Jo van Nunen

Quantitative models for reverse logistics: A review

Abstract This article surveys the recently emerged field of reverse logistics. The management of return flows induced by the various forms of reuse of products and materials in industrial production processes has received growing attention throughout this decade. Many authors have proposed quantitative models taking those changes in the logistics environment into account. However, no general framework has been suggested yet. Therefore the time seems right for a systematic overview of the issues arising in the context of reverse logistics. In this paper we subdivide the field into three main areas, namely distribution planning, inventory control, and production planning. For each of these we discuss the implications of the emerging reuse efforts, review the mathematical models proposed in the literature, and point out the areas in need of further research. Special attention is paid to differences and/or similarities with classical ‘forward’ logistics methods.

Strategic Issues in Product Recovery Management

textabstractThis article examines strategic production and operations management issues in product recovery management (PRM). PRM encompasses the management of all used and discarded products, components, and materials for which a manufacturing company is legally, contractually, or otherwise responsible. The objective of PRM is to recover as much of the economic (and ecological) value of used and discarded products, components, and materials as reasonably possible, thereby reducing the ultimate quantities of waste to a minimum. This article also discusses the relevance of PRM to durable products manufacturers. It contains a categorization of PRM decisions. A case study based on the PRM system of a multinational copier manufacturer is presented to illustrate a set of specific production and operations management issues. The experiences of two other pro-active manufacturers (BMW and IBM) are also discussed

E-fulfillment and multi-channel distribution - A review

This review addresses the specific supply chain management issues of Internet fulfillment in a multi-channel environment. It provides a systematic overview of managerial planning tasks and reviews corresponding quantitative models. In this way, we aim to enhance the understanding of multi-channel e-fulfillment and to identify gaps between relevant managerial issues and academic literature, thereby indicating directions for future research. One of the recurrent patterns in today’s e-commerce operations is the combination of ‘bricks-and-clicks’, the integration of e-fulfillment into a portfolio of multiple alternative distribution channels. From a supply chain management perspective, multi-channel distribution provides opportunities for serving different customer segments, creating synergies, and exploiting economies of scale. However, in order to successfully exploit these opportunities companies need to master novel challenges. In particular, the design of a multi-channel distribution system requires a constant trade-off between process integration and separation across multiple channels. In addition, sales and operations decisions are ever more tightly intertwined as delivery and after-sales services are becoming key components of the product offering.

Integrating Closed-Loop Supply Chains and Spare-Parts Management at IBM

IBM is among the pioneers recognizing the benefits of closed-loop supply chains that integrate product returns into business operations. We worked on a project exploiting product returns as a source of spare parts. Key decisions concern what recovery opportunities to use, the channel design, and coordinating alternative supply sources. Our analytic inventory-control model and a simulation model showed that procurement-cost savings largely outweigh reverse logistics costs and that information management is essential. These findings provide a basis for significantly expanding the usage of the novel parts supply source, thereby cutting procurement costs.

E-Enabled Closed-Loop Supply Chains

Information and Communication Technology can help companies realize new innovative business opportunities in the area of closed-loop supply chains. This article examines closed-loop supply chains from three perspectives: processes, customers, and products. Exploiting the possibilities of closed-loop supply chains involves handling uncertainties by providing adequate information. Information on recovery options for a product, product preferences of the customer, and the state of the product can be used to reduce uncertainty. Data that is retrieved from the closed-loop supply chain by new technologies can be transformed into management information in a systematic way. This article presents a framework to address uncertainty reduction strategies.

Reviewing Distribution Issues in Reverse Logistics

Growing environmental concern has called much attention to industrial recovery of used products and materials. Driven by customer expectations and legislative regulation, manufacturers are held responsible to an increasing extent for the entire lifecycle of their products. From a logistics perspective, take-back and recovery of used products leads to additional goods flows from the users back to the sphere of producers. “Reverse Logistics” addresses the management of these flows opposite to the conventional supply chain flows. In this paper we consider Reverse Logistics from a distribution management perspective. We review major issues and concepts and discuss upcoming decision problems, paying special attention to logistics network design. Moreover, we point out both specific characteristics of Reverse Logistics and parallels with traditional logistics contexts. We illustrate our analysis with a number of examples based on recent case studies.

Reverse Logistics — Capturing Value in the Extended Supply Chain

Product flows in today’s supply chains do not end once they have reached the customer. Many products lead a second and even third or fourth life after having accomplished their original task at their first customer. Consequently, a product may generate revenues multiple times, rather than a single time. Capturing this value requires a broadening of the supply chain perspective to include new processes, known as ‘reverse logistics’, as well as multiple interrelated usage cycles, linked by specific market interfaces. Coordinating the successive product uses is key to maximizing the value generated. In this chapter, we review the field of reverse logistics. We discuss its opportunities and its challenges and indicate potential ways for companies to master them. We highlight what makes reverse logistics different from ‘conventional’ supply chain processes, but also point out analogies, and explain how both views can be integrated into an extended supply chain concept. We illustrate our discussion with examples of reverse logistics practice at IBM.

A DSS for capacity planning of aircraft maintenance personnel

textabstractIn this paper we describe a Decision Support System (DSS) that has been developed for the aircraft maintenance department of the Dutch national airline company at the main airport in the Netherlands. The aircraft maintenance department is responsible for carrying out the regular short inspections of aircraft between their arrival at and their consecutive departure from the airport. The main resource of the aircraft maintenance department is its workforce. The DSS that has been developed can be used to support the management of the maintenance department in solving several capacity planning problems related to the size and the composition of the workforce. In this paper we give a description of the capabilities of the DSS. Furthermore, we describe the solution technique that is applied within the DSS for determining the required size and composition of the workforce.

An explanatory study on electronic commerce for reverse logistics

E-commerce for reverse logistics is an area of web applications that has been active and progressing aggressively, especially in the US, though it has not been explicitly recognised until now. It has given reverse logistics in general and especially remanufacturing of parts and re-use of surplus goods an important stimulus. However, existing E-commerce models are rather restricted and represent simply the migration of conventionally practices over the Web.

Spare Parts Logistics and Installed Base Information

Many of the challenges in spare parts logistics emerge due to the combination of large service networks, and sporadic/slow-moving demand. Customer heterogeneity and stringent service deadlines entail further challenges. Meanwhile, high revenue rates in service operations motivate companies to invest and optimize the service logistics function. An important aspect of the spare parts logistics function is its ability to support customer-specific requirements with respect to service deadlines. To support customer specific operations, many companies are actively maintaining and utilizing installed base data during forecasting, planning and execution stages. In this paper, we highlight the potential economic value of installed base data for spare parts logistics. We also discuss various data quality issues that are associated with the use of installed base data and show that planning performance depends on the quality dimensions.