Simon Distribution Centers is a full service fulfillment company. Its clients contract with

Simon Distribution Centers to warehouse and distribute their goods. Simon Distribution Centers

also processes any returned items for its clients. Recently, the challenges associated with reverse

logistics are growing (please explore the concept of reverse logistics by yourself).

The volume of returns has grown significantly. To enhance their competitive advantage, the company's

clients are offering a free return policy. There is no charge for shipping items back to the

warehouse. The companies provide their customers with a prepaid shipping label. In addition, there

is no restocking fee. This policy, used by most of its clients, has driven this increase in returned

items. Until now, Simon Distribution Centers had a computerized-based management system, but not one

specifically designed for warehouse management. Its system was sort of homegrown and its capability

was expanded as the business expanded. However, with the reverse logistics issues, the system is no

longer viable.

In addition, government regulations and pressure from local environmental groups are creating another

issue for Simon Distribution Centersenvironmental sustainability. The environmental sustainability

issue has two components that are contributing to the sustainability concernstransportation

and reverse logistics. From a transportation perspective, the company's trucks are racking up an increasing

number of empty miles. More often than not, the trucks are returning empty.

Reverse logistics is another matter. Simon Distribution Centers is getting pressure from its clients

to collect data on the returns. In the past all Simon Distribution Centers did was accept the return,

follow a predetermined process to see if the return was salvageable, and either dispose of it or send

it back to the original manufacturer. However, the data the clients want are much more detailed, for

example, can it be repaired or refurbished? Since the company's competitors are offering enhanced

data collection, so must Simon Distribution Centers.

What is your recommendation to Simon Distribution Centers concerning their sustainability and

operations efficiency issues? Analyse at least two significant considerations that would influence your

recommendation to Simon Distribution Centers with persuasive examples.