Strategic network design for reverse logistics and remanufacturing using new and old product modules

Establishment of reverse logistics (RL) networks for various original equipment manufacturers (OEM's) is gaining significant importance. Various green legislations are forcing OEMs to take back their used, end-of-lease or end-of-life products, or products under warranty to minimize wastes and conserve resources. Therefore OEMs have turned to a better design of their products for maximum reuse and recycling and to retrieve back the used products through a network for reuse, remanufacture, recycle or disposal, so that maximum value can be achieved from their used products. However, designing of network points and assigning capacities to them depend not only on the volume of returned products but also on the demand for remanufactured products and the parts of used products. If OEMs are not able to add value to the used product, there would be no incentive to design a complex network. In this paper, a mathematical model for the design of a RL network is proposed. It is assumed that the returned products need to be consolidated in the warehouse before they are sent to reprocessing centres for inspection and dismantling. Dismantled parts are sent for remanufacturing or to the secondary market as spare parts. Recycling and disposal of these modules are also considered in the model. The use of the model is shown through its application in a numerical example.

[1]  Augusto Q. Novais,et al.  An optimization model for the design of a capacitated multi-product reverse logistics network with uncertainty , 2007, Eur. J. Oper. Res..

[2]  S. Mitra.  Revenue management for remanufactured products , 2007 .

[3]  Carsten Nagel,et al.  Caught between ecology and economy: end-of-life aspects of environmentally conscious manufacturing , 1999 .

[4]  Carsten Franke,et al.  Remanufacturing of mobile phones—capacity, program and facility adaptation planning , 2006 .

[5]  Sami Kara,et al.  Simulation modelling of reverse logistics networks , 2007 .

[6]  Paul R. Murphy,et al.  MANAGEMENT OF ENVIRONMENTAL ISSUES IN LOGISTICS: CURRENT STATUS AND FUTURE POTENTIAL , 1994 .

[7]  Donald J. Bowersox,et al.  Logistical Management: The Integrated Supply Chain Process , 1974 .

[8]  M. Grazia Speranza,et al.  New Trends in Distribution Logistics , 2000 .

[9]  Aleda V. Roth,et al.  Production, Manufacturing and Logistics Competitive advantage through take-back of used products , 2005 .

[10]  Matthew J. Realff,et al.  Assessing performance and uncertainty in developing carpet reverse logistics systems , 2007, Comput. Oper. Res..

[11]  Dale S. Rogers,et al.  Differences between forward and reverse logistics in a retail environment , 2002 .

[12]  Patrick Beullens,et al.  Reverse logistics in effective recovery of products from waste materials , 2004 .

[13]  Nathalie Bostel,et al.  A facility location model for logistics systems including reverse flows: The case of remanufacturing activities , 2007, Comput. Oper. Res..

[14]  Augusto Q. Novais,et al.  A warehouse-based design model for reverse logistics , 2006, J. Oper. Res. Soc..

[15]  Ludo Gelders,et al.  EOQ type formulations for controlling repairable inventories , 1992 .

[16]  Jacqueline M. Bloemhof-Ruwaard,et al.  THE IMPACT OF PRODUCT RECOVERY ON LOGISTICS NETWORK DESIGN , 2001 .

[17]  Hokey Min,et al.  The spatial and temporal consolidation of returned products in a closed-loop supply chain network , 2006, Comput. Ind. Eng..

[18]  M. Fleischmann,et al.  Reviewing Distribution Issues in Reverse Logistics , 1999 .

[19]  C. Carter,et al.  REVERSE LOGISTICS: A REVIEW OF THE LITERATURE AND FRAMEWORK FOR FUTURE INVESTIGATION , 1998 .

[20]  Terrance Pohlen,et al.  Reverse Logistics in Plastics Recycling , 1992 .

[21]  Askiner Gungor,et al.  Issues in environmentally conscious manufacturing and product recovery: a survey , 1999 .

[22]  T. Spengler,et al.  Impact of WEEE‐directive on reverse logistics in Germany , 2005 .

[23]  Surendra M. Gupta,et al.  Identification of potential recovery facilities for designing a reverse supply chain network using physical programming , 2004, SPIE Optics East.

[24]  Jacqueline M. Bloemhof-Ruwaard,et al.  Extended Design Principles for Closed Loop Supply Chains: Optimising Economic, Logistic and Environmental Performance , 2002 .

[25]  T. Spengler,et al.  Environmental integrated production and recycling management , 1997 .

[26]  Vaidyanathan Jayaraman,et al.  The effect of lead time variation on the performance of disassembly release mechanisms , 1999 .

[27]  Matthew J. Realff,et al.  Robust reverse production system design for carpet recycling , 2004 .

[28]  Chwen Sheu,et al.  A model for reverse logistics entry by third-party providers , 2002 .

[29]  Luk N. Van Wassenhove,et al.  Closed - Loop Supply Chain Models with Product Remanufacturing , 2004, Manag. Sci..

[30]  Erwin van der Laan,et al.  Quantitative models for reverse logistics: A review , 1997 .

[31]  Gerald W. Evans,et al.  A bi-objective reverse logistics network analysis for post-sale service , 2008, Comput. Oper. Res..

[32]  D. C. Whybark,et al.  From garbage to goods: Successful remanufacturing systems and skills , 2000 .

[33]  Simme Douwe P. Flapper,et al.  A facility location allocation model for reusing carpet materials , 1999 .

[34]  Marianne Jahre.  Household waste collection as a reverse channel , 1995 .

[35]  Li-Hsing Shih,et al.  Reverse logistics system planning for recycling electrical appliances and computers in Taiwan , 2001 .

[36]  A. Lambert.  Determining optimum disassembly sequences in electronic equipment , 2002 .

[37]  Bongju Jeong,et al.  Supply planning model for remanufacturing system in reverse logistics environment , 2006, Comput. Ind. Eng..

[38]  Chad W. Autry,et al.  REVERSE LOGISTICS: THE RELATIONSHIP BETWEEN RESOURCE COMMITMENT AND PROGRAM PERFORMANCE , 2001 .

[39]  Peter Fredriksson,et al.  Mechanisms and Rationales for the Coordination of a Modular Assembly System: The Case of Volvo Cars , 2006 .

[40]  Shaligram Pokharel,et al.  Perception on information and communication technology perspectives in logistics: A study of transportation and warehouses sectors in Singapore , 2005, J. Enterp. Inf. Manag..

[41]  R. Piplani,et al.  An approach to design reverse logistics networks for product recovery , 2004, 2004 IEEE International Engineering Management Conference (IEEE Cat. No.04CH37574).

[42]  Hark Hwang,et al.  An optimal ordering and recovery policy for reusable items , 2002 .

[43]  Otto Rentz,et al.  Modeling reverse logistic tasks within closed-loop supply chains: An example from the automotive industry , 2006, Eur. J. Oper. Res..

[44]  Matthew J. Realff,et al.  Strategic design of reverse production systems , 2000 .

[45]  Prem Vrat,et al.  A goal programming model for paper recycling system , 2008 .

[46]  Surendra M. Gupta,et al.  Disassembly sequence planning for products with defective parts in product recovery , 1998 .

[47]  Surendra M. Gupta,et al.  Value analysis of disposal strategies for automobiles , 1997 .

[48]  Karl T. Ulrich,et al.  Fundamentals of Product Modularity , 1994 .

[49]  Jan Dethloff,et al.  Vehicle routing and reverse logistics: The vehicle routing problem with simultaneous delivery and pick-up , 2001, OR Spectr..

[50]  Manoj Kumar Tiwari,et al.  Analyzing alternatives in reverse logistics for end-of-life computers: ANP and balanced scorecard approach , 2005, Comput. Ind. Eng..

[51]  Mohamed Mohamed Naim,et al.  Soft systems analysis of reverse logistics battery recycling in China , 2007 .

[52]  Rommert Dekker,et al.  A two-level network for recycling sand: A case study , 1998, Eur. J. Oper. Res..

[53]  Aart van Harten,et al.  Business case Roteb: recovery strategies for monitors , 1999 .

[54]  Ronald S. Tibben-Lembke.  Life after death: reverse logistics and the product life cycle , 2002 .

[55]  Shad Dowlatshahi,et al.  Developing a Theory of Reverse Logistics , 2000, Interfaces.

[56]  Carol Prahinski,et al.  Empirical research opportunities in reverse supply chains , 2006 .

[57]  Ruud H. Teunter,et al.  Production , Manufacturing and Logistics The newsboy problem with resalable returns : A single period model and case study , 2005 .

[58]  Mitsuo Gen,et al.  AN INVENTORY POLICY FOR RECYCLING SYSTEM , 2005 .

[59]  Ronald S. Tibben-Lembke,et al.  Going Backwards: Reverse Logistics Trends and Practices , 1999 .

[60]  Benita M. Beamon,et al.  Supply-chain network configuration for product recovery , 2004 .

[61]  Tauno Kekäle,et al.  The influence of modularity and industry clockspeed on reverse logistics strategy: Implications for the purchasing function , 2005 .

[62]  Kamlesh Mathur,et al.  Reverse logistics: simultaneous design of delivery routes and returns strategies , 2007, Comput. Oper. Res..

[63]  Surendra M. Gupta,et al.  Strategic planning of a reverse supply chain network , 2005 .

[64]  Erik Rolland,et al.  The design of reverse distribution networks: Models and solution procedures , 2003, Eur. J. Oper. Res..

[65]  Der-Horng Lee,et al.  A HEURISTIC APPROACH TO LOGISTICS NETWORK DESIGN FOR END-OF-LEASE COMPUTER PRODUCTS RECOVERY , 2008 .

[66]  P. Murphy.  A PRELIMINARY STUDY OF TRANSPORTATION AND WAREHOUSING ASPECTS OF REVERSE DISTRIBUTION , 1986 .

[67]  Hokey Min,et al.  A genetic algorithm approach to developing the multi-echelon reverse logistics network for product returns , 2006 .

[68]  René B.M. de Koster Marisa P. de Brito,et al.  Return handling: an exploratory study with nine retailer warehouses , 2002 .

[69]  P. C. Schuur,et al.  Business case Océ: Reverse logistic network re-design for copiers , 1999 .

[70]  Vedat Verter,et al.  Retail-collection network design under deposit-refund , 2007, Comput. Oper. Res..

[71]  V D R Guide,et al.  A closed-loop logistics model for remanufacturing , 1999, J. Oper. Res. Soc..

[72]  Hak-Soo Mok,et al.  Disassemblability of Mechanical Parts in Automobile for Recycling of Materials , 1996 .

[73]  Gordon C.C. Yang,et al.  Urban waste recycling in Taiwan , 1995 .

[74]  Leo Kroon,et al.  Returnable containers: an example of reverse logistics , 1995 .

[75]  Bryan Reimer,et al.  Truck sizing models for recyclables pick-up , 2006, Comput. Ind. Eng..

[76]  S. Dowlatshahi,et al.  A strategic framework for the design and implementation of remanufacturing operations in reverse logistics , 2005 .

[77]  K. Inderfurth,et al.  How to set the holding cost rates in average cost inventory models with reverse logistics , 2000 .