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 efficient

product return.
 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 Nokia-
branded 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
 [4]
Recovery options

• Repairing
• Refurbishing
• Remanufacturing
• Cannibalizing
• Recycling
• Disposal
 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 C

TP

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. OSL
2. CPLEX

3. Dash
1. XPRESS-MP

4. MIPLIB
Genetic algorithm