The Circular Economy
“Circular Economy is an economic system aimed at eliminating waste and the continual use of resources. Circular systems employ reuse, sharing, repair, refurbishment, remanufacturing and recycling to create a closed-loop system. Minimizing the use of resource inputs and the creation of waste, pollution and carbon emissions.“– “The Circular Economy – A new sustainability paradigm?”
After 2 years of researching, I finally took the leap and purchased an Electric Vehicle (EV).
In doing my research I noticed car reviews were always asking about the EV’s battery at the end of its life.
This is an excellent question which was concerning for me as well.
Conversely, this was a different conversation than is for Internal Combustion Engines (ICE).
Think about it, when did you last read a car review asking what will happen to an ICE engine.
Granted that, vehicles are the most recycled products in the world; however, the conversation about EV batteries reflects an increase consciousness of the Circular Economy.
In short, a recent survey conducted by Accenture found:
- that, most importantly, 83% of respondents said its important or extremely important for companies to design a product that is meant to be reused or recycled.
- likewise, a further 72% of respondents said they’re currently buying more environmentally friendly products than they were five years ago.
What does this mean for Reverse logistics?
Reverse Logistics. A complete supply chain dedicated to the reverse flow of products and materials for the purpose of returns, repair, remanufacture, and/or recycling.– Reverse Logistics Association
The reuse and recycling of returned products, combined with the era of free returns, places a lot of demand for Reverse Logistics .
As such, experts estimate the world wide reverse logistics market value at US $967.89 Billion. Likewise, they further estimate a growth of 5.9% CAGR
What Does this mean for the Final Mile ?
Final Mile is a phrase widely used to refer to the final leg of a delivery. Final Mile is also known as Last Mile.
The increase volume of products flowing back from the consumer is placing pressure onto Final Mile and Logistics companies.
Interestingly, with the mass adoption of smart mobile devices starting in 2007, the final mile industry has gone from 2 way radios, pigeonholes, paper slips and excel sheets to real time tracking, online entry and automated routing. Sadly, most are using this technology only for “forward” logistics.
- Only 6% of the companies who use our technology for forward logistics are using any technology for reverse logistics.
- Moreover, 34% are using excel sheets, paper based or are using nothing at all. Some are simply providing no tracking.
- Surprisingly, 60% don’t participate in the final mile of Reverse Logistics. Though they could easily take part.
Why is this?
Simply put, it comes down to, “is the struggle worth the outcome”.
Because most Final Mile Forward Logistics technology doesn’t fit the needs of Reverse Logistics that means a technology investment needs to be made.
Here are some good reasons why you need to invest in the Final Mile Reverse Logistics chain:
- Illicit Trade. Theft during the Final Mile helps to fuel illicit trade.
- Brand Protection. The resale of damaged goods through illicit markets damages the perception of a product’s brand.
- Data Gap. This can be broken down into 2 categories which are:
- Big Picture. Decision makers need the data from each silo to see the big picture and make decisions. Paper and Excel doesn’t provide the Final Mile Reverse Logistics data to the decision makers. A proper Reverse Logistics Final Mile technology solution will provide the needed data.
- Predict and Prepare the Returns Center. Operation Managers need the data to see the final mile picture. This will allow them to prepare for the change of flow back at the Returns Centers.
How do we address this?
Previously, I wrote a blog discussing Innovative Ways to Pick Up a Return which laid out two ways to address Reverse Logistics in the final mile space. These two was are:
- Use your drivers as a resource. Have your drivers scan the product being returned at the point of pick up. They check the return product and quantities instead of at the Returns Center, saving you time and money. This also starts the tracking and tracing of those returned goods right away, not later at a hub or warehouse.
- Pick Up and Go. With the product already securely packaged you can capture a Proof of Pick Up (POP) and Time of Pick Up to start the tracking and tracing of those goods
Looking Forward with Technology
Organizations and manufacturers are creating unique hash keys for each product that then connects to its unique block chain record. With this in mind, connecting Reverse Logistics Final Mile technology to access a product’s block chain record adds extra layers to security, tracking and auditing.
For instance, Blockchain can confirm the right product at the point of pick up.
Most importantly, Blockchain can assist with sorting by ensuring the right product goes into the right shipping container going to the right location.
Similarly, blockchain helps to correctly place products into a “destruction” shipping container. Which means you can confidently create “death certificates” en mass for all products inside a “destruction” trailer.
You maybe surprised to know there is a new technological upgrade which is being quietly deployed with little notice, that is Dual GNSS GPS.
Dual GNSS GPS brings mobile GPS accuracy down from 5 meters (16 feet) to 30 cm (12 inches) and consistently.
There are two reasons why this hidden upgrade will have a positive effect on Reverse Logistics, they are:
- Creating Shipments in the Field. Unfortunately, with Reverse Logistics, drivers can arrive at pick up locations without an electronic shipment. For that reason a driver needs to use their mobile device to create a shipment, in the field, at the point of pick up. Thankfully GPS coordinates can accurately be geolocated to an address using the consistent refined accuracy of Dual GNSS GPS. Using the geolocated Pick Up Address a shipment is created. As a result tracking and tracing can take place right from the point of pick up.
- Chain of Custody. Proving a pick up location when returning controlled substances like pharmaceuticals, cannabis and tobacco has relied heavily on location barcodes. As a result, the cost of implementing and managing location barcodes has been a burden since the ’70s. With the real and consistent accurate GPS coordinates captured by Dual GNSS GPS, location barcodes will become a thing of the past.
In summary, the consumer engagement into the Circular Economy is putting more and more pressure on the Final Mile industry. But by using the right technology, Reverse Logistics can become a source of gain and no longer a source for pain.
Gordon More has been designing software and mobile applications for the Delivery and Logistics Industry since 2005.
He is passionate about designing software to solve complex issues with elegance and simplicity.
His work improves security and efficiency in the US for pharmaceutical deliveries, and brings ease to Reverse Logistics in Australia