, etc are all working in our favour.

What do you think?  Is there a better term for “Reverse Logistics” or “Services Supply Chain”?  Are there smart ways to deal with the issues facing our industry?  Feel free to comment.

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