Innovation and Reverse Logistics

Posted by Seema Winsor on June 09, 2010 in Event-related blog postings, Innovation, World Innovation Forum

World Innovation Forum, 2010 at Nokia Theater in NYC (photo by www.photographybydov.com)

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The first day of World Innovation Forum (WIF) 2010 was all about innovation diversity touching all segments of both the businesses and the customers. Although the example of Healthcare was used in most presentations, the guiding principles seemed to be easily transferable to any area of business. Intrigued and excited to explore the possibilities with my own area of work, Reverse Logistics, I found myself connecting the dots in different ways to map out a range of outcomes.

Reverse Logistics is an area full of opportunities for us to seize and redefine its value proposition. Since innovation is more about increasing the outcome value rather than focus on reducing the cost, it makes the reverse logistics an attractive area to explore.

This is an area fueled by What a Customer does not want (and hence the return)- and a business’s ability to respond to this trigger in an innovative manner.

This ability, I believe, will give them the much needed differentiation in the market place. With environmental and economical concerns at the helm, reverse logistics business model could provide untapped, unanticipated value to companies with products that are re-usable and designed to work reliably over a longer period of time.

As we heard from Chip Heath, innovation is about change and change is about appealing to both the emotion and the analytical sides of any decision maker. Also we heard from several speakers the distinction between analysis paralysis and creating useful data with the customers in an open environment. With short experiments we can quickly determine if our hypothesis of innovative idea will work or not. This is an empowering idea that fosters spirit of innovation especially of business model innovation. Old data might be able to support the old or as-is business model but does it give us enough information to realign the value propositions to the growth model?

Just like Michael Porter highlighted in the Healthcare example, the value based reverse logistics would have to be organized around the return condition; volume and experience in managing different types of returns, importance of measurable outcomes, rethinking the value of reverse logistics for the business and the customer and putting information technology to work.

Different companies have different approaches to “green economy”. Companies with rental and leasing business models have to deal with customer returns all the time – and these are returns created by design. On the other hand the consumer market generates its share of returns determined by customer satisfaction (of both the rider and the elephant). In either case the returns entering the reverse logistics stream are potentially reusable or “green”. With a carefully thought out value equation we can recover what one customer returns into something another customer would want, at the right price for a sustainable, and profitable business model.

I am looking forward to and will blog from Day#2 at the WIF2010 and see how the spirit of innovation is inspiring us to make a difference & create value in this multidimensional world of open communication.

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Tags: "World Innovation Forum" #WIF #WIF10, Innovation, Reverse Logistics, Seema Winsor, supply chain