Reverse Logistics Five Years Out

“What will be different about reverse logistics in 2020?” was the opening salvo from Dr. Dale Rogers, professor of logistics and supply chain management at Arizona State University and moderator of the 2nd Annual Reverse Logistics & Sustainability Council Conference opening keynote panel.

The biggest game changer, according to Dr. Elliot Rabinovich, also a professor in supply chain management at Arizona State University, is the impact of the “Internet of Things,” (IoT). The Internet of Things refers to a wide spectrum of technologies that include embedding computers in myriad devices such as systems, people, livestock – you name it – enabling both monitoring and remote control. It can be used to enable new applications in energy, medicine, agriculture, transportation, and more. According to Gartner, by 2020 there will be 26 billion IoT devices.

Citing Intel’s ramping up of “Internet of Things”-focused employees from 1,000 to 5,000, Dr. Rabinovich has data behind his predictions. He stated that IoT technologies could help reverse logistics in numerous ways. For example, appliances equipped with IoT technologies can monitor their environment and help diagnose and even make repairs without having to be brought in for repair or returned as damaged. IoT technologies can test and ensure that large devices that are costly to transport, such as large-screen TVs, are in good working condition before they are actually delivered to a customer, thereby avoiding costly “justifiable returns.”

Dr. Rogers asked me about sustainability and reverse logistics in 2020. Citing the CDP’s Climate Action and Profitability Report, I noted that the data shows that those companies with sustainability plans in place are more profitable and provide greater returns to shareholders, making sustainability more and more important in corporate strategy. Reverse logistics can play a critical role in sustainability – efficiencies driven by better logistics translate into wins for sustainability. Using sustainability values as a lens for all aspects of reverse logistics can help drive efficiencies in the reverse supply chain. Showing the economic benefits afforded by applying sustainability practices can provide the business case needed to get C-level buy-in.

Home Depot’s Chuck Johnston pointed out that we want to use what we find in reverse logistics to improve product. He noted that it’s no longer “cradle to grave” thinking but rather “cradle to cradle,” the idea that the original design of a product should be informed by its ultimate end of life – designed so that at the end of its life, its materials can be easily reused in new manufacturing. And beyond cradle to cradle, I added, is the up-cycle, where those unwanted goods can be put to a greater purpose, such as with Arrow’s Digitruck.

The panel was a great way to start this very fun, very informative conference. I felt right at home, of course, because here at Arrow, we’re always thinking “Five Years Out.”

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