News Articles

December 1, 2008

Reverse Logistics: Hold 'Em or Fold 'Em

Some companies are turning a tidy profit by reselling returned products that were once consigned to the scrap heap. The trick, they say, is figuring out what's junk and what's worth a second look.

Reverse Logisitics: Hold 'Em or Fold 'Em
By Mark B. Solomon, DC Velocity, December 2008

For years, Cisco Systems Inc.'s product returns operation was pretty straightforward stuff. The merchandise arrived, and with few exceptions, it was thrown out. From 1995 to 2005, Cisco discarded more than 95 percent of its returned goods. According to company estimates, the Web networking giant in 2005 dumped $500 million worth of returns, junking enough product to cover 12 football fields knee-deep. By 2005, Cisco's returns business was a bona fide cost center. That year, it spent $8 million more to process returns than it generated in revenue from selling some of the items at residual raw material value.

Dan Gilbert, Cisco's vice president, supply chain field operations, thought there was a better way. But he couldn't be sure until he instructed staffers to visit one of Cisco's receiving warehouses and pull a cross-section of returned goods off the conveyor belts. The employees were told to visually inspect the merchandise and dispatch those items that passed muster to company engineers for further testing.  Read more

RedPrairie does not maintain, is not responsible for the content of, and does not endorse, any of the web sites linked to the RedPrairie web site. Access or connection to these linked web sites is at your own risk. The content, accuracy and reliability of, and the opinions expressed and other links provided in, these non-RedPrairie web sites are not investigated, verified, monitored or endorsed by RedPrairie, and RedPrairie disclaims any warranty, express or implied, with respect to the contents of such web sites.