Some articles addressing Reverse Logistics

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Some articles addressing Reverse Logistics

• Manufacturing Automation Integration Lab.
• 2004. 04. 09
• Eoksu Sim(ses_at_ultra.snu.ac.kr)

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Contents

• Some books
• Strategic Supply Chain Alignment 1998
• Introduction to Supply Chain Management 1999
• Modeling the Supply Chain 2001
• Supply Chain Management Based on SAP Systems 2002
• A paper
• Reverse logistics system planning for recycling
  electrical appliances and computers in Taiwan
• What I will do

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Reverse logistics in some books
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Strategic Supply Chain Alignment Best practice
in supply chain management

• Editor John Gattorna
• Assistant Editors Theresa Jones, Alister Danks,
  Yamini Dhillon, Lucinda Holdforth
• Gower Publishing Limited 1998

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The strategic alignment model
INFORMATION ENABLERS AND DRIVERS
THE MARKET
The different market segments The key customer
values The marketplace dynamics The causes of
varying demand patterns
Creating Customer value
Integrating supply with demand
Formulation of strategy
STRATEGIC RESPONSE
Logistics requirements of each market segment
Operations and distribution
Channel strategy
Supply chain configuration
Ties the whole framework together
CULTURAL CAPABILITY
Diverse skill cultures to meet customer
requirements
Execution of strategy
Organization options
Change management
LEADERSHIP
Leadership team to understand, shape and drive
the logistics strategy into the marketplace
Leadership style
Vision
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Special interest

• Australias fast-moving consumer goods industry
• The SC in the telecommunications industry
• The healthcare SC
• Chinas SC challenge
• Reconfiguring the automotive industry SC
• Reverse Logistics
• Bringing the product back taking it into the
  future

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Introduction

• Some smart companies implementing RL strategies
• BMW, Sears, Tesco and Xerox
• Reverse logistics definition
• An organizations management of material
  resources obtained from customers
• The collection of used, out-of-date or damaged
  products and packaging from customers to a point
  of ultimate disposal.
• The coordination of processes to ensure complete,
  efficient and effective utilization of products
  and material throughout their entire lifecycle.
• Information in reverse logistics
• A key attribute of reverse logistics
• Product and parts usage profiles return
  profiles
• To develop and understand customer consumption
  patterns more thoroughly

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Drivers of reverse logistics

• Powerful drivers forcing companies to move RL
• Government legislation
• Global warming, the greenhouse effect and
  increased pollution
• Some regulation laws to develop shared producer
  responsibility.
• Shortening product lifecycles
• The increased volumes of waste entering RL
  systems
• The increased cost of managing the products
• New channels of distribution
• Products may be damaged in transit
• Products dont appeal to the customer in a real
  rather than virtual state.
• Shifting power through the SC
• Buyers and retailers

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Reverse logistics in action

• Two different issues
• Six different reverse processes
• Physical network to facilitate these processes.
• Closed loop
• Used materials are returned and processed by the
  producer
• Open loop
• Materials and products are collected by the
  originator, but processed by other parties.
• Reverse processes
• Refurbishment or remanufacture/Repair
• Reuse/Resale/Recycling
• Scrap

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Reverse logistics challenges

• Difference in products and their returns
• Products To customer through efficient,
  established channels
• Return or collection unpredictable and often in
  uneconomic quantities as small as single items.
• Uncertainty in companies
• How much product they will receive back
• What condition product will be in.
• Hiring a third-party organization
• Supply forecasting
• To be in a better position to manage processing.

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Trends in reverse logistics

• Developing faster, more efficient and
  cost-effective RL systems
• Design for disassembly
• To understand how new products can be designed to
  be dismantled
• To understand how current products can be
  dismantled
• To improve opportunities for recycling the
  product and component
• Recycle more material
• To use more recycled material. (The car industry)
• Increased product lifecycles
• Establishing modular design techniques
• Using standardized product interfaces.
• Materials
• To use recycled and recyclable materials in their
  products

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The future reverse networks

• A physical logistics structure
• To get the products back quickly, but at the
  lowest possible cost.
• Third-party operators, dedicated facilities
• Financial impact
• Products will be leased rather than sold to
  customers.
• Producers can track, receive and dispose of the
  product at the end of its life.
• Information technology
• Two dimensional barcodes, miniature coding.
• This data management
• To track the movement of products between
  customers
• To identify how often the product has been
  returned for recycling
• To improve the reliability of products
• To identify particular problems in the reverse SC
• To improve forecasting of the supply of goods

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Introduction to Supply Chain Management

• Robert B. Handfield
• Associate Professor of Purchasing and Operations
  Management
• Dept. of Marketing and SCM
• The Eli Broad Graduate School of Management,
  Michigan State University
• Ernest L. Nichols, Jr
• Associate Professor of Operations Management,
  Decision Sciences Area, and Director of FedEx
  Center for Cycle Time Research
• Fogelman College of Business and Economics
• The University of Memphis
• Prentice Hall 1999

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Contents

• Introduction to SCM
• The role of information systems and technology in
  SCM
• Managing the flow of materials across the SC
• Developing and maintaining SC relationships
• Cases in SCM
• Future challenges in SCM
• Sharing risks in interorganizational
  relationships
• Managing the Global SC
• The Greening of the SC
• Design for SCM
• Intelligent Information Systems

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Introduction

• The roots of environmentalism
• WWII, government regulation, public awareness
• A number of manufacturing firms
• HP, Dow Chemical, GM, Xerox, International Paper.
  
• There are several reasons for this necessary
  expediency.
• Government regulations are becoming increasingly
  harsh on polluters.
• Limited new landfill sites and filled up existing
  landfills
• Critical shortages of different types of raw
  material
• Factors having a major effect on the
  environmental performance of an organization.
• Design decisions
• Cost control
• Manufacturing planning and control
• Supply-based strategy

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• Two generic types of orientations
• Proactive versus reactive SC approaches
• Reactive approaches
• Proactive policies maximization-oriented
• Four specific areas with regard to the SC
• Supplier selection and evaluation
• Surplus and scrap disposition
• Carrier selection and transportation of hazardous
  materials
• Product design, packaging and labeling

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Proactive vs. Reactive
Materials Function Proactive Reactive
Supplier Selection and Evaluation Disclose and label material composition Consider long-term costs of doing business with supplier Reusable packaging and shipping materials Use suppliers who can show evidence of sustainable and well-managed sources of raw materials Require supplier participation on industry-wide environmental panels and organizations Environmental risk assessment Sustainable resource management Environmental issues not included as an evaluation criterion Dispose of packaging materials Sole reliance on EPA regulations
Surplus and Scrap Disposition Careful analysis of material impacts prior to use in new products Reclaim hazardous materials After the fact remedial actions to solve environmental disposition problems Dump hazardous waste, and use nonspecialists to take care of the problem
Carrier Selection and Transportation of Hazardous Materials Environmental audits of major carriers Extra protection on rail cars and trucks Reduction of dumping extra leftover hazardous material Relatively little attention paid to transportation selection, except when a spill occurs
Product Design, Packaging, and Labeling Cradle to grave life cycle analysis of materials used at the design stage Remanufacture Recycle corrugated Standardized, reusable containers Label plastic parts for later reuse End-of-life strategies not part of design process Dump products at end of life No recycling Nonreusable containers No plastic labeling
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Modeling the Supply Chain

• Jeremy F. Shapiro
• Professor of operations research and management
• The Sloan School of Management at Massachusetts
  Institute of Technology
• DUXBURY 2001

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Contents

• Introduction to SCM
• SCM, Integrated Planning, and Models
• Information Technology
• Modeling and Solution Methods
• Fundamentals of Optimization Models LP
• Fundamentals of Optimization Models MIP
• Unified Optimization Methodology for Operational
  Planning Problems
• SC Decision Databases
• Applications
• Strategic and Tactical SCP State-of-the-Art
  Modeling Applications
• Strategic and Tactical SCP Advanced Modeling
  Applications
• Integration of Financial and Physical SC
• Operational SCP
• Inventory Management
• The Future
• Organizational Adaptation of Optimization
  Modeling Systems

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Inventory Management

• 11.1 Inventory Theory Models
• 11.2 Incorporating Inventory Management Decisions
  in Strategic and Tactical SC Models
• 11.3 Inventory Management in Distribution SC
• Distribution Scheduling in a RL Company
• RL refers to SC networks where products
  distributed by a company to its customers are
  subsequently returned to the company.
• Two types of RL SC
• Stand alone rents reusable containers or
  automobiles
• Linked to a standard supply chain with a
  facility dedicated to warranty returns and
  repairs.

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Supply Chain Management Based on SAP Systems

• G. Knolmayer
• University of Bern, Institute of Information
  Systems, Information Engineering Group,
  Switzerland
• P. Mertens
• University of Erlangen-Nuremberg, Department of
  Information Systems I, Germany
• A.Zeier
• University of Erlangen-Nuremberg, Bavarian
  Information Systems Research Network (FORWIN),
  Germany
• Springer-Verlag Berlin Heidelberg New York 2002

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Contents

• Fundamentals of SCM
• Application systems in the individual business
  functions
• SAPs SCM system
• Recent developments in order and SCM based on SAP
  systems
• Case studies on SCM
• Internet resources for SCM

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Application systems in the individual business
functions

• 2.1. Engineering
• 2.2. Sales
• 2.3. Procurement
• 2.4. Production
• 2.5. Distribution
• 2.5. Service Management
• 2.7. Recycling and Disposal

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Recycling-Oriented Product Development

• Disposal and recycling throughout product
  development
• Save costs and provide competitive advantages.
• The main requirements to achieve recycling- and
  disposal-friendly designs
• Basic material compatibility
• Design for dismantling
• Other measures
• The identification of spare part
• Restriction of the volume of materials to be
  dumped
• A corrosion-resistant product design.
• A general issue
• Whether recycled parts are of an equal quality to
  new materials
• Whether any quality differences are relevant for
  their designated use

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IS for Recycling and Disposal

• An assembly-, service-, and disassembly-friendly
  product development.
• Environment information systems
• Recycling-oriented ERP systems
• Precondition information on the composition and
  dismantling of products
• Parts master data
• Recycling graphs
• Recycling product structures
• Disassembly plans
• Production and Recycling Planning and Control
  (PRPC)
• The extension for recycling-relevant aspects
• Requires many changes relative to conventional
  production planning and control
• Basic data
• Quantity planning
• Scheduling
• Consideration of uncertain events

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IS for Recycling and Disposal

• Information Systems for RL
• RL are often an exception-driven process.
• SAPs functionalities in several R/3 modules
• Recycling Administration (REA) function group
• Using existing master data and transition data
  from the MM and SD modules
• mySAP Environmental, Health Safety (EHS)
• Integrated with MM, LO, PM, HR
• Functions in the MM and PP modules
• Important properties for recycling in the master
  data
• Industry solutions for the process and automotive
  industries
• PP-PI, EHS component
• Asset Redeployment Management Systems (ARMS)
• Web-based applications using within the group and
  a global B2B exchange
• Add-ons to asset management modules of ERP
  systems.

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Reverse logistics system planning for recycling
electrical appliances and computers in Taiwan

• Resources, Conservation and Recycling 32 (2001)
  55-72
• Li-Hsing Shih
• Department of Resources Engineering, National
  Cheng Kung University, Tainan, Taiwan 701

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Introduction

• Products at their end-of-life (EOL) phases
• The scarcity of landfill space and the hazardous
  materials
• In Taiwan
• SHACRR by announced EPA in 1998
• 20 U.S. dollars of disposal fees for each product
  sales
• Many researches on reverse logistics planning for
  EOL consumer products disposition
• Mathematical programming methods
• This study
• Employs the MIP method to create an optimal
  collection and recycling system plan for EOL
  computers and home appliances
• Several scenarios for different take-back rates
  and operating conditions are simulated via the
  model.

EPA The Environmental Protection
Administration SHACRR Scrap Home Appliances and
Computers Recycling Regulation
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Current status of EOL computers and home
appliances disposition

• Four types of stakeholders in the EOL computers
  and home appliances disposition system
• Collecting points most of which are legitimate
  retailers
• Storage sites a buffer between collecting
  points and the disassembly/recycling plants
• Disassembly and recycling plants dismantle,
  disassemble, shred and classify the four major
  appliances or computers
• Secondary material market, final treatment and
  landfill

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RL
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A mixed integer programming model

• Constraints
• Flow conservations
• Capacity constraints
• Number limit of facilities

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Estimation of model parameters

• The estimation of some model parameters
• Amount of EOL appliances estimated based on
  their average lifetime and past domestic annual
  sales
• Fixed cost and operation cost obtained from
  several sites operating currently
• Revenue from selling reclaimed materials based
  on a field survey of similar reclaimed materials
• Material composition of the appliances from a
  thorough survey of Taiwanese manufacturers and
  the field data of the existing disassembly plants
• Capacity of the facility based on the design of
  the existing plants

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Conclusions

• The different scenarios for different take-back
  rates and operation conditions.
• A mixed integer programming model
• To determine the optimal system including the
  infrastructure design and reverse network flow
  operation.
• The difficulty of parameter estimation
• An example that solves for the optimal planning
  for EOL electrical products disposition in
  northern Taiwan

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What I will do

• Closed-loop supply chain
• Product Life cycle Model
• To reflect some characteristics of return process
• Input-output models for Life cycle analysis