Supply chain management

REVERSE LOGISTICS

Objective
• To make RL (Reverse Logistics) efficient and cost effective for Indian Company • Identifying the drivers of a growing market for recycled and remanufactured products. • Creation of economically product return. efficient

Logistics Channels
• Forward Logistics: movement of goods from source to the point of consumption

• Reverse Logistics: return goods to supplier

Reverse Logistics
More complicated than forward logistics because: 2. Presence of multiple reverse distribution channel -direct return to manufacturer -Indirect return to repair facilities 6. Individualized returns with small quantities. 7. Extended order cycles associated with product exchanges.

Background
• No Indian manufacturer across any sector has ever claimed responsibility for their faults. • Few companies in India has come forward to accept that they have found some fault in their own product.  • Growing environmental and economical concern.

NOKIA
• August 2007 Nokia had issued an advisory about faulty batteries in some of its phones. It said 46 million Nokiabranded BL-5C batteries were vulnerable to a short circuit that could cause them to overheat while recharging, and offered to replace them for customers who are concerned.

SONY
• 4 Sep, 2008 Sony says it is recalling 440,000 units of ‘Vaio’ laptop computers worldwide due to faulty parts that could trigger overheating.

APPLE
• 20 Sep, 2008 Apple Inc said some power adapters for the latest iPhone can break and lead to the risk of electric shock and urged users to exchange them.

Purpose of RL
• Unsatisfied customer • Environmental goals • Lack of Non-renewable Resources • Defects in product

Key challenges
• Localization and estimation of potential returns • Demands for new and reusable products. • Probability that a returned product be in a specific state

Recovery options
• • • • • • Repairing Refurbishing Remanufacturing Cannibalizing Recycling Disposal

[4]

Recovery paths[8]
M R C

Manufacturer collects from consumer, retailer is not involved.

M

R

C

Retailer collects from consumer and manufacturer buys-back from retailer

M

R TP

C

Third party collects used products from the consumer.

Findings
• Generally RL system are case based • System are only for one or two recovery options • Strategic model is only developed

Objective of model
• Most desirable shipping options (direct versus consolidated) • Transportation mode

Model solver
• Various types of commercial solver is available 2. IBM’s
1. 2. OSL CPLEX XPRESS-MP

3. Dash
1.

4. MIPLIB

Genetic algorithm

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