Benchmarking Model for Reverse Logistics Entry by Third-party Providers

Reverse logistics has gradually become a very important economic activity in 21 century. In general, in addition to retrieval, transportation and disposition as three distinct reverse logistics activities, value-added services such as JIT, quick response, program solutions are most important. The entry of third-party providers for reverse logistics is to strengthen core competences, lower costs and operating risks as well as improve competitiveness of the supply chain. Since reverse logistics is much more specialized, it's not easy for a third-party provider to enter the reverse logistics market. Benchmarking is one of the most important management methodologies for a company's decision-making. The benchmarking decision-making model is composed of six key steps: research of existing reverse logistics issues and identification of customers, survey of existing repeat customer needs, survey of competitors and competitors' customers, gap analysis, feasibility studies and development of positioning strategy. This model puts insights into Chinese third-party logistics providers who would like to pursue reverse logistics as a new market.