Reverse Logistics in the Automobile Industry
How well does the automotive industry perform reverse logistics processes? For example, what can be
done with old automobiles? Where are they sent? What happens to them? What reverse logistics
activities are involved?
Reverse Logistics in the Automobile Industry
Reverse logistics is becoming more and more critical and strategic process in the
automobile industry. This is because of the various reasons such as legislative policy regarding
sustainable and environmental issues and specific product calls. There is an increasing need for
recovery of returned vehicles due to increased attention given on environmental concerns.
However, many automobile manufacturers have no satisfactory reverse logistic network or
system for reusing and recovering returned products. Therefore, automobile manufacturers
should rely on forwarding logistics, revere logistics and remanufacturing and repair services in
order to promote efficiency, quality, growth, and service (Chan, Chan & Jain, 2012).
The automobile industry has grown to maturity levels through increased market
competition, sound environmental regulations, rising consumer status, and resource utilization.
For instance, effective recall of defective automotive can improve customer satisfaction and
enhance the recyclability of the product throughout its entire lifecycle. Reverse logistics in an
automobile has been used in the aspect of product reusing, recycling and remanufacturing as well
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as recalling due to defective products. Therefore, reverse logistics in the automobile industry has
been increasingly important. However, reverse logistics is a new concept in the automobile
industry. The automobile industry has embraced reverse logistics and reverses processes that
emphasize the sustainable environment. Reverse logistics has been used in product return, waste
disposal, and recycling, remanufacturing, repair and refurbishing. Reverse logistics has an
economic impact on company outcomes (Chan, Chan & Jain, 2012). This is because it improves
performance and impacts value reclamation.
Old automobiles have been used in the recycling process and dismantled to produce raw
materials for developing new products. Autos are bought at insurance and auctions and are
impounded or abandoned. However, others are returned to the manufacturer for repair,
remanufacturing, refurbishing, recycling, reusing and rounded to produce new raw materials. Old
automobiles are sent back to the manufacturer or bought by other actors in the automobile
industry to use them as raw materials for producing new products. Old automobiles are used to
various industries and used raw materials for making other innovative products such as musical
instruments made of old car parts. Old automobiles are used to recapture value through
remanufacturing, refurbishing, recycling and reusing. Other actors have used auto salvage
businesses for old automobiles. Therefore, old automobiles are sent to salvage yards in various
ways. They are bought from insurance or other auctions or could be impounded or abandoned.
Others are bought directly from the owner or a repair facility (Sindi & Roe, 2017).
Old automobiles can be fixed and resold back in the market. However, most old
automobiles are dismantled. This allows all fluids to be drained and recaptured. Besides, others
are recycled and resold. Reverse logistics has allowed old automobiles to be recycled and reused.
However, waste management companies dispose of the unrecyclable. For instance, antifreeze is
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resold after the recycling process. The auto recycling industry deals with old automobiles and
uses reverse logistic systems in order to ensure proper handling of old automobiles (Sindi & Roe,
There are various reverse logistic activities used the automobile industry. The main
reverse logistics activities involved in the automobile industry are product return, recalling,
reusing, recycling, remanufacturing, refurbishing and dismantling in order to create new
products. This has allowed companies to recapture value and enhance the levels of customer
satisfaction. Reverse logistics activities have improved the process of recapturing value or value
reclamation and ensuring proper disposal of old automobiles. Therefore, companies should
embrace the process of reverse logistics in the automobile industry in order to ensure value
recapturing and proper disposal of old automobiles through sustainable environmental strategies.
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Chan, F. T., Chan, H. K., & Jain, V. (2012). A framework of reverse logistics for the automobile
industry. International journal of production research, 50(5), 1318-1331.
Sindi, S., & Roe, M. (2017). The Evolution of Supply Chains and Logistics. In Strategic Supply
Chain Management (pp. 7-25). Palgrave Macmillan, Cham.