Transcript PowerPoint Sunusu

STRATEGIC ISSUES
in PRODUCT
RECOVERY
MANAGEMENT:
THEORY and PRACTICE
Ali Koç
July 17, 2015
Outline
Definitions & Concepts
Theoretical & Practical Implications
Discussion on literature
Conclusion
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Product Recovery Management
(PRM)
 Implementation of reverse
manufacturing for economical and
ecological reasons in the firm base
 These manuf. environments are called
recoverable manufacturing environment.
 Recoverable manufacturing (RM) vs.
traditional manufacturing (TM)
 Two aspects:
– Logistics (Reverse Logistics)
– Manufacturing (Reverse Manufacturing)
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Product Recovery Options
(Reverse Manufacturing)
Service
2
Parts
fabrication
Raw materials
6
Modules
assembly
5
Product
assembly
4
3
Users
1
Thierry et al.(1995)
7,8
1. Direct reuse/resale
2. Repair
3. Refurbishing
Distribution
4. Remanufacturing
5. Cannibalization
6. Recycling
7. Incineration
8. Landfilling
Why to shift from TM to RM
attempt of green corporate image
– customer driven
government legislation
– government driven
the profitability of product recovery
– firm driven
Gungor and Gupta (1999)
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Why to shift from TM to RM
Interaction between government, users, producers and
distributors (Gungor and Gupta 1999)
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Companies practicing PRM
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 Delphi
 DuPont
 General
Motors
 HewlettPackard
 Storage Tek
 TRW
Union Carbide
Xerox
Office Plan Inc.
Miller SQA
Deere and
Company
 IBM Europe
 Digital Europe
Guide et al. (2000)
Dowlatshahi (2000)
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Fleischmann (1997)
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Theoretical & Practical
Implications
Difficulties in Recoverable
Manufacturing Environment
Streams of Researches in the
Literature
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Complications of PRM
Uncertainty in the quality and
composition of the returned product
Uncertainty in timing and quantity of
returns
Uncertainty in the demand of the
reprocessed products, parts and
materials
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Complications of PRM
Balancing returns with demand
Material recovery uncertainty
Reverse distribution
Uncertainty in the processing times
Thierry et al.(1995)
Fleischmann (1997)
Gungor and Gupta (1999)
Guide et al. (1999)
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Lee et al. (2001)
Guide (2000)
Guide et al. (2000)
Dowlatshahi (2000)
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Researches in the Literature
 Manufacturing Aspect
 Logistics Aspect
– Distribution
• Separate Modeling
• Hybrid Modeling
– Inventory & Production Control
• Deterministic Models
• Stochastic Models
– Repair Systems
– Product Recovery Systems
• Periodic Review
• Continuous Review
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Reverse Distribution
Issues to consider
– Who will perform the reverse distribution
(original actors or secondary units)
– Which functions to perform and where
(where to perform collecting, testing,
sorting and transporting)
– The degree of integration of the forward
and reverse distribution channel (The
main headache)
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Reverse Distribution
Reverse distribution (Fleischman at al 1997)
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Reverse Distribution
Separate Modeling
 Mirchandani and Francis (1989) considers
modified version of location models
 Kroon and Vrijens (1995) analyze a return
logistics system for returnable containers
 Spengler at al. (1997) considers the recycle
of industrial products in German industry,
using mixed-integer linear programming
model.
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Caruso et al. (1993)
Model a system consisting of
collection, transportation, incineration,
composting, recycling and disposal
Use multi-objective location allocation
model and some heuristics
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Reverse Distribution
Hybrid Modeling
Del Castillo and Cochran (1996)
analyze a system in which products
are delivered in reusable containers.
They consider bringing the containers
back to the sites.
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Production & Inventory Control
Inventory control in PRM (Fleischman at al. 1997)
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Production & Inventory Control
Additional difficulties (to TM)
– as a consequence of the return flow
monotonicity is lost between two replenishments
(challenging)
– two alternatives for meeting the demand
(remanufactured ones or new ones) imposes
another set of decisions to be taken in to
account
– distinguishing the recoverable inventory (core
inventory) and the serviceable inventory leads to
a two-echelon inventory system.
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Production & Inventory Control
Deterministic Models
– modified version of EOQ
– some portion of the returned products
is disposed
– net demand equals to demand minus
returns
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Deterministic Models
 Richter (1996) determines dispose rate by
considering the setup costs for manufacturing (n),
and remanufacturing (m), and the time horizon
 Minner and Kleber (2001) find optimal production
and remanufacturing policies for deterministic and
dynamic demands and returns when backlogging is
not allowed
 Kleber at al. (2002) determines the optimum
production, remanufacturing and disposal policy in
a deterministic env. They consider separate
inventory for serviceable and recoverable. They
consider m different remanufacturing operation.
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Stochastic Models
Repair Systems
 The question is determining the number
of spares to guarantee a certain service
level
 There are two peculiarities
– Every return triggers a demand. Hence, inventory is no
longer increased upon return
– total number of items in the system is fixed
 There are excellent reviews, one of
which is Cho and Parlar (1991)
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Stochastic Models
Product Recovery Systems
 Generally returns and demands are
independent
 Two types of studies
– Firm studies
• Periodic Review
• Continuous Review
– Industry studies
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Industry Studies
 Klausner and Hendrickson (2000) and
Nakashima et al. (2002) considers a
remanufacturing world.
– Whole products either in serviceable inventory
or recoverable inventory.
– No cost for the recoverable inventories.
– Optimize the dispose rate of the products so that
total cost of serviceable inventory holding,
manufacturing and remanufacturing,
backlogging and disposing is minimized
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Firm Studies (Periodic Review)
 Kelle and Silver (1989) analyzes the
following
 Some fraction of the demand is returned back
after a lead-time (dependent demand and
return).
 Minimize inventory-holding, backorder and
fixed cost.
 Formulate an integer program considering the
net demand in a period (demand minus return).
 They do not consider distinctly the serviceable
and recoverable inventory.
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Inderfurth (1997)
 Consider the same model as Kelle and Silver (1989) with
different serviceable and recoverable inventory.
 Shows that the difficulty arises when order and recovery
lead-times are not identical due to growing
dimensionality of underlying Markov chain.
 Also studies an optimum inventory control under push
strategy.
 Shows that if the order and recovery lead-times are
identical, two-parameter order-up-to and dispose-downto policy is optimal. But if the lead-times are not identical,
the problem gets complicated
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Inderfurth at al. (2001)
 Consider a recoverable manufacturing
environment that has multiple
remanufacturing options.
 A product upon arrival is allocated to
anyone of remanufacturing facilities.
 There is no manufacturing and
outsourcing. They show that under
linear allocation and balancing
assumptions, (nM, U) policy is optimal,
and they optimize the parameters of this
policy.
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Continuous Review Policies
 Objective is to find the optimal static control
policies to minimize the long run average cost.
 van der Laan at al. (1996) compares three different
control strategy (sp, Qp, sd, N), (sp, Qp, sd), and (sp, Qp, N)
under the independent demand and return setting using
Markov chain.
 N is the capacity of the remanufacturing facility that
forces no more than N item being remanufactured by
assuring that the excess returns are disposed again.
 In some cases the second and third policy beat each
other
 In all cases first policy beats the rest.
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van der Laan and Salomon (1997)
van der Laan et al. (1999)
 Compare the pull and push production
environments with control policies similar to
the (sp, Qp, sd, N)
 Their time horizon is the life time of a product.
 Show that parameters are not robust against
the different time periods in a product life.
 Show that pull control strategy is favorable to
the push strategy if the inventory holding cost
of recoverable items is greater than the holding
cost of serviceable items (which is the case in
reality).
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Kiesmuller and van der Laan (2001)
 Consider dependent return and demand case
 They also considers a finite time horizon and
finite recovery lead time.
 Shortfall is that they consider that recovery
lead time (total of purchasing, transportation
and remanufacturing lead-times) is equal to
order lead-time of new items
 So they consider single inventory, only for
serviceable.
 They try to find the optimal dispose rate in
order to minimize the holding, backorder,
procurement, transportation, disposal and
remanufacturing costs.
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Conclusion
 PRM is driven by customers,
government and firms
 New research area, literature is newly
forming
 Firms report the profitability; so,
promising
 Challenging in every aspect, both
manufacturing and logistics
 Problems of TM are more than
duplicated when we shift to RM
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THANK YOU
Q&A