Message From The President

by Gailen Vick, Reverse Logistics Association

Reverse Logistics Magazine, Edition 15

The financial meltdown on Wall Street in the USA had an economic impact around the world and everyone is wondering what will happen in the future.

I want to take a moment to share a few thoughts, not to scare anyone, but the very opposite, to lift you up. All of you understand that anytime there are layoffs in any industry, it opens up more opportunities for the 3rd Party Service Providers (3PSPs). Here is why: Sony Ericsson

When a major retailer cannot afford to hire the thousands of seasonal people to help with the holiday rush, they are put into a bind. They have to find ways to get everything done just as before with less people. How can they possibly do this...easy, outsource, they manage the process by use of a 3PSP.
When a company files for “chapter 11 protection” and closes stores, they need a 3PSP to help.
When layoffs or liquidation occurs, who does the liquidation safely, productively and securely? The answer is easy, a Reverse Logistics 3PSP liquidator!

3PSPs are designed to be much more efficient at amortizing cost across multiple product lines while keeping overhead fixed. So when a company has to layoff, most of the time they outsource a process in order to keep customer satisfaction high. Whatever was outsourced, it probably wasn’t the branded company’s core competency in the first place.. It shouldn’t have been in their process, just like everyone learned 10-15 years ago in the manufacturing industry. So, contract manufacturers popped up all over, and then the consolidation of the industry occurred. The same consolidation will occur in ours. The 3PSP with the best practices will always win.

All industries have no choice during this economy but to outsource more RL as they no longer have the manpower. They need the cost savings that a 3PSP can offer to the OEM or retail company. RLA has been receiving news in the last 6 months about 3PSPs that are winning new business during this economic downturn. Our process/industry is hiring at a tremendous rate. One of many 3PSPs that I have spoken with has hired over 700 people in the last 6 months and many others have come close to that figure! Most 3PSPs are in heaven at present, while others are feeling financial pressure. Why are some winning while others are losing? Simple, some have best practices!

In our last two issues of Reverse Logistics Magazine, I’ve expressed my concern about companies not taking advantage of deploying “cash saving Reverse Logistics processes.” I have heard from many of you who took me to heart and have made changes at your company--congratulations! Since our last edition of the magazine the economy has continued to plummet. I want to repeat the statement I made - “Now is the time for 3PSPs to ramp up, not slow down.”

Some companies have announced travel freezes. While travel expenditure reduction might look good for a month or two, this strategy might end up costing you more. You need to stay in front of your vendors and customers by having your Quarterly Business Reviews. Many OEMs and retailers are not letting budget restraints affect their ability to stay close to their vendors. Major retailers and OEMs have found ways to conduct QBRs at conferences and tradeshows in order to reduce their travel budget along with their partners.

Not only is RLA encouraging companies to hold their QBRs at our conference as in the past, but to pull in their upcoming QBRs for the next 2-3 quarters. We’re expecting over 700 companies, with more OEMs and retailers than ever before. Reduce your travel expenditures, come and meet together at the most inexpensive meeting destination in the world, Las Vegas. RLA will set up private meeting rooms for scheduling QBRs between OEMs/retailers and 3PSPs.

This month’s edition is focused on turning cost centers into profit. Please join with me in reading the cover story on how Best Buy has done this very thing!

Gailen Vick
President.
ReverseLogisticsAssociation.org
RLAShows.com