Managing Returns for Increased Reverse Logistics Profits

Extended Producer Responsibilityby Cradle2Cradle? Pg. 28Reducing Returns, Maximizing Loss Prevention and ValidatingWarranty Entitlement in the Retail Industry Pg. 12Reverse Logistics FinancialModel Pg. 44Managing Returnsfor IncreasedReverse LogisticsProfitsPage XXMarch/April 2008

Reverse Logistics associationTo Our ReadersA Letter from the EditorThere’s much talk these days aboutglobal warming and the effects ofgreenhouse gases. I’ve been awarethat manufacturing operations are amajor contributor to CO2 and thatmany are taking steps to decrease oreliminate their carbon footprint.ensuring that venues where we holdevents, fully support recycle efforts,use of reusable dishware, cutleryand linens and to the fullest extentallowable, donate leftover food to localcharities. I thought we were doing apretty good job.will include further investigationfindings and RL Magazine stepstoward reducing our carbon footprint.We’ve reported how many of ourmembers are addressing this issue:Wal-Mart is known for their companywideinitiatives focused on wastereduction,renewable energy andsustainable products; also how HP,Microsoft, Dell, Ericsson, Philipsand Cisco have joined a UnitedNations initiative “that aims toharmonize world policy and legislativeapproaches to electronic recycling andto standardize recycling processes.”And we applaud their efforts.In a recent column, I talked about theefforts RLA takes to utilize “greenmeeting” tactics to minimize our owncarbon footprint – including paperlesstechnology for online registration,confirmation and advertising. Also byWhat I didn’t realize until I startedresearch for this column, is that thepaper industry — which includesmagazines, newspapers, catalogsand writing paper — due to itsconsumption of energy, emits thefourth-highest level of carbon dioxideamong manufacturers .So here we are, very pleased that ourcirculation is rapidly growing, whenat the same time we are contributingto one of the global problems that RLaims to contain.I don’t have the answers… yet;however, I understand that awarenessis the first step. I do know that ifwe’re going to “talk the talk” we needto “walk the walk.” Future columnsReverse Logistics Association Missionur mission is to educate andOinform Reverse Logisticsprofessionals around the world. RLAfocuses on all industries in the reverselogistics process. No matter whatindustry, High Tech, Automotive,Medical/Pharmaceutical, Publishing,Apparel, or Consumer, our goal isto provide RL process knowledgeto all industries. We want to educateeveryone about the Reverse LogisticsProcesses that are common to allindustries. We have been and willcontinue to provide our services at amoderate price to our members.Managing the latest informationin repair, customer service,parts management, end-of-lifemanufacturing, service logistics, fieldservice, returns processing and orderfulfillment (just to name a few) can bea little intimidating, to say the least.Yet, that is exactly what the ReverseLogistics Association provides withour membership services. We servemanufacturers and retailers in a varietyof settings while offering ongoingupdates on market trends, mergers andacquisitions and potential outsourcingopportunities to 3PSPs. We havegained the attention of 3PLs likeFedEx, DHL, USPS and UPS. 3PSPslike Teleplan, Foxconn, Solectron,Canon, Sony and Jabil, along withsmall service providers have found thatthe RLA resources help advertise theirservices. OEMs like Microsoft, HP,Palm, and Sony, along with Retailerslike Wal-Mart, Canadian Tire, Tescoand Best Buy all participate at ourevents. Our online RL Magazine andWeekly News Clippings help OEM,Branded and Retail companies findservice partners that were unknown tothem.6 March/April 2008 • Reverse Logistics Magazine www.RLmagazine.comwww.RLmagazine.comReverse Logistics Magazine • March/April 2008 7

Reverse Logistics associationMessage from President and Founder of RLAChange is inevitable—so our staff here at the Reverse Logistics Association is use to it.Since we started this trade association in 2002, there hasn’t been one week without someof our members asking for another solution, which always results in change. Today, over fiveyears later, the RLA team consist of ten professionals that work around the clock to meet thedemands placed upon our shoulders.We continue to grow our services as requests are made—take a look at where we aretoday.One area of focus is our commitment to sponsor research with Universities and Colleges that have a SupplyChain Management Department focusing strongly on Reverse Logistics. We like to partner with thesedepartments for our long-term RL research.Yes we fund research, but only if the institution has a solid RL platform. We have and will continue to fundresearch. It is important to the members of our association and for educating industry on this important processin the reverse supply chain.Our research team is spearheaded by Philip Danielson (Director of Research).We are happy to welcome three new Advisory Board members who also know the importance of research:Hartmut Liebel of Jabil, Doug Schmitt of Dell and Dr. Dale Rogers of the University of Nevada, Reno. Theywill help RLA focus on solutions that are important to the RL Process.Gailen VickPresidentwww.ReverseLogisticsAssociation.orgwww.RLTShows.comBoard of AdvisorsA Board of Advisors comprised of industry experts hasbeen set up to monitor and assist the Reverse LogisticsAssociation management team in making informeddecisions. Advisors include:John Benardino –Hewlett-PackardCompanyJohn Benardino iscurrently a Director ofReverse Logistics forHP’s Imaging and Printing Group.In his position, John is responsiblefor credit issuance, engineering,remanufacturing, and all return relatedcosts. His product responsibilitiescover printing, digital imaging,supplies, scanners, and shared printing.Dan Gilbert— CiscoSystemsDan Gilbert is VicePresident of WorldwideReverse Logistics atCisco Systems, Inc. Hischarter when joining Cisco in 2005was to define and create a worldclassreverse logistics organization.Dan’s global team is responsible fordriving excellence in product recovery,receiving, inventory, and recyclingoperations, and for transformingreturned product into value for Ciscoshareholders.Jose Garcia—Microsoft CorporationJose Garcia isDirector – Repairand Refurbishing atMicrosoft Corporation.Jose joined Microsoft 4 years ago toestablish World Wide Repair of X-boxconsole from the ground up. Buildinga world class team, he integratedsystems, processes and partnershipswith expert service partners.Charles Johnston –WAL-MART Stores,Inc.Charles Johnston isGeneral Manager at the BentonvilleReturn Center, WAL-MART Stores,Inc. Chuck has been with WAL-MART for the past 13 years andhis responsibilities include Returns,Imports, Exports, Tires and Printingand Mailing Distribution.Steve Jones – FedExCorporationManaging DirectorSupply ChainServices & ReverseLogistics. He is a22-year veteran of the transportationindustry, with extensive experiencein sales and sales management oftransportation and logistics servicesto corporate accounts. Steve wasselected to lead the Supply ChainServices and Reverse Logistics salesorganization with responsibility fornew business development, basebusiness growth and supply chainintegration across all the FedExoperating companies.Hartmut Liebel—Jabil Global ServicesHartmut Liebel wasnamed President,Jabil Global Services(JGS), in October 2004. He joinedJabil as Executive Vice Presidentin July 2002 and was named ChiefOperating Officer in October 2003.Larry Maye – PalmGlobalLarry Maye iscurrently serving asthe Sr. Director ofPalm Global ReverseLogistics. In this capacity he isresponsible for the global repairand logistics for Palm to includerepair operations, customer servicefulfillment, vendorReverse logistics association8 March/April 2008 • Reverse Logistics Magazinewww.RLmagazine.comwww.RLmagazine.comReverse Logistics Magazine • March/April 2008 9

Reverse Logistics associationBoard of Advisors, Continuedmanagement, returns processing andglobal strategy.Dale Rogers isthe Director of theCenter for LogisticsManagement anda Professor ofSupply Chain Management atthe University of Nevada. Dr.Rogers is a frequent speaker,a consultant to several leadingfirms, has been published inseveral logistics journals andhas published several books onlogistics and reverse logistics.His current research interests arefocused on the following: reverselogistics and returns, supply chaintechnologies, e-business supplychain management, and supplychain management.Howard Rosenberg– eBay, Inc.Howard has beenwith eBay for over4 years and runsthe Company’s Trading Platformsbusiness serving companiesinterested in maximizing theirrecovery rates on excess andrefurbished inventory through theReseller Marketplace or throughtheir own, private-label auctionmarketplaces. He has 14 years ofexperience in various capacities,including operating, advisingand investing in, companies inthe consumer product, consumerservices and business servicessectors.Doug Schmittserves as VP ofDell’s Global FieldDelivery organizationwith internationalresponsibility forglobal break\fix field engineers,same day service delivery, spareparts depots, parts planning, servicelogistics, repair, reverse logisticsand Dell’s global commandcenters. In addition to Doug’s roleas VP Global Field Delivery he hasresponsibility for Americas SupportServices. Previously, Doug heldexecutive and senior managementpositions in service and finance atDell, Inc.Doug came to Dell in 1997 fromSequent Computer Systems wherehe held various senior level financepositions. Before Sequent, Dougworked in the banking sector.Tony Sciarrotta –Philips ConsumerElectronicsTony is Director ofReturns Managementat Philips ConsumerElectronics North America. Inthis position, Tony leads returnsreduction and entitlementinitiatives for mainstreamconsumer electronics, and is alsocurrently concerned with furtherdriving the implementation ofelectronic registration for Philipsproducts at leading retailers.Working with Philips Sales,Service, Marketing, and the PhilipsBusiness Excellence Group, Tonyis helping drive several teams toimprove the consumer experienceand subsequently reduce the highrates of products returned with nodefect found.Complete biographies of AdvisoryBoard Members are available fromthe RLA site atwww.reverselogisticstrends.com/company_advisory.php.ReverseLogisticsAssociationFocus &IndustryCommitteesFocus Sub-Committees were set up toprovide a standing forum for ReverseLogistics Professionals to meet on aregional and global basis and discusscommon Reverse Logistics issuesat the RLTS Conferences & Expos.Focus Sub-Committees educate theindustry on reverse logistics:• “Best Practices”• Consumer Satisfaction Issues• Regulations on a Worldwide &Regional Basis• Processes that can reduce costsIndustries we currently monitor are:High TechnologyWireless/TelecommunicationsChairperson – Larry Maye, PalmAdvisor – Gailen Vick, RLACommittee Members:• Art Teshima, Bell Tech.Logix• John Coffield, GENCO• Bob Sullivan, The WirelessSource• Al Mahesh, TOPP ServiceSolutions• Joseph Tarantino, Sprint Nextel• Bill Kenney, OnProcessTechnology• Bryant Underwood, FoxconnNotebook/PCConsumer ElectronicsImagingPrintersData StorageChairperson – Ed Inal, WesternDigitalAdvisor – Dave Whitley, RLACommittee Members:• Matt Fouts, Iomega• David Lick, Seagate Technology• Steve Maglior, Quantum• Gary Gear, Toshiba• Don Collier, Flextronics• Glenn Grube, ModuslinkInformation Technology SolutionsChairperson – Lee Norman, ClearOrbitAdvisor/Secretary – Dave Whitley,Reverse Logistics AssociationCommittee Members:• Shawn McFay, DELL, Inc.• Suresh Sundarababu, DELL, Inc.• Len Wierzbicki, Black & Decker• Matt Fouts, Iomega• Paul Rupnow, Andlor LogisticsSystems• Anne Patterson, FreeFlow• Elliot Klein, Intellareturn• Paul Trulove, Newgistics• Jason Orpe, Microsoft• John Rinehart, IntelSpare Parts ManagementChairperson – Michael Shelor, ShelorConsulting Inc.Advisor/Secretary – Dave Whitley,Reverse Logistics AssociationCommittee Members:• Roy Steele, RoShar Associates• Mark Stetson, Hewlett-Packard• Tim Andreae, MCA Solutions• Traci White, Credence Systems• Matthew Cutone, HorizonTechnology• Scott M. Oberg, Tektronix, Inc.RecyclingChairperson: Jade Lee, Supply-ChainServices, Inc.Robert Gallagher, GallagherConsultingStandardsActing Chairperson - Ken Jacobsen,ConnexusAdvisor/Secretary – Gailen Vick,Reverse Logistics AssociationCommittee Members:• Dr. Dale Rogers, University ofNevada, RenoHolly Elwood, U.S. EPA• Larry Maye, Palm, Inc.• Paul Rupnow, Andlor LogisticsSystems• Norman McEachron, Consultant• Larry Chalfan, Zero WasteAlliance• Bill Guns, SRI Consulting• Clare Lindsay, U.S. EPA• Ken Purfey, AICPA• Emily Rodriguez, The ResultsGroup• Paul Relis, CR&R Waste &Recycling Services• Anthony Schell, ValuLink, LLC.Food & BeverageChairperson – Don Rombach, GENCOCommittee Members:• Bruce Stevenson, SSI• Carl Dubose, Quaker Oats• Oliver Hedgepath, University ofAlaska• Eugene Schachte, HJ Heinz• Lori Kleinschmit, ConAgra Foods• Sharon Joyner-Payne, CarolinaLogisticsAviationChairperson - Bernie Gagnon,Kuehne+NagelAdvisor/Secretary - Jeremy Vick,Reverse Logistics AssociationRetail Consumer ProductsChairperson - Christopher F. Fabian ,Professional Service Solutions, LLCAdvisor - Michelle Warner , ReverseLogistics Association• Randy Collins, ThompsonConsumer Electronics, Inc.• Edward Ross, Home Depot• Randy Whitehead, NationalService Alliance• Steve J. Miller, AdvancedCommunications Technology, Inc.• Dave Keltner, Cerqa• Mary Ellen Smith, PanurgyOEM• Ananth Chaganty, ZSL Inc.• Ishak Kang, Vox UI, LLC• Liane Bandanza, Hewlett-Packard• Brian F. Eddy, SubCon Industries• Shima Adyorough, The HomeDepot• Mark Blevins, ToshibaApparelChairperson - Matt McGrath, CarolinaLogistics ServicesMedical/PharmaceuticalChairperson – Michael Blumberg,Blumberg Advisory GroupCorporate Social ResponsibilityChairperson - John Mehrmann, DataExchange Corporation (DEX)Advisor - Jeremy Vick, ReverseLogistics AssociationIndia ChapterChairperson – Sanjeev Kakar, RTOutsourcing Service LimitedChina ChapterChairperson - Haozhe Chen Ph.D.,East Carolina UniversityAdvisor/Secretary - Jeremy Vick,Reverse Logistics AssociationCommittee Members:• Glenn Norem, eeParts• Yuan Xu, China MarketingAssociation• Meiping Liu , Bostar ConsultingLtd., China• Yu Tian, Ph.D. , Sun Yat-SenUniversityAutomotivePublishingAerospace10 March/April 2008 • Reverse Logistics Magazinewww.RLmagazine.comwww.RLmagazine.comReverse Logistics Magazine • March/April 2008 11

Reverse Logistics:Strengthening theForgotten Supply Chainby Bernie HartAs business practices andglobalization continue to evolve,enterprises strive to expand theboundaries of integration to drivebusiness value. One way to achievethis is by deploying reverse logisticsstrategies. These every day activitiescan have a profound impact on thebottom line. However in order tocapture this value, there are uniquebarriers to integration that must beovercome.What is Reverse Logistics?Reverse logistics is the supply chainthat flows opposite to the traditionalprocess of order, fulfillment andcustomer delivery. It is the combinedprocesses of planning, implementing,and controlling the flow of rawmaterials, in-process inventory,finished goods, and related informationfrom the point of consumption tothe point of origin. Reverse logisticsactivities include customer returns,disposal of excess inventory, and thereturn of obsolete inventory. Alsoknown as the aftermarket serviceand supply chain, reverse logistics iscritical to organizational output. Theability to control these processes forthe purpose of recapturing value orproper disposal of scrap in an efficientand cost-effective manner can yieldquantifiable savings for manufacturingentities.Reverse logistics is a verycomplex process; it is not supplychain backwards. Materialflow characteristics, supply anddemand dynamics, and technologyconsiderations are fundamentallydifferent than what their forwardlogistics counterparts address. Forexample:• Irregular material flow: Returnprocessing is highly dynamicand inconsistent. Factors such asproduct variations and conditions,processing requirements, warrantyand extended warranty provisionsdictate the workflow steps to whicha given return is subject. There isno single supply chain flow; thereverse logistics path can be verycomplicated.• Multi-condition inventory: Supplychain management systems arenot designed to manage inventoryin various condition states, suchas repaired, remanufactured,defective, damaged or obsolete.These conditions are critical factorsin reverse logistics processes; oftenreverse logistics consignments aresmall volume/high value shipmentsof goods which are often keycomponents to a network, henceexpress delivery is often needed.Additionally customs scrutiny ismuch more acute when screeningremanufactured and defective units;inventory forecasting, planning andfinancial management specific tovaluation are also crucial factors.To describe reverse logistics in action,consider a telecommunicationscarrier. Many carriers provide theircustomers an “advance exchangeservice” where an equivalentfunctional unit is delivered to theuser before the defective unit isreturned. The carrier may sourcethe replacement from a 3PL that ismanaged by the original equipmentmanufacturer (OEM). Instead ofreturning the defective unit to the 3PLand then the OEM, the defective unitis routed directly to a repair center fordisposition. Integrated reverse logisticsin this context enables the remotemanagement of the reverse supplychain.Reverse Logistics ChallengesTypically, reverse supply chainshave little automation, and arecharacterized by unknowns and poorlymanaged assets that sit in warehouses,where losses are typically acceptedor absorbed. It is estimated thatmanaging ‘return and repair’ processesalone contribute to at least 10% ofoverall supply chain costs. Ineffectivereverse supply chain processescompound this cost and can reduce anorganization’s profit by approximately30%. An opportunity of thismagnitude has driven many companiesto find new ways to optimize reverselogistics practices and to streamlineoperations and drive profits.The pursuit of profit and competitiveadvantage drive ever-evolving reverselogistic models. Companies todayhave shifted their reverse logisticsoperations to business models thatrequire the coordination of multipletiers of administration and logisticsoperations with outsourced partnerssuch as OEM, contract repair centers,4PL networks etc. If an enterpriselacks an integrated reverse logisticsprocess before outsourcing, anextended enterprise businessmodel will add complexity toan already challenging businessenvironment.Leveraging the Power ofReverse LogisticsThe key to successful reverselogistics is the ability tointegrate business proposaldevelopment, internationaltrade compliance, projectmanagement, contractadministration and productmanagement into dailyoperations across the enterprise.This can only be achievedthrough intelligent, dynamicdecision-making. To optimizeperformance, reverse logisticsfunctions must operate in a mannerthat is both tactical and operational.Tactical plans and schedules reversethe supply chain in order to meetsupply and demand. The operationalteam executes plans in the contextof dynamic and changing businessIt is estimated that managing‘return and repair’ processesalone contribute to at least10% of overall supply chaincosts. Ineffective reversesupply chain processescompound this cost and canreduce an organization’s profitby approximately 30%.environments including frequenttechnology updates, outsourcingof manufacturing or the change of12 March/April 2008 • Reverse Logistics Magazine www.RLmagazine.comwww.RLmagazine.comReverse Logistics Magazine • March/April 2008 13

OEM suppliers, international traderestrictions, foreign exchange controls,etc. Tactical and operational leveldecision-making functions are bynature distributed across reversesupply chains. As a result, thesefunctions must be optimized bothlocally and across the extendedenterprise.The challenge is for corporateentities to overcome managementand execution barriers as they applyto the value that integrated reverselogistics delivers. First, bring reverselogistics to the boardroom. Thelack of recognition for the strategicimportance of reverse logistics andthe cross-functional nature of reverselogistics processes spans multipleorganizations within an enterprise.Executive leadership is fundamentalto the alignment of people, process,technology and financials that hinderthe path to integration. Secondly,execute flawlessly at each point in theprocess. The ability to execute wellacross the reverse logistics lifecycleis the foundation for achievingintegrated reverse logistics. Thosethat are successful understand thatthe dynamics of reverse logisticsintegration requires a new approach toexecution that:• Involves the enterprise as awhole (sales & marketing,finance, project managementsupply chain operations, contractadministrations, customer serviceetc.)• Addresses the complexities oftoday’s supply chain environments• Understands the limitationsimposed by cross-bordertransactions, such as:ooinability to export defectivegoods due to customsregulations requirements foradditional export licenseslevy of additional duties andtaxes on definite restrictionsregarding the remittance offoreign exchange related toexports:• only permit TemporaryExports for repair andreturn• typically impose timelimitation for the repaircycle• requirement to trackserial numbers throughthe repair process• no allowance forwarranty provisions• require proof of priorimportTo build an integrated reverse logisticsenterprise it is essential that youunderstand your customers and theirmarkets. Youneed to:Reverse Logistics is not new, the complexitiesassociated with international business,manufacturer outsourcing, and remote logisticsmanagement have added cost and time toefficient execution.• Involveyour customerin the strategyplanning forrepairs andreturns• Understandconstraintsimposed by customs in yourcustomer marketProvide inventory to facilitate•efficient replenishment• Identify the true costs associatedwith the import of replacementinventoryo Determine if re-manufacturedinventory is permittedo Evaluate complexitiessurrounding export permitso Assure that defective orobsolete inventory maybe recovered i.e. export ofinventory to destinationsother than initial origino Investigate if internationalowarranty provisions arehonored by local authorityDetermine if “like for like”oooperations are permissibleUnderstand qualitycertification requirementsimposed by local authorityClarify if duty reimbursementis possible for DOA (dead ofarrivals) and if it is subject tolimitationsWhile the business of ReverseLogistics is not new, the complexitiesassociated with international business,manufacturer outsourcing, and remotelogistics management have addedcost and time to efficient execution.Leading companies are findingways through the use of technology,process improvements, and anunderstanding of the restrictionsimposed by foreign customs tocontinuously expand the boundaryof integration. Understanding andprovisioning for these factors willassure customer satisfaction anddirectly impact the bottom line. RLMAbout the Author:As the Global ProductExecutive for theLogistics productsuite with the GlobalTrade Services groupat JPMorgan, BernieHart leads a businessof 650+ employeesthat delivers end-to-end globalrisk management and operationalsolutions that drive cost savings,increase efficiency and provide bestin-classcompliance across physicaland financial supply chains. Prior toits acquisition by JPMorgan, BernieHart joined Vastera in October 1999and created the company’s ManagedServices business model which enablesmanufacturers to outsource all orportions of their international tradeand supply chain operations. From1985 to 1999, Mr. Hart held variousmanagement positions at IBM, focusedon International Trade. As the SeniorManager of IBM’s North AmericanDistribution Systems, Mr. Hart wasresponsible for the development andmaintenance of international logisticsapplications with more than twothousand users worldwide in supportof the movement of $20 billion ofgoods annually.Read the PressFull articles available from:RLA News CenterTaking on the E-Waste ProblemOngoing growth in volumes anddisposal rates of electronic waste andscrap pose consumers, governmentsand industry with a growing threatto environmental health and safety.In its 2002 report “Exporting Harm,”the Seattle arm of the Basel ActionNetwork revealed that about 80percent of electronic waste broughtto recyclers in the US is in fact notrecycled here but exported to Asia,most likely China, where “it is melteddown in primitive, environmentallydamaging conditions including thecooking and melting of computercircuit boards in vast quantity.”Five years on, governments,international organizations and ITindustry leaders are now comingtogether to address what is a complexand intricate problem. In March,United Nations University, UnitedNations Environment Program,United Nations Conference on Tradeand Development and a host ofgovernment agencies and leadingelectronics industry participantsestablished the Solving the E-WasteProblem (StEP) program, a globalprivate-public sector cooperativethat aims to “help shape governmentpolicies worldwide and addressissues related to redesign and productlife expectancy, reuse and recycling,and help build relevant capacity indeveloping nations.”Mass Toy Recalls--aManufacturers’ NightmareAlthough this year’s presents havelong been opened, those who supplythem have concerns that just won’t goaway. “In the run-up toChristmas, there can have beenfew more worrying issues for toymanufacturers than the prospectof having to recall an entire line,especially if it is one of their morepopular brands,” concludes anarticle on the Lloyd’s web site(www.lloyds.com).2007 will go down as the yearof product recalls, after a recordnumber of them took place.As a result Lloyd’s notes that“leading industry participants” arereconsidering the potential impactof such an occurrence.Call Center Services• US-based provider of inbound,outbound and e-care solutions• Scalable to virtually any sizeprogram• Proven track record for accurate,courteous customer serviceDell, Jabil and UNR JoinReverse Logistics AssociationBoard of AdvisorsReverse Logistics Association ispleased to announce the recentappointment of three new AdvisoryBoard members.• Mr. Hartmut Liebel is Presidentof Jabil Global Services.• Mr. Doug Schmitt is VicePresident of Dell’s Global FieldDelivery organization.• Dr. Dale Rogers is the Directorof the Center for LogisticsManagement and a Professor ofSupply Chain Management atthe University of Nevada.MAI_ReverseLogisticsAd 12/6/07 9:39 AM Page 1Call Center & Fulfillment ServicesINTEGRATED SOLUTIONS THAT WORKFulfillment Services• Centrally located warehousingclose to major distribution lines• Fully integrated order desk /customer service support• Scalable workforce solutionsguarantee consistent servicelevels and unparalleled customersatisfactiontel: 847-719-5688 e-mail: gcostello@mktalt.comwww.mktalt.com14 March/April 2008 • Reverse Logistics Magazine www.RLmagazine.comwww.RLmagazine.comReverse Logistics Magazine • March/April 2008 15

156 Countries and over 160Languages.Is it any wonder that fewcompanies reallyunderstand how to get themost from EMEA?The term “EMEA” has beenused for many years and hasestablished itself within many jobtitles. However, over the last fewyears the responsibilities for thetypical EMEA service director haveincreased substantially. Until recently,EMEA used to euphemistically referto a handful of developed countriesin Europe. The service model wasconsistent, the network stable andthe issues fairly wellunderstood.Things have changed. The boundariesof the average installed base havebecome substantially broader andwith it, the role of the ServiceDirector has assumed new and diversechallenges. The Europe Union (EU)now comprises of 27 countries with afurther 18 countries in Europe that arenot part of the union. These accessioncountries, together with the emergingcountries of Africa and the rapidlyexpanding market in the Middle East,add their own challenges in languages,customs, freight, taxes, border controlsand quality standards. Isn’t it anywonder that the ServiceSupply Chain needs urgentattention?The significanceof countriescurrentlyoutside ofthe EU suchas Russia,Turkey,Israel andSouthAfricaareStrategic Partnerships NowAvailable at the Touch of a ButtonRL Quote empowers manufacturersand retailers in search of the rightpartner.•••Send RFIs anonymously to ourworldwide database of suppliersScreen your 3PSP responsesFind the right partnerFree Industry Expertise – The RFI responses fromRL Quote come from the top executives at 3PSPswho are on the frontlines of the industry everyday.Anonymity – During the RL Quote process, yourcompany’s identity is kept confidential so youmaintain control over who you allow to contactyou.Wider Selection – RL Quote allows you to broadenyour search at no cost and is a perfect companionto your usual resources.New Technologies – The technologies for ReverseLogistics are evolving everyday. The best way tostay ahead of the technology curve is to allow theindustry experts to evaluate your objectives andoffer alternative solutions.For more information visit RL Quote atwww.rlquote.comPOST RFIwww.RLmagazine.comReverse Logistics Magazine • March/April 2008 17

Managing Returnsfor Increased ReverseLogistics Profitsby Hernan VeraIn the highly competitiveelectronics market, a great dealof attention is paid to the process ofmoving products out the door andinto the hands of the buyer – quickly.This makes a lot of sense; of course,as the window of profitability on anew product shrinks significantlythe longer the product is on themarket. Increasingly, however,savvy electronics companies arerecognizingthat theaftermarketcan nolonger be anafterthought,for reasonsranging fromrevenuepotential toregulatory. It’sthere – wherea productneeds to bebrought infrom the fieldfor repair orreplacement– that reverselogistics takesits rightfulplace as astrategic partof the supplychain.What’s driving this need forbest-in-class reverse logistics? InImagine anorganizationwhere productreturns are notonly processed,but informationabout thoseproducts is fedback into manyfunctions withinthe organization.several segments of the electronicsindustry, higher expectations forreliability – manifested in theadoption of performance basedcontractswhere customers only paythe time they actually use a productis a growing factor. The abilityto recover, repair and return tooperations in a timeframe measuredin hours or days instead of weeks,is a critical differentiator forelectronics manufacturers whoseproducts areconsideredmissioncriticalforcustomers.Marketershave longknown thata criticalmoment ina customerrelationshipis whensomethinggoes wrong.How themanufacturerservices theproduct playsa significantrole in thelikelihoodthat when the next purchase needsto be made, the customer will buyagain from the manufacturer whodelivered a positive experiencewhen a product wasn’t working.20 March/April 2008 • Reverse Logistics Magazinewww.RLmagazine.com www.RLmagazine.com Reverse Logistics Magazine • March/April 2008 21

While difficult to measure, customerloyalty can be a compellingadvantage in markets whereproduct lifecycles are measured inmonths and the margins shrink atexponential rates.Adding to the mix, environmentalcompliance has risen on the scaleof contributors to the need for aOutsourcing ReturnsManagement: Who Controlsthe Process?Consumer and business technologymanufacturers have long outsourcedcore pieces of their supply chain,including aftermarket support.Recognizing that the returns processis a criticalBuilding the World-ClassReverse Logistics ProcessThe National Retail Federationestimates that companies losehundreds of millions of dollars everyyear on returns and repairs, andmany treat that as just part of doingbusiness. The reality is that manyproducts can be re-sold or repairedwith minimal investment – providedthat:PROFESSIONAL E-WASTE SOLUTIONSCUSTOMIZED RECYCLING PROGRAMSCERTIFIED MATERIAL HANDLING - LIVE DESTRUCTIONFULL ENVIRONMENTAL AND REGULATORY COMPLIANCEREVERSE LOGISTICSACCOUNTABLE & SAFEFor More Information, please call:310-282-0330E-RECYCLING.DISPOSITION.DESTRUCTION.MAXIMUM REVENUETOTAL SECURITYPartnerships In Managing Electronic Waste StreamsCorporate Office:1801 AVENUE OF THE STARS, SUITE 702CENTURY CITY, CALIFORNIA 90067 U.S.A310-282-0330Recycling Headquarters:6025 SCOTT WAYCOMMERCE, CALIFORNIA 90040 U.S.A.323-722-5587On the web:WWW.BMIONLINE.USwell-planned and well-executedreverse logistics strategy. Theneed to reclaim and dispose ofhazardous materials in a responsible– and auditable – process, puts newpressure on logistics organizations toestablish state-of-the-art operationsfor accepting and managing productsthat have reached the end of life.Identifying the ProblemManaging returns starts with theanswer to just one question: What’swrong with it? In retail, nearly 70percent of products returned haveabsolutely nothing wrong with them.It’s a metric that most manufacturersdon’t have to deal with, but it makesthe point. Determining the scopeof the problem sets the wheels inmotion. The key is to have a systemin place that diagnoses the problemquickly. Once the problem is defined,immediate action can be taken andopportunities captured.link to customer satisfaction andbrand loyalty requires that originalequipment manufacturers hold theirpartners to the same high standardsthey’d hold if they were doing thework themselves.While the partner may execute theprocess, the strategy and metricsfor success need to be defined – andmeasured – by the brand owner.Ensuring that the outsourcingpartner’s own quality processescan support rigorous principles forexcellence includes the evaluationof people, processes and technologybefore the contract is signed – andthroughout the relationship. After all,a plan is only as good as the peoplewho execute it.Partners who work together tocreate a reliable team that takesresponsibility for the plan – from theoffice to loading dock – ensure thateveryone understands what’s at stakeand knows how they contribute tothe success of the process.The return is evaluated and routedfor necessary action at the point ofacceptance, e.g. same day return tothe field, tear-down, reconfigurationInventory management systems areupdated to reflect availability of theproduct in real-time for quick-turnback to the fieldTraining covers “if, then” scenariosso that employees can act quicklyand efficiently to ensure that returnsare processed swiftly and accuratelyProcesses and protocols aredocumented down to the SKUlevelto deliver near-automatedmanagement, regardless of volumeThe Critical Junction WhereProduction Meets theCustomerMany companies only see threepossible actions when a product isreturned: resell, reclaim or recycle.But there should be many more.The returns stage provides a uniqueopportunity for manufacturers, whocan design, build and execute astrategy that empowers the reverselogistics process to act as a listeningear to the customer.Imagine an organization whereproduct returns are not onlyprocessed, but information aboutthose products is fed back into manyfunctions within the organization.22 March/April 2008 • Reverse Logistics Magazine www.RLmagazine.comwww.RLmagazine.com Reverse Logistics Magazine • March/April 2008 23

RLA CONFERENCE & EXPOProduct development and designteams gain information about fieldfailures, performance issues andmore, fueling improvements andinnovation grounded in real-worldexperience.Call centers and sales offices knowabout re-shelved inventory in realtimeso that viable products are putback into the market quickly.Finance and accounting haveimmediate visibility into shippedproducts for immediate invoicing.Customer service gets additionaldata about buyers’ satisfaction andcan take proactive measures in atimely fashion.Demand information is available towarehouse operations for immediatevisibility into market need for aparticular product – a critical factorin establishing the timeline andurgency for action.For electronicsOEMs, the abilityto turn thereturns processfrom simply a costof doing businessto a profit centermay be the newHoly Grail.It’s a finely tuned environment,firmly rooted between productionand the customer, where informationcaptured can fuel continuousimprovement across the entireenterprise.For electronics OEMs, the ability toturn the returns process from simplya cost of doing business to a profitcenter may be the new Holy Grail.After years of improving operationsperformance through smartersourcing, lean manufacturing,outsourcing and risk management,it appears that the supply chainis coming full circle. Leaders arelooking as never before for ways toapply the lessons learned in otherareas of the supply chain to reverselogistics. Those who succeed willfind there are many opportunities inwhat was once considered the end ofthe road.Hernan Vera is theGroup Director ofMarketing SupplyChain Solutionsat Ryder. He canbe reached athvera@ryder.com.Reverse Logistics AssociationConference & ExpoAmsterdam 2008Dorint Sofitel Airport HotelJoin us for the Fifth Annual RLAConference & Expo in EMEA.Companies from throughout Europeas well as many other internationaldelegates will be in attendance.ODMs and OEMs will be lookingfor 3PSPs that can manage ReverseLogistics in Europe, along withidentifying solutions for Asia and theAmericas.June 16 - June 18, 2008Logistics To Improve Performance”and Successful Outsourcing - RFQs,Contracts and SOWs. Tuesdaymorning sessions start with GailenVick, RLA President, providingIndustry Overview Size and Forecastfollowed by the keynote address.Speaker sessions will commenceafter lunch and continue throughoutthe day and also on Wednesday.Third Party Service Providers(3PSPs) will be exhibiting theirReverse Logistics services andsolutions at the Dorint Sofitel AirportHotel in Amsterdam. The focusof 3PSPs will be to help EuropeanOEMs and Branded companiesbecome aware of RL supporton a global basis. This is a richopportunity for companies to identifyfuture service partners. Here is anopportunity for 3PSPs to sit downface-to-face with the key outsourcingdecision makers from the majorOEMs and Branded Companies.Pre-conference workshops willbe held on Monday, June 16 withtopics such as “Managing ReverseListen to industry leaders and topacademics as they share their ideason such hot topics as returns and lossprevention, revenue opportunitieswithin the reverse logistics process,outsourcing and regulatoryrequirements. See the conferenceschedule for a full listing of sessiontopics.A wide range of reverse logisticscompanies will be in attendancefrom recycling/e-waste to repairand transportation logistics. RLTSAmsterdam provides a greatopportunity to network and share bestpractices. Don’t miss it.24 March/April 2008www.RLmagazine.comwww.RLmagazine.comReverse Logistics Magazine • March/April 2008 25

REVERSE LOGISTICS ASSOCIATION CONFERENCE & EXPO9:00AM -4:00PMMONDAY - JUNE 16, 2008Pre-Conference WorkshopsExpo FloorplanTrack A Track B Track C Track D1:00PM-3:00PMWireless CommunicationsIndustry CommitteeMeetingData Storage IndustryCommittee MeetingSpare PartsManagement IndustryCommittee MeetingInformation TechnologySolutions IndustryCommittee MeetingPrivateSpaceA12FRSEurope(C12)D12TUESDAY - JUNE 17, 20088:30AM10:30AMEXHIBIT HALL OPENSRLA Conference & Expo Amsterdam Welcome AddressIndustry Overview, Size and ForecastGailen Vick - President & CEO, Reverse Logistics AssociationSYKES(A11)11:00AM12:00-1:30PM1:30PM2:30PM3:30-4:00PM4:00PM5:00-7:00PM6:45-9:00PM8:30AM9:00AM10:00AM11:00AMIndustry Keynote AddressBUFFET LUNCH - EXHIBIT HALLTrack A Track B Track CReverse Supply Chain - TheChallengesThinking Forward inReverse LogisticsPanel Discussion: “WEEE& RoHS Impact on OEMs &3PSPs”After-Sales Service As TheDriver For Continuous BusinessImprovementAdded Value of Decision SupportSystems for Strategy Design and3rd Party NegotiationsREFRESHMENT BREAK - EXHIBIT HALLManaging Reverse Logistics ToImprove PerformanceScenarios and Strategies in RetailAsset Protection and RecoveryReverse Logistics: ExtendedEnterprise PerspectivesHow Permanent PackagingSolutions Can Reduce Costs andEnhance RL PracticesRound Table Discussions (Hosted by Speakers) - Hors d’Oeuvres/RefreshmentsAmsterdam Canal Dinner CruiseWEDNESDAY - JUNE 18, 2008EXHIBIT HALL OPENSTrack A Track B Track CCase Study: Implementing aReverse Logistics ProgramPanel Discussion - NewWays to StreamlineOperations, Drive Profits,and Delight CustomersOptimising Reverse Logistics in aGlobalised WorldINTERMISSION - REFRESHMENTS - EXHIBIT HALLStrategic Response To The WEEEDirectiveSectorial Differences in theReverse Logistics Market inFlandersLeveraging Your Reverse LogisticsOperations For Competitive Edgeand AdvantageExhibit HallEntranceRTGIndustries(A10)ClickCommerce(A8)BellIndustries(A7)JabilGlobalServices(A5)Green OakSolutions(A4)GlobalElectronicsRecovery(C8)SiRAS(C7)Spring(C6)Kiala(C5)DEX(C4)Teleplan(C9)DHL(C3)MOBIUS(D8)TechnologyConservationGroup(D7)ElectronicRecycling& Trading(D6)Compuvest(D5)DFBlumbergAssociates(D4)12:00-1:30PMBUFFET LUNCH - EXHIBIT HALL1:30PM2:30PM3:30PM4:00PMPanel Discussion: ReverseLogistics Issues in the RetailIndustryPanel Discussion: Methodsof RL OutsourcingReverse Logistics - ExtendedEnterprise PerspectivesCase Study: Kiala ReverseLogistics ModelClosing Remarks: Gailen Vick, President & CEO, Reverse Logistics Trends, Inc.Who Cares About The Customer?Cradle to Cradle; Product Re-birth,The True Goal of RecyclingLUCKY DRAWING for DVD RW, Portable DVD Players and iPods (you must be present during thedrawing to win)PrivateCycleon(A2)SpaceImageMicrosystems(A1)TheServiceBusiness(C1)PELI(D1)26 March/April 2008 • Reverse Logistics Magazine www.RLmagazine.comwww.RLmagazine.com

RLA CONFERENCE & EXPO LAS VEGAS 2008-02-11LargestReverseLogisticsEvent EverThe Reverse Logistics Associationhosted the 5th Annual RLAConference & Expo in LasVegas on February 4-6, 2008.Attendance was at a recordhigh of over 1,400 registeredattendees but even more importantwas the number of companiesrepresented–over 600.Companieswith interestsas diverseas Procter& Gamble,Fujitsu, TheShoppingChannel andMattel werein attendance.Thanks toattendees,speakers andexhibitors, thiswas the largestever worldwideevent focused onreverse logistics!Activities actuallybegan on Sundaywith the privateRLA FootballParty. Guestsenjoyed revelry,rivalry, great food and a greatgame. Over the next three days,OEMs, Retailers, 3PLs and 3PSPshad the opportunity to discuss RLissues, share ideas and leveragebest practices. Monday provideda variety of activities:• RL workshops on topics suchas Progressive Dispositioning“I want to draw yourattention to theextremely professionaland committed mannerof the RLA staff. We wereextremely impressed bytheir diligence in getting usin front of most of the VIPswe had targeted. That wasnot an easy task, given thelarge number of exhibitorsand attendees. The keyto success in service iskeeping promises. You notonly kept them, but exceedour expectations. The showwas excellent and we lookforward to exhibiting nextyear.”Jonathan Pine, President,Renova Technology --Exhibitor LV 2008Process, Service PartsManagement Strategiesand Using RL to EnhanceCustomer Service andCompetitive Performance• Industry Focus Committeemeetings• Opening of the28 March/April 2008 • Reverse Logistics MagazineExhibit Hall• RLA CharityGolf TournamentTuesday beganwith a WelcomeAddress byRLA PresidentGailen Vickand includedpresentationof a check toDelph Doyle,DonationDirector ofGifts in Kindfrom proceedsof theCharity GolfTournament.MickyLong of theAberdeenGroup nextprovided anIndustry Overview and look atRL Trends. The Keynote Addresswas presented by Joe Warren,Vice President and GeneralManager, Customer SupportOperations, Canon USA.Reverse Logistics statistics fromJoe’s presentation include:• Accounts for Nearly 1% ofDelph Doyle of Gifts in Kind receives donationcheck from RLA President Gailen Vick.Micky Long ofAberdeen Group.Jeremy Vick andteam shovt thelowest score.Joe Warren of Canondelivers the KeynoteAddress.RL Best Practices in Recycling Discussion Panel.www.RLmagazine.comAnnmarie Hoher ofCanon and Joe Baldinoof Teleplan were twoof many Lucky Drawwinners.“I just want to thank you and yourorganization for the excellent wayin which your conference wasorganized and for the quality ofthe speakers, and their respectivepresentations. I feel I have learneda lot and will be able to tacklesome of the reverse logistics issuesin my company with a lot moreknowledge and experience behindme in the future.William Jaworski, Traffic Manager-Canada, Thomas & Betts Ltd. --Attendee LV 2008TotalUS GDP(Aberdeen Group, 2007)Costs US Manufacturers & Retailers•$100 Billion Annually• (Forbes, May 2007)• Can Improve Profitability 3.8%(Industry Week, May 2007)• Represents 3% - 4% of a Company’sTotal Logistics Costs (Minihan,1998)Five tracks of sessions and paneldiscussions filled the afternoon andfocused on industry-specific issuessuch as Service Parts, Warranties,Retail Returns, Outsourcing, OnlineMarketplace Solutions and Going“Green.” The Expo Hall was alsoopen where manufacturers and retailerswould find many solutions for their RLneeds among the over 85 exhibitorsparticipating. The day ended witha spectacular reception hosted byFlextronics. Food, entertainment andwww.RLmagazine.comThe Wednesday Keynotewas presented by BernieSchaeffer of Motorola.RLA CONFERENCE & EXPO LAS VEGAS 2008-02-11Gailen introduces andthanks Paul Bruce ofFlextronics.networking were the order ofbusiness.The Wednesday morning KeynoteAddress was provided by BernieSchaeffer, Corporate Vice President,Global Repair & Reverse LogisticsIntegrated Supply Chain, Motorola.Bernie talked about … Additionalsessions and panel discussions filledOne Less Thing to Worry Aboutthe remainder of the day right up to theclosing remarks by Gailen Vick andthe Lucky Draw. Prizes for best use ofthe VIP program were awarded to …and best booth awards (as determinedby BOA members for those bestrepresenting… went to … We do Business the Simple Way Li Tong GroupHong Kong The Expo provides OEMs, ODMsand Retailers the opportunity toexplore available service offeringsof 3PSPs. Global Corporate - Hong Kong Tel: +852-2690-9976E-mail: carlos.booker@litong.com.hk Reverse Logistics Magazine 1@verizon.net• March/April 2008 29

RLA CONFERENCE & EXPO LAS VEGAS 2008-02-11Are you gettingRLA CONFERENCE & EXPOGailen Vick - President & CEO,Reverse Logistics Trends, Inc.Scott Nathaus - NationalTransportation Manager,BCBGMAXAZRIA GroupL. Bryant Underwood - DirectorNA Service, FoxconnHAMMEREDWilliam P. Angrick - Chairman &CEO, Liquidity Services, Inc.Tim Konrad - President ofReverse Logistics, GENCOKelly Davidson - Director,Service Operations, KyoceraMark Rolfes - VP Sales, PelicanDale Rogers Ph.D., - Directorof the Center for LogisticsManagement, University ofNevadaPaul T. Adamson - Director ofBusiness Development, Round2Technologies, Inc.Scott Huddle - Director RL Operations, AT&TMobilityRussell (Rusty) W. Langford - VicePresident of CRM Solutions,Harte-HanksThomas M. Coughlin - PresidentCoughlin AssociatesBernie Schaeffer - CorporateVice President, Global Repair& Reverse Logistics, IntegratedSupply Chain, Motorola, Inc.Micky Long - Research Director,AberdeenBita Salimian - VP - CEO, VASMarc Bloiun - SVP DHL Solution,DHLGary Gear - Vice PresidentOperations, Toshiba AmericaInformation SystemsEmily Rodriguez -Consultant,The Results GroupMike Shelor - President, ShelorConsulting Inc.Joseph Warren - VP and GeneralManager, Customer SupportOperations, Canon USA, Inc.John Slothower -Manager,Innovations, Best BuyDon Collier - Sr ManagerBusiness Development,FlextronicsGina Chiarella - Chief OperatingOfficer, WeRecycle!Pam Rapp - Strategy Manager,Walmart Stores, Inc.Christopher F. Fabian -Professional Service Solutions,LLCRobert Ticknor - VP BusinessDevelopment, AmdocsWilliam “Bill” J. Boyer - AssistantVice President of U.S./ MexicoTransportation Sales, NYKLogistics AmericasMark Servidio - VP Logistics &Environmental Supply ChainPlanning, Sharp Electronics CorpJohn Rinehart - Manager RLInformation Services, IntelCorporationThomas St. John - President,AMCORSuresh Sundarababu - BusinessStrategy Manager, Dell, Inc.by the lack of aReverse LogisticsSolution for yourhi - tech product?Ed Inal - Sr. Director of ServiceOperations, Western DigitalPanelist, Data StorageDr.ir. Harold Krikke - AssociateProfessor of (Reverse) Logistics,Tilburg UniversityTim Neale - Process ControlManager, Walmart Stores, Inc.Jeff Zeigler - Founder, Chairmanand CEO, TechTurnJack Debutts - Strategic PlanningManager, Dell,Jeremy Murchland - Head ofCustomer Service, Sony EricssonMobile Communications (USA)Alan Clarke - SrManager Service Operations,Kyocera, PanelistAshley Kerman - Director ClientServices, CLS Supply ChainServicesSteve Blaz - Vice President, GlobalService Operations, JuniperNetworksDan Barrett- Manager of BusinessDevelopment, United StatesPostal ServiceDick Kluis - Vice President,Product Management - ServiceNetwork Solutions, ClickCommerceChad Lockhart - ManagerServices SCM, NCRPaul Bruce - VP Global Services FLEXTRONICSMatt Domachowski - DirectorSystems Business Development,GENCO• Repair• Rework• Recycle• Refurbish• Parts harvesting• WarehousingLarry Maye - Senior DirectorRL Global Repair & Logistics,Palm, Inc.Jennifer Bogle - Sr. Manager,Service Operations, KyoceraKevin Steele - Vice President, TheResults GroupJason Berger - Head of ReverseLogistics, Sony EricssonDavid Craig - Manager ReverseLogistics, CanonRenee St. Denis - DirectorAmericas Product Take Back,Hewlett-Packard CompanyTom Johnson - Manager, ReverseLogistics Systems, Cisco SystemsRandy Weiss - President, Round2TechnologyPaul Snyder - Reverse LogisticsProgram Manager, MicrosoftMichael Blumberg - President,Blumberg Advisory GroupJesse Larose - Recycling & WasteManagement, The Home DepotErmias Hailu - Strategic Sourcing,The Home Depotwww@MontechInc.com978-454-6666John Mehrmann - RegionalDirector, DEX (Data ExchangeCorporation)Dave Ryan - Senior Vice President,IntechraScott Huddle - Director RLOperations AT&T Mobility30 March/April 2008 • Reverse Logistics Magazinewww.RLmagazine.comwww.RLmagazine.comReverse Logistics Magazine • March/April 2008 31

RLA CONFERENCE & EXPO LAS VEGAS 2008-02-11Kristin Secreto - Vice President,Client Services, SIRAS.comRaul Castilla - OperationsManager, Wal-Mart Stores, Inc.Doyle Delph - Director, DonorInvolvement & CRM, Gifts inKindFRS is Service.RLA CONFERENCE & EXPO LAS VEGAS 2008-02-11Sanjeev Kakar - Director, RTOutsourcing Services LimitedShawn Stockman - BusinessDevelopment, ONEPAKPatty Hale - Manager EmergingProducts, FedEx CorporationTim Neale - Process ControlManager, Walmart Stores, Inc.Jay Woodley - Vice President,Intechra LogisticsScott Huddle - Director RLOperations, at&tRon Tibben-Lembke, Ph.D. -Associate Professor of SupplyChain Management, Universityof NevadaChristina Loh - DirectorEnterprise Support, Palm, Inc.Richard Perry - BusinessDevelopment Manager, EndiciaBill Frischling - Chief OperatingOfficer, DyscernHoward Rosenberg - Director,Trading Platforms, eBay, Inc.Alan Clarke - Sr. Manager ServiceOperations, KyoceraArt Teshima - Vice President,Business Development, Sales &Marketing, Bell IndustriesKaren Key - Manager ExpeditedProducts, United States PostalServiceMauricio Salinas - WW ReverseLogistics Program Manager, CiscoSystemsProblem.Action.Solution.Peter Carfrae - VP Sales/Supply,GENCO MarketplaceKelvin Toulmin - Sr. GlobalDistribution Director,BCBGMAXAZRIA GroupMichael Livatino - SeniorDirector, Liquidity Services, Inc.Warren Sumner - VicePresident Marketing & Products,ClearOrbitWilliam K. Pollock - President,Strategies For GrowthGavin Hartland - VP Marketing &Alliances, The Service BusinessRay Martin - Director SolutionsManagement, Click CommerceChris Hubred - Supply ChainStrategy Manager, Best BuyMaridee Maraz - National SalesManager, SirasIndividual Service ConceptsCustomized Warranty ManagementRepair and Logistic ServicesCarry in ServiceOn site ServiceRework/Engineering ChangesAssemblyE-ServicesValue added logisticsHelpdesk and Hotline supportSpare Parts ManagementBacTracsSoftware for Reverse LogisticsJay Frayser - .com ReturnsManager, Walmart Stores, Inc.Jay Frayser - .com ReturnsManager, Walmart Stores, Inc.Tom Marcellino - Senior Vice-President, Sales & Client Services,CLSCharles Johnston - SeniorDirector,Wal-Mart Stores, Inc.Mike Moore - RegionalDirector, DEX (Data ExchangeCorporation)32 March/April 2008 • Reverse Logistics MagazineRichard Starr - ManagerLiquidation, Circuit City StoresCraig Sultan - Sr ManagerReverse Logisticswww.RLmagazine.comFRS Europe BV,Amsterdam, The Netherlands.www.frs-europe.nlWe give our customersthe care they needwww.RLmagazine.comndlorAndlor Logistics Systems Inc.Reverse Logistics Magazine • March/April 2008 33

Integrating ReverseLogistics with WirelessTechnologyby Joe Caston, CEO & President of Cadre TechnologiesIn today’s competitive marketplace, it’s not enough tosimply offer reverse logistics as a value-add to alreadyexistingwarehouse services. In fact, one of the mostsignificant mistakes a company can make with regardsto reverse logistics is to consider the process only as anafterthought, or assume that if the right components are inplace, the desired result will “magically” happen. Nothingcould be farther from the truth, but a balanced relationshipbetween technology and forethought can propel anycompany offering reverse logistics to the top of its industry.One of the best ways to streamline any reverse logisticsoperation is by employing wireless technology. Radiofrequency identification technology (RF) is the latest andmost advanced wireless application, particularly whenit’s used in conjunction with a sophisticated warehousemanagement system (WMS). The initial investment inwireless technology, along with any necessary upgradesto your company’s WMS, will pay off quickly in thecompetitive advantage these features provide. After all,who would you rather hire: a vendor who has the foresightto take your company to the next level, or one that is barelykeeping up with the latest technology?There are several benefits of investing in wirelesstechnology to employ reverse logistics. First, costefficiency. Think of the man-hours currently beingused to hand-inspect each item that comes back to yourwarehouse. That time and energy translates into dollarsthat could be better used in other parts of your company’soperational system, or eliminated altogether to cutdown on the bottom line. Second, by utilizing wirelesstechnology, human error is taken out of the equation.The returned item will more likely be sent to the correctdepartment or division, eliminating the backtracking thatcould result from misplaced merchandise. Again, thissaves money and manpower. Third, wireless transactionsleave a complete paper trail that can be necessary foraudits and for administering credits to customers. Andlastly, but just as importantly, telling potential customersthat your warehouse uses wireless technology is an34 March/April 2008 • Reverse Logistics Magazine www.RLmagazine.comimpressive statement. Not only willnew business prospects know thatyour company will be a partner inensuring its efficiency with reverselogistics, but they will also understandyour commitment to exploring andinvesting in advanced technologies.That’s a competitive edge that speakslouder than any sales pitch.Once the decision is made to join thewireless technology wave, there area few features your company shouldlook for. As mentioned earlier, RFis an invaluable tool in maximizingefficiency and reducing warehouseerrors. Beyond bar-code scanners,advanced warehouse managementsystems integrate voice-directed RFas part of the solution. The advantagesof voice-directed technology aretremendous. First, the technologyallows for hands-free communicationwith the system, allowing the workerwww.RLmagazine.comto focus entirely on his or her task.Also, working hands-free improvessafety by eliminating the jugglingact that happens when an employeeis carrying around a receiver orpaperwork and begins handlingmerchandise. In addition, the learningcurve involving voice-operatedtechnology has been shown to beshorter; for most people, it’s a moreintuitive method of communication.Beyond voice-directed RF, inventoryvisibility is another feature you’ll wantto look for. Depending on the type ofreverse logistics being managed atyour warehouse, your business mayneed total inventory visibility, fromthe moment the product arrives at thewarehouse until a decision is madeas to whether it will be refurbished,resold or disposed of. Merchandisetypically spends much more timeContinuesWarehouse workers use aheadset with a microphoneand a speaker connectedto a holster-supportedmobile computer on theirbelt. The benefit is that theworker’s hands and eyesare completely focusedon performing the desiredtask, not on typing ortransmitting information.Workers connect in realtimeto the company’s maindatabase, and can verballycommunicate with the hostapplication to confirm whena return has been processedand receive anotherassignment. In addition,they can switch betweenmethods to use the headset,a keyboard or scanner.Reverse Logistics Magazine • March/April 2008 35

One of the best ways to streamline any reverse logisticsoperation is by employing wireless technology. Radiofrequency identification technology (RF) is the latest andmost advanced wireless application, particularly whenit’s used in conjunction with a sophisticated warehousemanagement system (WMS).in the warehouse once it’s returnedthan it does before it leaves thedistribution facility, so for cost andspace reasons, it is essential that yourcompany’s tracking system be up-todateto eliminate any delays in findingmerchandise once it arrives at yourwarehouse.In addition to standard merchandisereturns, a major stressor on areverse logistics system is in thecase of a product recall. Recallsmake headlines, but what’s rarelyconsidered are the logistics behindrouting thousands or millions of unitsof a product from around the countryto one location. And once theyarrive at that location, they must becatalogued and addressed. Efficiency,organization and technology mustall come together quickly whenconsumer safety is in question. Once acompany has decided to issue a recall, technology takes over.Advanced warehousingsystems that haveinvested in wirelesstechnology have theedge when time is of theessence.More and morecompanies realize itis imperative to havea handle on the latest technology tomanage their oftentimes complexreverse logistics process. Dealingwith returns and recalls after thefact is a surefire method to getbehind the curve. Smart warehouseproviders take advantage of advancedwireless tools like bar code scanningand voice-directed RF to managelogistics and inventory control. Theright combination of technologyand planning will improve thebottom line and guaranteea streamlined approach toreverse logistics. RLMAbout Joe Caston and CadreTechnologiesChief Executive Officer andPresident Joe Caston is anexecutive leader with 22years of experience in salesmanagement, finance andgeneral management in thedata networking, softwareand telecommunicationsindustries. CadreTechnologies is the leadingprovider of supply-chainmanagement software forthe warehouse, fulfillment,logistics and manufacturingindustries. Cadre’s softwarepackages offer versatile, ondemand,real-time informationthat streamlines the fulfillmentoperation, making the processmore flexible, productiveand profitable. For moreinformation, visit Cadre’s Website at www.cadretech.com orcall 866-252-2373.Packaging: Is Itthe Missing Linkin Your LogisticsChain?by Diane GibsonIt is true that almost anyone can package an itemusing a cardboard box, some bubble wrap, anda roll of tape, but is that enough when items areheavy, valuable, oversized and awkward. Theright packaging is often hit-or-miss or even nonexistentin a company’s supply chain, escalatingthe chances of damage, security breeches, lostprivacy and theft opportunities. With a few tipsand the right logistics partner, packaging shouldno longer be the missing link when your leasesexpire, equipment breaks down or your datacenter consolidates.Product and Transportation AnalysisPackaging concerns are not exclusive to anyparticular company. Every business has leases,returns, exchanges and end-of-life assets to dealwith. When selecting a logistics provider, askfor an on-site product and transportation analysisthat includes the handling, distribution, modeof transportation and origin and destinationfactors needed to develop product specificengineered packaging. Product characteristicsrequiring review include size, weight and weightdistribution, susceptibility to abrasion andcorrosions, effects of compression, vibrations andfragility.With a completed analysis in hand, a companyhas greater flexibility to make the right costeffectivepackaging choice whether it is a customwooden crate or a standard size cardboard box.Take the example of a large multi-location callcenter company. On any given day the companymay need to move 50 high-value computersover 2,300 miles of bumpy highways to anothercenter, while sending 50 other computers to thescrap heap 30 miles away. By understanding36 March/April 2008 • Reverse Logistics Magazine www.RLmagazine.comwww.RLmagazine.com Reverse Logistics Magazine • March/April 2008 37

the type of product that is going tobe shipped, where it is going andwhy it is being moved, gives thecall center the flexibility to makedifferent packaging choices anddispels the idea that one packagesolution fits all.Custom Packaging versus One-Size-Fits-AllProtective packaging solutions,including custom engineeredcontainers, cushioning,waterproofing and support thatmeet specific product fragility andshipping requirements, can ensuresafe travel to the final destination.Companies often fail to fullyanticipate the impact of shock andvibration or how far a packagecan be dropped, leading to a highprobability of damage.By properly accounting for the size,footprint, weight, and sensitivity ofthe item being shipped, the correctfoam densities and other packingmaterials can be selected. If thereare a number of packages beingshipped as a unit, skids and palletsshould be considered as platformsto handle and transport the itemssafely.Reusable containers are sometimesa good option if a company shipsa lot of the same size and kind ofassets frequently. These containerscan be refurbished and repaired tocurb costs and are environmentallyfriendly. Although, fractionallymore expensive on the front-end,the ability to re-use the samecontainer saves money in the longrun.StandardsEven though custom packagingoptions are available, it is importantto know packaging standards existwhen needed. What standards areused might depend on the security,size or value of the shipment.Logistics providers should be ableto explain what standards andpractices they follow for packaging.For instance, vapor barriersare essential for crates beingtransported internationally.Packages being shipped offshoreare subject to the InternationalStandards for PhytosanitaryMeasures No. 15 (ISPM-15). Thisrequires that all solid wood packingmaterial be heat-treated andstamped with an official mark.Documentation, Security and theChain of CustodySeveral options are available toensure proper tracking and securitycontrol of a shipment. Packagesshould be clearly labeled withinformation that is important andmeaningful, including purchaseorder or serial numbers. Thissame information should appearon packing lists so that packagescan be checked-off at theirorigin, destination, and points inbetween to minimize theft andlosses. Always ask about real-timetracking options.Package bar codes create greaterhandling efficiency and accuracy.They are especially effective forlarge logistic projects. One resellerrecently returned 1,200 cratedservers to its 100,000-square-footwarehouse. If it were not forlabeling and bar coding, crateswould have to be opened to checkthe contents, as well as determinetheir origination or destinationpoint.Package security can be customizeddepending on the level of securityrequired. Sometimes packages canonly be sealed or opened withinview of witnesses or sealed withtapes that will show if they havebeen opened or tampered. Driverscan be denied access to lockedtrailers while in route and trackingsystems can set off alarms if a truckstops for more than 20 minutes.Chain-of-custody is always animportant packing question.Some Internet providers haveno consistent chain of controlover packaging. This can leadto security breakdowns. Wheninitiating a logistics project, askthe provider what they handledin-house, what assurances andinsurance are available, and wherethey are “really” located. Packagingpartners with actual “brick and mortar”locations, instead of virtual sites,can provide true shipping chain-ofcustody.Hire Experience or Do-it-YourselfTrust is built on experience. Whenseeking a logistics provider, look fora history of shipping “like” assets.For instance, a finance companymay need assurance safeguardingproprietary information such associal security numbers, whilean electronics manufacturer mayrequire antistatic packaging options.Each client and their industry havetheir own packaging and cratingneeds. Packaging solutions musttake into account that hospitalsProtective packaging solutions that meet specificproduct fragility and shipping requirements, canensure safe travel to the final destination.have potential biohazards whilethe aerospace industry works withhazmat. Remember to inquire abouta provider’s international skillswhenever offshore packaging isinvolved.If a company decides to do thepackaging themselves, the big questionto ask is what are the potential lossesand gains in terms of costs, securityand safety? Should the company’shighly trained technicians be used topackage equipment? Is a package justa box and cushioning or is it more thanthat? Does one size really fit all?Safe and secure. Damage-free. Ontime.Cost-savings. These are all theresults of proper packaging. By askingthe right questions when puttingtogether a logistics plan, companiescan transform packaging from themissing to the strongest link in theirsupply chains. RLMDiane Gibson isthe President andFounder of Craters &Freighters. Craters &Freighters, founded in1990, is headquarteredin Golden, Coloradoand is the national leader in specialtyfreight solutions, providing expertpackaging, crating and shippingservices from locations nationwide.The company expanded nationallythrough franchising beginning in 1991.For more information, visitwww.CratersandFreighters.com.38 March/April 2008 • Reverse Logistics Magazinewww.RLmagazine.com www.RLmagazine.comReverse Logistics Magazine • March/April 2008 39

Technical TrendsL. B. UnderwoodTestEquipment;Product orFeature?Bryant UnderwoodOver the Christmas Holiday, itwas amazing to see the growththat cell phone products experiencedas what could be called the gift ofchoice, in 2007. There are countlessstories in the media tracking thismarket shift. Essentially, if you werein the 3rd Grade or higher, you wanteda new cell phone “under the tree.”At least you did if it had all the rightfeatures… It is that word features thatI want to focus on. I can think of noproduct in history that has devouredso many other product segments andtransformed them into “features.”Consider the list below. All of theseitems were once ONLY stand-aloneproducts.• Text Pager• 2-Way Pager• Voice Mail/Voice recorders• Calculator• Pay Phone• PDA/Calendar/Organizer• Email Client• Camera (still and video)• Web Browser• Fax Client• Access Point• GPS/Navigator• MP3/Media Player• Bar-code Scanner• Child/Employee Tracker• Game ConsoleFor many of these products, beingincorporated as various features intoa cell phone, generated very negativemarket impacts to the existing productlines. Many were able to changetheir lineup and capabilities and stillremain stand-alones. Others havenot. Regardless—the pressure anddisruptive affect from becoming a“cell phone feature” is undeniable.What Could Be Next?I want to make the case that one ofthe next product lines I want to seebecome a cell phone feature is the testequipment needed for its own repairand diagnostics. Yes, I heard whatyou just said. I heard that incredulousthought, “What are you thinking!!!”OK making test equipment a featureon a phone is crazy, right? Maybe,maybe not. First let me tell youwhy you want to do this. For RL,the single biggest product segmentthat gets repaired is cell phones. Onaverage the cost per repair for the testequipment in a repair depot is $0.80-$1.10 per phone. That cost is muchgreater in other markets, like Asia,where there are often suites of testequipment used in retail locations totest and screen the simpler repairs.In these retail service locations, theequipment costs can reach $3-5 perrepair, due to equipment cost andlower utilization rates. This is a hugeper-repair cost for RL service thatreally needs to be addressed.Let me walk you through my thinkingon how this can work. Back in “theday” when cell phones operated onthe AMPS standard, a great deal aboutthe function and the air interfacewas analog. Anything that needs toevaluate analog signals tends to bevery complex. Plus the processingpower in the phones at that timewas very limited. Just the circuitryrequired for communication with thenetwork would often be located instate-machines that were etched insilicone because the micro-controllerswere just too slow or too powerhungry to support the system and theUI.How is it different today? First,everything is digital. Themeasurement of digital signals ismuch easier than the ‘shades ofgray’ complexity of analog signalmeasurement. This is becauseso much of the work in decodinginformation from the digital (CDMA/GSM/LTE/Etc…) data stream is basedon statistical calculations. So all wereally need to assess digital signals,is something to do the math for us.And, you guessed it—we have hugeprocessing power in the phones today.The speed is so fast that no longerdo we need a lot of complex siliconto manage the air interface. For anumber of simple phones, the airinterfacecontrol is a little more than achunk of code that is a shared load onthe processor along with the UI. So,we clearly have the processing power,so how would this work?What Can Be Done TodayThere are three players in wireless thatare making technology moves in cellphone/wireless that will undoubtedlylead to a significant level of testcapability residing in the phones;Nokia, Qualcomm and Google are ofspecial note. Let me outline why I saythis.For Nokia they are acting on astrategy that ties the user experienceof Nokia product to the functionalityof the phone and the size of the datapipe. For that plan to work, Nokiarecognized they needed to expandthe range of applications that ran onphones. There are two recent appsthat will give us some insight as tojust how close we may be with servicefunctionality existing as a feature.The first is the new NokiaDeviceStatus Tool . With thisapplication working in a Nokiacell phone, there are a whole set ofparameters that are gathered fromthe phone and a connected PC. Ifsomething goes wrong, this toolassesses the general health of yourPC and generates summary datato facilitate communication withCustomer Care for resolution. Inthe future, the notes on the Nokiaweb site advise that new versionscould have capability to connectdirectly with Nokia for virtualdiagnostics and Care Support.How powerful would it be for arepair center to have a complaintcode that was meaningful becauseit was gathered from CustomerCare and function testing in thephone?Another application that I amreally excited about is the NokiaEnergy Profiler Tool . Thistool was intended to provideprogrammers with an easy wayto optimize SW functions to usethe least power possible from thecell phone’s battery. But the realpower of this tool is in its possibleuse in repair troubleshooting. Tounderstand how this could be usedas a troubleshooting tool, considerthe power up process for almostall modern electronics. When youpress the power button, there isan interrupt that starts a sequenceof steps. During these steps, eachsection of the phone is enabled in achained process. If you measure thecurrent consumed during this ‘wakeup’ process, you can identify a failedsub-section. To make this process alittle easier to visualize, refer to thediagram below.In this chart you will see fourlandmarks identified at (A, B, C andD). Each of these landmarks representsa point where one of a cell phone’selectronic subsections is turned on;A = Reference OscillatorB = Power AmplifierC = LCD Initial powerD = End of LCD Power upThe yellow line represents aproperly functioning phone’s currentconsumption over time during a‘wake-up’ sequence. The pink linerepresents the current consumed for aunit under test. From this graph it iseasy to see that landmark B is wherethe problem is and that the poweramplifier subsection is the place tolook for trouble. This informationcombined with a complaint from theCustomer of ‘dropped-calls’ makes theinitial diagnosis a slam dunk.Then there is Qualcomm’sMobileView Technology . Released40 March/April 2008 • Reverse Logistics Magazinewww.RLmagazine.comwww.RLmagazine.comReverse Logistics Magazine • March/April 2008 4180maA160msBCD

in December of 2007, this productallows engineers to monitor andoptimize wireless networks based ondiagnostic data gathered from variouscell phone handsets working on theWireless Carrier’s Network. Theperformance data that is combinedwith GPS information from the cellphone, is used to benchmark andtune wireless networks. Clearly verycool, but how does this help repair?What if the network was alreadybenchmarked and its performance wasdefined? The data gathered from thephones would then be an indication ofthe phone’s performance rather thanthe network’s. Also since the systemgathers GPS data, cell phones that arenear each other can be polled and thatdata used to verify a poor performingunit as the source of the problemrather than the network. Considerthe power and positive impact onCustomer Satisfaction if a WirelessCarrier could respond right now to aCustomer’s concern with their phone’sperformance by connecting directlyto the phone and measuring variousparameters and then validating the datato be in-line with other nearby phones.As an added benefit the WirelessCarrier could run periodic off-linediagnostics on the handsets and emailthe Customer the results—talk aboutGreat Customer Experience!Then there is Google. SinceDecember, I have been drivingeveryone around me crazy with mydelight over the new beta version ofGoogle Maps with the “My Location”feature. With this free tool in yourphone, even without GPS, GoogleMaps will locate you. How? Googleretrieves the data from what cell siteis being used and combines this withRSSI information to establish a circledesignating your probable location.From a repair point of view, this is alayer of functionality that could beleveraged for diagnostics. Rather thanjust get RSSI, why not query the towerfor Rho, FER, Freq Offset, etc… WithGoogle launching its wireless servicebased on the very open Androidplatform they are leveraging a hugecadre of very talented programmers todevelop the next ‘killer-app’. To provethey are serious, Google is offering$10M in prize money to promote thedevelopment. With this kind of openaccess and developer focus its just amatter of time until embedded testingtools make it to the forefront. Arethese all the pieces that we need toget this idea going? Well, there are acouple of other challenges, but theyare solvable.Some Barriers need to be BridgedThe start, that the tools noted aboveprovides, is fantastic and we can seesome solid progress is forthcoming.However, for this to be a reality, thereare several issues to bridge before ALLaspects of self-test as a feature can bedeployed. I want to keep away fromgoing into too much detail on some ofthe very technical aspects of this. ButI will cover one barrier as an exampleand give you a sense of how thesegaps can be closed. Power control isone of the more important metrics tomeasure for all digital networks. Thisis because, so much of the density ofthe data rates and loading, dependsgreatly on keeping transmitted poweras low as possible. So how coulda mobile phone measure its owntransmit power? Simple, get a coupleof values, perform some calculationsand generate the result. The externaldata needed would be requested by thephone from the connected tower. Anoversimplified explanation would usetwo data points:1: What is my location (used tocalculate path loss)?2: What is the measured signal levelthe tower is receiving from this phone?The phone then internally measuresthe current from its power amplifier.Now we know:• Path loss in db• Current consumption• The tower and phone RSSI levels• Plus some more rarified data toindicate multi-path fading, etc…We can then crunch those numberstogether with a little math and Voilayou have the average transmit power.Anyway, you get the idea. There isa huge piece of RL supply chain costthat can be greatly reduced if notoutright eliminated. The first benefitsof this will be seen in the variousmarkets worldwide that use someform of retail service to at least screenrepairs from the end user. Otherbenefits will be the better level ofcomplaint/failure data for the repairdepots to use during repair and thenthe depots themselves may begin usingthe internal test functionality, outright.What will be the response of currenttest equipment manufactures? Myguess is that just as Google firstdefined their wireless product witha SW stack and a developer kit, thetest equipment vendors will likelydo the same. Most of the equipmentvendors also build or partner in someway in the manufacturing of cell-sites.Why not augment the function of thecell-site with functions protected byintellectual property rights that canbe called by the phones? The testequipment manufacturers can thenlicense the use of the functionality.Lower costs are still passed on and theoverall industry continues to benefit.This is truly an amazing time fordisruptive change.1. www.nokia.com/betalabs/devicestatus2. www.forum.nokia.com/main/resources/development_process/power_management/nokia_energy_profiler/3. www.qualcomm.com/press/releases/2007/071206_Qualcomm_Announces_Availability_of_MobileView.htmlL. Bryant Underwoodis Director, NorthAmericas Service atFoxconn TechnologyGroup. Bryant’s pastpositions include GM,Director and VP levelassignments in supportof Operations, CRM,Materials and IT.ElectronicsRecyclingPaperRecyclingPlasticsRecycling42 March/April 2008 • Reverse Logistics Magazine www.RLmagazine.comwww.RLmagazine.comReverse Logistics Magazine • March/April 2008 43

Recalls—When the Worst Happens, Part IIIndustry EventsIf not handled properly, recallscan be extremely detrimental toboth external and internal brandperception. In the January/February 2008 issue of RLMagazine, the first article in thistwo-part series covered recallprevention and preparedness, aswell as customer impact. Thisissue’s article outlinesoperationalresponse options,communicationstrategies, longtermbrandimpact, and thecosts associatedwith variousrecall options.by Hannah Kain and Gailen VickLong-Term Impact on BrandRecalls have always hada negative effect onbrand equity. However, asviral marketing—and onlinecommunities—are taking on a lifeof their own, the brand can sufferirreparable damage within justweeks or even days. Even falseaccusations can have that effect,as Wendy’s can attest to afterhaving to fight the incident where acustomer put a severed finger intoa bowl of food, an incident thatimpacted the company for years.Customer dissatisfaction at avery basic level “only” involves atransaction between a company anda person and/or another company.We are not making light of thatrelationship. Current customersare the lifeblood of any company- and the most likely to buy again.However, the long-term brandinvolves more than the specificsum of the customer transactionsand perceptions during the recall.Damage to the brand can make itunlikely that anybody ever will buythat brand. Perceptions can changeovernight as talk-show hosts usethe brand name in their jokes.The only way to protect thebrand during a recall is to reactquickly, considerately, honestly,transparently, and withintegrity.Operational Impact andCostThe table (Pae 52) illustratesdifferent customer-relatedactions that can be taken aspart of a recall, as well asthe expected impact and thecost. Both will vary depending onproduct and the overall scenario.Recall committees would do wellto consider a cost/benefit analysis.The proverbial pound-wise/ pennyfoolishdiscussion comes to mind.A recall can easily cost $50 - $500per unit shipped, of which maybe5% - 20% (or $10-$25) can beattributed to the actual interactionwith the customer, such as callcenter interaction, operationaltransactions when receiving theold unit or shipping the new unit,and freight. A 10% savings in thisarea may have very little impacton the overall cost of the recall,but may have a huge impact on theimage of the company, customersatisfaction, and the long-termconsequences.Costs—the Entire PictureWhile transaction-based costs areobvious there are several expensesthat are less obvious:Managing the recall.The recall must be managedby very competent staff withfull authority, full access to theresources needed and knowledgeabout product, supply chain,customers, sales channels, etc.This makes for a very expensive,highly-paid committee.Compliance management.The cost depends on whether therecall is voluntary, whether a FastTrack option is available, andwhich agency the company isinterfacing with. In addition,public companies have reportingrequirements with shareholdershaving a legitimate interest ininformation.Corrective action.As the legal, communications, andpractical aspects of the recall getThe Reverse Logistics Associationstaff takes advantage of everyopportunity to evangelize thereverse logistics message, thusraising awareness of the processand increasing visibility for ourassociation and its members.If you would like to have RLApresent at an event or if youhave an event you would like topublicize in RL Magazine, pleasesend an email toeditor@RLmagazine.com.Upcoming EventsRLA Seminar - Hong KongRecycling, Reuse & GovernmentalRegulatory ControlsApril 16, 2008www.rltshows.com/hkg08_event.phpWCBF’s 4th Annual Lean SixSigma Summit – Chicago, ILApril 29-May 2, 2008www.chemweb.com/content/event_items/wcbf-s-4th-annual-lean-sixsigma-summitIntroduction to RFID – Erie, PAApril 30, 2008www.logisticsonline.com/content/eventscalendar/Search/paid_event_description_new.asp?nEventId=27917RLA Seminar - ChicagoImplementation of RL SoftwareSolutions to Enhance BottomlineMAY 7, 2008www.rltshows.com/chi08_event.phpWERC Annual Conference –ChicagoMay 4-7, 2008www.werc.orgInvestment Recovery Association –Houston, TXSPRING ‘08 SEMINAR &TRADESHOWMay 19-21, 2008Green West – Los AngelesMay 20-22, 2008www.greenwestexpo.comRLA Conference & ExpoAmsterdamDorint Hotel Amsterdam AirportWorkshops: June 16, 2008Conference & Expo: June 17-18,2008www.rltshows.com/amsterdam.phpElectronics Recycling Conference& Trade Show - ChicagoJune 22-24, 2008plasticsrecyclingconference.comRLA Seminar - TorontoRetail Reverse Logistics Issues,Spare Parts ManagementJULY 9, 2008www.rltshows.com/tor08_event.phpComtekComputerSystemsWorld-Class Technical andSupply Chain Solutions• Depot Repair• Parts Build / Assembly• Reverse Logistics• Supply Chain• IT / B2B Solutionswww.comtekcomsys.comAnna Chan, Sales Executive(916) 859-7000 ext. 1162anna.chan@comtekcomsys.comCorporate Headquarters:2751 Mercantile Drive, Suite 100Rancho Cordova, CA 9574244 March/ www.RLmagazine.comwww.RLmagazine.comReverse Logistics Magazine • March/April 2008 45

planned, it is time for learning andcorrecting. It is important to start theprocess early so relevant informationcan be collected as defective or nondefectiveunits are returned. Statisticalanalysis should be performed andcommunicated throughout thecompany.Suppliers. If the recall is causedby problems in the supply chain, acomplete analysis of the supply chainmay be necessary. As supply chainsget exceedingly complex, this may bevery time consuming and costly.Opportunity cost.As senior staff focus on the recall,other issues may be unattended to.However, just as important is thesales force. To avoid a demoralizedsales force, the recall committeemust communicate fast, clearly,and honestly with the sales force,providing specifics about what thecompany is doing, and how thecompany intends to move forward.Communications management.The company should perform acomplete stakeholder analysis toreview that it has communicatedappropriately with each stakeholder.This could include vendors who mightbe concerned about the company’scash flow or survival, serviceproviders who may have to providechanged services during the recallperiod, public service announcements,employee communications, nonaffectedcustomers, as well as thegeneral public.Repositioning the brand.On the marketing side, seriousconsideration must be given tothe brand to ensure its survival orcomeback.Potential Litigation CostsIn addition to the cost of managingthe recall, companies are faced withrisk of litigation, either in the formof individual lawsuits or class actionCatastrophic Failure and Recallslawsuits. Risk mitigation becomes alegal issue, which also includes theissue of whether a jury would see thecompany as “doing the right thing.”Litigation costs can surmount the othercosts and can ultimately be detrimentalto the company’s survival. Certainly,any litigation involves distraction fromthe company’s business. In addition,punitive and other damages can besubstantial.The costs spent on mitigating customerissues and taking action fast caneasily be recovered in minimized riskof lawsuits—or minimized risk ofpunitive damages.Legal advisors should be on the recallteam and readily available.A Final Word about ManagingYour RecallRecalls must be managed by highlevelstaff inside a company. However,it may be very productive to use high-Method Impact Cost NotesEffective publiccommunicationsEffective customercommunications/recall w. directcommunicationsto impactedcustomersResponsive callcenter/chat roomEasy to locate andnavigate/use recallinformation onwebsiteCommunicationsthrough saleschannelFast and easyprocessing forreplacement ofproductPlug & playreplacement unitFree returnshippingOvernightshipment ofreplacement unitHigh Medium Cost may vary. Thiscould encompassdifferent types ofcommunications fromthe more passivepress releases toactively monitoringand impacting viralmarketingHighMedium(note: cost ofmaintaining ahigh-qualitycustomerdatabase maybe high)Medium Low The cost differencebetween a high-qualityresponsive call centerand a less-responsivecall center is marginalcompared to thepotential riskMedium tohighMedium tohighLowMediumHigh Varies Cost can be keptminimal if few questionsare askedVariesMediumVariesdependingon producttypeVaries, may notbe applicableVaries, low inmost casesVaries, low inmost caseslevel, trusted service providersto implement many of the recallfunctions. In fact, internal resourcesare often over-taxed during a crisissituation, causing a drop in serviceand customer dedication. RLMOther sources:CSCP - Consumer Products SafetyCommission (www.spscs.gov)FDA—Food and DrugAdministrati0n (www.fda.gov), forpolicies, see http://vm.cfsan.fda.gov/~lrd/recall2.htmlReverse Logistics Association(http://www.reverselogisticstrends.com/index.php)Center for Business Intelligence,Recall Conference (https://www.cbinet.com/conferences.cfm)American Society for QualityControl, The Product Safety andLiability Prevention TechnicalCommittee (PS&LPTC), (www.asq.org) has published a book (http://www.asq.org/qic/display-item/index.html?item=10181)Hannah Kain isPresident andCEO of ALOM, aleading packageassembly andfulfillment companyheadquartered inFremont, California.Kain, who founded ALOM in1997, has extensive experience inthe packaging industry. She hasthree university degrees and haswon numerous awards, includingABWA, NAWBO and Women’sFund, and has been featured inbooks and articles, including “CEOChronicles” and “Women WhoPaved the Way.”Gailen Vick is the Reverse LogisticsAssociation Founder and President.Offering a fullrefundHigh Varies If no replacementunits are available, therefund may be the onlyacceptable solution47 March/April 2008 • Reverse Logistics Magazinewww.RLmagazine.com

On the Move in Reverse LogisticsJerry Adamski recently joined GleasonCorporation as Global Customer ServiceDirector. He brings over 20 years ofexperience with Eastman Kodak Companyencompassing a wide range of experiencein global service and manufacturing. Inthis new corporate role, Jerry will focuson developing strategic plans for Gleasonglobal customer service in alignment withother business strategies. He will alsofocus on identification and implementationof world class best practices in totalcustomer support.Shelor Consulting recently announced thatRoy Steele has joined the company as vicepresident and senior partner. Roy has overtwo decades of field service and supportoperations experience including serviceparts management, field service operationsand repair center operations.Ixia, a leading, global provider of IPperformance test systems, recentlyannounced that Raymond de Graafhas been appointed to the position ofvice president of Operations. Mr. DeGraaf brings to Ixia about 15 years ofoperations experience most recently asvice president and general manager ofPrecision Communications and FlextronicsInternational four years prior.Mr. De Graaf most recently ledthe transformation of PrecisionCommunications—a leading provider ofrepair, refurbishment, resale, logistics andinventory management for leading OEMsand carriers worldwide—from a small,privately held company into a significantlylarger and more scalable business.Previously, Mr. De Graaf held severalsenior operations positions at Flextronics,including director of Global Operationsfor the global electronics manufacturingcompany. He led the company’s reverselogistics operations, supporting many ofthe world’s leading telecommunicationsequipment manufacturersService Net Solutions LLC recently namedChris Smith to the newly created positionof president of sales and marketingoperations.Prior to joining Service Net, Smith ledthe startup of ServicePower Field ServiceSolutions, a Louisville-based subsidiaryof Annapolis, Md.-based ServicePowerthat provides automated job scheduling,GPS tracking and navigation and warrantymanagement services for the servicedelivery and installation industries.He also has held executive leadershiproles at GE Warranty Management andMontgomery Ward.Jeffersonville, Ind.-based Service Net’sservices include warranty management,extended service programs, customerservice support, claims processing andservice contract underwriting for clientssuch as Toshiba, Samsung, Lennox,Maytag, Philips and Sony.MCA Solutions, the leader in service partsplanning and optimization, has expandedits executive team to include Jack Barr assenior vice president of strategic accounts.Jack brings more than 20 years of hightechsales, marketing, operations and business development experience to MCASolutions. He spent more than 12 yearsworking at SAP America where he helpedlaunch SAP’s strategic client-serversolution and was instrumental in SAP’sgrowth in the 90’s, exceeding personalsales targets by more than 220 percentannually over a seven year period.As SVP of strategic accounts, Jackwill lead the development of MCA’sglobal sales strategy with a strong focuson improving all sales processes andoperations.Pinnacle Data Systems Inc. (PDSi)recently announced today that TimothyJ. Harper has joined its executivemanagement team as Vice President ofGlobal Operations and Logistics. Mr.Harper comes to PDSi following 16 yearswith major communications solutionprovider Alcatel-Lucent (formerly LucentTechnologies) and AT&T, a world leaderof telecommunication infrastructure.Mr. Harper has extensive industryexperience in key areas of PDSi’sstrategic focus - Electronic ManufacturingServices (EMS) and mission-criticalsolutions for global Original EquipmentManufacturers (OEMs). His priorroles included executive positions inproduction, procurement, contractmanufacturing, repair, logistics, customerservice, and supply chain functions. Hewill manage a similar span of functionsat PDSi.Agilence, Inc., the leader in IntelligentVideo Auditing Solutions (IVAS), recentlyannounced the appointment of PedroRamos as Director of Retail Solutions. Ramos, formerly served as the assistantvice president for Loss Prevention atPathmark Stores Inc., a northeasternUnited States supermarket chain recentlyacquired by A&P. Ramos will haveresponsibility for managing Agilence’sretail solutions focused on reducingcashier fraud and improving assetmanagement for America’s retailers.While at Pathmark, Ramos managed theLoss Prevention and reverse logisticsprograms for 141 retail stores. He ledthe effort to re-organize Pathmark’sloss prevention program by utilizingAgilence’s automated solutions tocentralize exception reporting and videoauditing functions. The re-engineeringof Pathmark’s program resulted indramatic increases in auditor productivity,significant decreases in shrink and cashshortages and more effective use of lossprevention and audit payroll dollars. 48 March/April 2008 • Reverse Logistics Magazine www.RLmagazine.comwww.RLmagazine.comReverse Logistics Magazine • March/April 2008 49

y Paul Rupnow“Would you like fries with that RMA?”Most Reverse Logistics teams have neverthought to ask this question. You maybe missing a big opportunity to increaseyour revenues, profits and enhance yourcustomer experience.Up-Selling is not just a tool for your salesteam; it is an opportunity for anyonein your organization who is dealingwith customers. And up until now, itis an opportunity that has largely beenoverlooked by Reverse Logistics teams.Up-Selling is an opportunity for you toincrease customer satisfaction, increaseyour revenues and enhance your ReverseLogistics group profitability.Reasons to Up-SellUp-Selling is a win-win opportunity. Ofcourse your customer is unhappy to haveto call you and return a product, but ithappens to everyone who buys anythingelectronic. So quickly resolve their RMAissue and find out how else you can helpthem. You can help your customers byAdvertiser IndexReturning thoughts…Using a Customer Return Requestas a Reverse Logistics Up-SellingOpportunity50 March/April 2008 • Reverse Logistics Magazineoffering them opportunities to:• Save money with special, directfrom the manufacturer pricing• Obtain or upgrade to newerproducts• Purchase more of your products• Warranty their future• Improve customer satisfaction• Save shipping costFor your company and your ReverseLogistics team, up-selling is anopportunity to:• Generate additional revenuesand profits• Manage or sell new, old orexcess inventory• Improve customer satisfaction byturning the negative experience ofobtaining an RMA into a positiveexperienceUp-Selling Opportunities for ReverseLogistics TeamsThe following is a list of Up-Sellingopportunities and ideas to get you started:• Upgrades – you can offer, possibleat a discount from the retail price, anAstea www.fieldcentrix.com 5BMI www.bmionline.us 5Canon www.cvi.canon.com 5Chicago Tag and Label www.chicagotag.com 5Choice Logistics www.choicelogistics.com 5CompuVestwww.compuvest.comComtekwww.comtekcomsys.comCraters and Freighterswww.cratersandfreighters.comCycleonwww.cycleon.euDEXwww.dex.comFreeflowwww.freeflow.comFRS Europe BVwww.frs-europe.nlGENCOwww.genco.comIntechrawww.intechra.comJabilwww.jabil.comLi Tong Groupwww.litong.comMarketing Alternativeswww.mktalt.comMetechwww.metechgroup.comMontechwww.montechinc.comNVCwww.mynvc.comPelicanwww.PelicanOEM.com/rloTeleplanwww.teleplan.comTest Technologywww.testtech.comTotal Return Solutionswww.totalreturnsolutions.caUnipart Technology Logistics www.unipartlogistics.comupgradeto a newor morerecentmodel. (Mostcustomers wouldprefer a newer19 or 22 inchLCD for a smallincrease in price,rather than a directwarranty replacementfor their 14 inchLCD – “would youlike to Super Size thatorder?”).• Companion products orservices – companion products andaccessories are typically very highmargin items, be sure to offer themand maybe even at special pricing.Printers need toner. Cameras needcases, batteries, memory. LCD TVsneed to be mounted.• Free Shipping – if you will beshipping a replacement productanyway, there may be no additionalcost to adding additional items to thebox.• Special pricing – since you may bea manufacturer, you may be able tooffer below retail pricing, especiallyon newer but not the most recentmodels.• Inventory Management – there maybe a good opportunity to offer old orexcess models as replacement items oras an additional purchase. This mayhelp you reduce your replacementitem costs or dispose of less desirableinventory. It may also help reduce theneed to incur high repair costs to keepold models in stock.• Extended Warranty – a cherished veryhigh profit item for retailers can nowbe offered to your RMA customer ontheir returning item.So, go ahead, try that RMA order withfries or super-sized. You may find thatUp-Selling provides your customers, yourReverse Logistics team and your CEO witha much higher level of satisfaction.Good Luck!Learn and Share Reverse Logistics bestpractices, insights and strategies with PaulRupnow at ReverseLogisticsProfessional.comwww.RLmagazine.comStrategic Partnerships NowAvailable at the Touch of a ButtonRL Quote empowers manufacturersand retailers in search of the rightpartner.• Send RFIs anonymously to ourworldwide database of suppliers• Screen your 3PSP responses• Find the right partnerFree Industry Expertise – The RFI responses fromRL Quote come from the top executives at 3PSPswho are on the frontlines of the industry everyday.Anonymity – During the RL Quote process, yourcompany’s identity is kept confidential so youmaintain control over who you allow to contactyou.Wider Selection – RL Quote allows you to broadenyour search at no cost and is a perfect companionto your usual resources.New Technologies – The technologies for ReverseLogistics are evolving everyday. The best way tostay ahead of the technology curve is to allow theindustry experts to evaluate your objectives andoffer alternative solutions.For more information visit RL Quote atwww.rlquote.comPOST RFI