| Abstract: | The private-sector marketplace has identified the reengineering of the structure and management of the supply chain as a great untapped business opportunity. In traditional supply chains poorly structured operational and financial decision making institutionalized the poor management of material resources. This nonoptimized management process results in the generation of impaired material resources, which leads to solid and hazardous waste, as well as additional operating costs throughout the supply chain. The way in which the marketplace is addressing the issue of impaired material resources is by transferring the ownership and liability of impaired resources from the customer back to the supplier. The marketplace is also implicitly saying that the supplier must redesign its products to eliminate/minimize waste, or if the supplier fails to accomplish this goal, the supplier will be forced to absorb the costs associated with managing impaired material resources. The ramifications of this change are truly of historical proportions. The utility of a material resource to create wealth has throughout the centuries almost always required its ownership. Ownership has also denoted that the owner accept any liabilities created by the material resource. This is now all about to change. To support this change, a vastly expanded infrastructure and new management systems will have to be developed. This article shows how to manage the supply chain and impaired material resources. The new system that will operationally and financially manage these changes as well as create new organizational decision-making drivers is Reverse Logistics Management (RLM). |
