Returning Thoughts... Reverse Logistics Metrics: Targeting Success with a Performance Management Framework

by Paul Rupnow

Reverse Logistics Magazine, May/June 2008

Reverse Logistics metrics are essential to managing and improving a Reverse Logistics operation, whether you are an Original Equipment Manufacturer (OEM) or a third party Reverse Logistics service provider. Developing a framework to define and monitor your metrics can help you to better target success for your Reverse Logistics operations.

“Utilizing key performance indicators and industry benchmarks can help a Reverse Logistics team become a “Best in Class” operation,” says Michael Blumberg of Blumberg Advisory Group in a recent presentation of Reverse Logistics research and benchmarks. To help you help identify and define the Reverse Logistics Key Performance Indicators to monitor and benchmark for performance improvements, I have prepared a sample framework with some key performance metrics below:

A typical manufacturer may identify the key areas of Reverse Logistics as: Customer Satisfaction, Financial Performance, Manufacturing (or Returns Processing and Refurbishment), Transportation and Warehousing. Within each operational area, key performance indicators can be established. Some sample indicators are outlined below as a starting point to develop an outline specific to your requirements. In addition you may want to include the indicators outlined with your customers in your Service Level Agreements (SLAs):

Use this example to get started defining your metrics, developing your framework and targeting Reverse Logistics success. Define your benchmarks and compare them with others in the Reverse Logistics industry. Your customers, your Reverse Logistics team and your CEO may thank you for your forward thinking.

Good Luck!

Learn and Share Reverse Logistics best practices, insights and strategies with Paul Rupnow at ReverseLogisticsProfessional.com

Reverse Logistics Magazine, May/June 2008