The various stakeholders chosen for the process of reverse logistics are: 1. Customers – Customer will perform the task of customer returns. In retailing, returning is the task performed by customer. They give back the previously purchased merchandise to the retailers. While giving back these merchandise customer can claim for a cash refund, exchange of another item (identical or different) or a store
effective revere logistics information system and automotive reverse logistics network. Products returns and recycling products have randomness or uncertainty occurring of event, time, quantity and categories of items which causes great difficulties in prediction and management. For example damage conditions vary for different products, only through specific testing exact problem can be decided. Handling of returned product is also a pain point because different products need different transportation requirement. Finally, product recycling is uncertain, because in reverse logistics demands for re-use products are far away from ordinary markets’ maturity, there exists greater randomness and unpredictability.
Reverse Logistics: Economic impact of reverse logistic has been realized by most of the automotive companies. It is believed effective reverse logistics, remanufacturing, repair, and recycling could improve company’s value reclamation ( Andel,1997; Giuntini & Andel, 1995).Council of logistic management put together a formal definition of reverse logistics (Brito & Dekker, 2004). A broader definition of reverse logistics includes reuse of materials, recycling, substitution and disposal (Brito & Dekkar, 2004). Reverse logistics still carries some disadvantages such as high investment risks, complex structures and scattered locations. Nowadays customers are more aware about environment, reverse logistics could help companies build brand awareness and positively influence customers as disposable products are returned back to origin.
Once chemical cleaning is done parts are manually washed, grease and dirt is cleaned using ‘Green detergents’. Next step is surface recovery in which fissures and scratches are removed using grinding machine. Inspection using magnaflux is carried out in next step, each component is checked for remainder fissures and structural problems. Next activity is carried out at assembly station where new components are added in the recycled parts and then final product is then packed in a paperbox having lable ‘GKN Manugactured’. Conclusion of case: For GKN the first motivation to go for reverse logistics was legal issues but as they worked towards improving the logistics that revsulted in improvement in safety image of the company and market recognition and elimination of accidents occurred because of the use of irregular second hand components.
One of the definition stated that Supply chain management consist of planning and participating in the procurement and sourcing, conversion of all the activities of the management, as well as entirely logistics management activities. It is also important to include arrangement and cooperation channel partners, which can be suppliers, third-party service suppliers, contact man and final users. Shortly, Supply Chain Management take part of supply and demand management within and through organization. Other than that, Supply Chain Management can also defined as the procedure and participating in the procurement and sourcing, conversion, create demand and meet all of the activities of the management, and whole logistics management activities. In addition, Supply Chain Management is also includes arrangement and collaboration channel partners, which can be suppliers, third-party service suppliers, contact man and final users.
This is how the concept of Supply Chain Management (SCM) is born. Supply chain management was originally introduced in the early 1980s (Oliver and Webber, 1992) and since then it has achieved incredible attention. Supply chain management can be defined as the planning and control of materials and information flows as well as the logistics activities not only internally within a company but also externally between companies (Chen & Paulraj; 2004).A more prominent definition of Supply Chain Management is that of the council of supply chain management professionals (CSCMP), that defined Supply chain management as an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. It includes all of the logistics management activities, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, finance, and information technology (CSCMP,
Brito and Dekker (2002) suggests that while the reverse logistics function can be environmental approach, the most of private parties driver of reverse logistics is economics and legal. Designed by the profitable or regulatory requirement, the performance metrics of reverse logistics may deviate from the ideal environmental practices that are promoted by the organization. Cantor et al. (2012) demonstrates that the employees may not perceive that the organization cares about the environment when the reward for the environmental behavior is not sufficient. In the same mechanism, if the common performance metrics of reverse logistics is not consistent with the environmental performance or it is not sufficient for the employees to make decision for the environment, the individual employees may perceive that the environmental practices is not appreciated by the organization even though it is promoted.
Introduction to Enterprise Resource Planning (ERP) Supply chain management (SCM) is the overlook of the company’s information, materials needed in the process from supplier to manufacturer to wholesaler to retailer and lastly to the consumer. In addition, supply chain management’s function is to coordinate and integrate the flows within or among the companies. An effective supply chain management can help the company to reduce the inventory; it means that if the company applied supply chain management effectively, then the company can make sure their products are available when they needed. There are three main floes in supply chain management flows which are product flow, information flow, and finances flow. Product flow means the goods move
Level 5: Companies have production network with integrated sourcing, planning, production, and distribution. The companies which operate on level 3 through 5 of this logistic Chain, go for third-party logistics. The rationale of the companies behind going for the third party logistics can be explained by interpretation of definition given as follows: “ Third-party logistics involves the use of external companies to perform logistics functions that have traditionally been performed within an organization. The functions performed by the third party can encompass the entire logistics process or selected activities within that process.” (Skjoett-Larsen, 2000) Logistics for any organization has become a non-core activity. With the promotion of Theory of Core Competency by ( Prahalad & Hamel, 1990), companies have started to remove all the noncore activities from their operations to increase their efficiencies.
Handfield and Nichols define Supply Chain Management to be “…the integration of these activities [activities associated with the flow an transformation of goods from the raw material stage, through to the end use, as well as the associated information flows] through improved supply chain relationships, to achieve a sustainable competitive advantage.” Essentially the supply chain includes internal and external process and information flows. In general, a company or a business unit has control only over the internal processes and the external processes can only be influenced to certain extent. In this analysis, we concentrate only on internal processes and inter-organization information flows. The methodology developed is still applicable for an integrated supply chain but requires significant work to achieve consensus across all the nodes that are being integrated to agree upon the results. We divide the internal supply chain by product life cycle (only the SCM categories are shown in below figure).