Exam 15: Supply Chain Sustainability

Correct Answer:

Verified

There are many opportunities to be "green" and be able to lower cost. This is especially True if a broader perspective rather than just recycling and disposal is taken. For example, several years ago, P&G and Walmart decided to reduce the size of the plastic bottles used for liquid detergent by reducing the water content of the liquid to make it more concentrated. There was some customer resistance at first because it appeared that the same price was being charged for less product. However, P&G was able to convince customers that they would achieve the same results with about 50 percent less of the liquid detergent. Once the customers accepted this concept, the impact was dramatic. Transportation costs were reduced by lower weight and volume, that is, weight-density was improved, resulting in lower rates. Packaging costs and warehousing costs were lowered with the smaller container size. Store productivity improved with less required shelf space and easier handling. Another example is Supervalu, a large grocery retail and wholesale company, and Wegmans, a large regional grocery chain. They saved thousands of dollars annually by putting more items in each bag or even avoiding using a bag in some cases. This was a simple cost-saving strategy with a positive sustainability impact. (Page 622)

Correct Answer:

Verified

Reverse flows have been a part of logistics and supply chains for many years. Consumer goods companies and transportation companies have always dealt with damaged products that often required returns at some level. Transportation companies dealt with customers who would not accept damaged products, and they accepted liability for the value of the damaged products.
Many additional traditional examples of reuse, recycling, and so forth could be offered to make the case that reverse flows have been a part of the business operations of some companies for many years. The recent increased focus on reverse flows is attributable to the significant increase in the need for reverse flows.
According to some experts, a large percentage of what is sold may be returned. No one has an exact measure, and the percentage will vary among industries, but it is estimated that returns can range from a low of about 3 percent to a staggering 50 percent in some sectors. As the preceding data indicate, returns are a significant issue in some industries, and this trend appears to be increasing.
The following are eight categories of reverse flows:
1. Products that have failed or are unwanted, damaged, or defective but that can be repaired or remanufactured and resold
2. Products that are old, obsolete, or near the end of their shelf life but still have some value for salvage or resale
3. Products that are unsold from retailers, usually referred to as overstocks that have resale value
4. Products being recalled due to a safety or quality defect that may be repaired or salvaged
5. Products needing "pull and replace" repair before being put back in service
6. Products that can be recycled such as pallets, containers, and computer inkjet cartridges
7. Products or parts that can be remanufactured and resold
8. Scrap metal that can be recovered and used as a raw material for further manufacturing (Pages 625-626)