Gailen Vick Executive Director www.RLA.org May 29, 2013

1. Gailen VickExecutive Director www.RLA.org May 29, 2013

2. The Reverse Logistics Association was formed: • To support third party service providers • To educate OEMs & Retailers on why they need to outsource their RL • To enable Private Industry, Consultants, Academics & Government Leaders toconnect and share new ideas and opportunities

3. What Is The RLA’s Mission? To educate all industries about the Reverse Logistics processes which are common to all. To produce events around the world where OEMs, ODMs, Branded and Retail companies receive information on RL support services.

4. Where Does Reverse Logistics Fit? • Sustainability

5. How Do We Spread The Word? - RLmagazine.com • 51 Editions • WW Circulation of 90,000+ • Published Monthly • Weekly News Clippings kindle • DIGITAL – on all e-readers

6. The RL Dilemma di·lem·ma: a difficult or persistent problem Source: Merriam-Webster dictionary

7. Reverse Logistics Dilemma Every Company Has An RL Dilemma Obvious- Consumer Electronics, Computers, Automotive Not so obvious- Books, Apparel, Retail, Grocery, Software Practically invisible- Pharmaceuticals, Aerospace, Agriculture, Medical, Energy

8. Companies don’t know they have aDilemma! Senior Management Frequently Unaware Of: - Size of RL operations - Cost of RL operations - Impact of RL operations on bottom line - Impact of RL operation on customer service Impact of legislation on RL Many line/staff managers don’t know RL Operations even exist SEE THIS MISS THIS

9. How to Make a Difference Ownership within Enterprise Who Owns the RL Function? Distributed across functions “Hidden” in operations or customer service Measurement Tools to measure the performance of RL? Few, specialized software tools Financially absorbed in other departmental budgets

10. The RL Impact RL affects the bottom line • Finance • What are the true costs / benefits to the organization? • I.E. Actual costs vs. retained asset value • Operations • How is RL affecting operational efficiency? • I.E. Quality improvements based on RL • Sales & Marketing • What is the effect of RL on sales? • I.E. Customer satisfaction, brand reputation, remanufactured goods impacting prices

11. Source: RLA Amsterdam Conference 2010, Keynote Address Rehman Mohammed, Cisco

12. (2.4% of FY’09 Net Saving) FY’09 Net Income – $ 6.1 Billion GAAP Sources: RLA Amsterdam Conference 2010, Keynote Address Rehman Mohammed, Cisco & Investor.cisco.com – FY 2009

13. What is the Impact to Mother Earth? It all affects the bottom line • Environmental • Are we a good corporate citizen? • Are we alienating clients? • Governmental / Legislative • Are we meeting governmental requirements? • Are we open to legal action? • E.g. RoHs, WEEE, SB 50 • Bottom Line Cost • 3% to 15% in every company

14. After tax Profits; Are They Right? Product Production Cost % Returns Take Away From Bottom Line Profits Reverse Logistics IT Management Results If You Manufacture 1 Million Units/Year Revenue per Unit is $1 - $1,000,000 total Profit per unit is 5% After Tax - $50,000 total Average Return Rate is 10% - 100,000 total units Returns represent $100,000 in lost revenue – After returns your P&L shows a $50,000 LOSS! Reverse Logistics recovers 80% of the returns - $80,000 to the company’s after tax profit After Tax Profit with RL recovery - $30,000 So who is most important, the VP of Sales that took $50K from your company, or the Reverse Logistics professional that gave you a Bottom Line - $30K After Tax Profit?

15. Solution Create A “C” Level Position For RL Management • The Chief Reverse Logistics Officer (CRLO) would: • Have authority to make changes on RL globally, • but day-to-day responsibility stays in the hands of each Department • Monitor the P & L to develop a Virtual profit center • Acquire the necessary tools to support the finance department and report effectively to the Executive Staff Resolve The Dilemma

16. Please hold your Questions