1. Reverse Supply Chain Management
Dr. Peeyush Mehta
Vipul Mathur

2. Definition of RSCM
A set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize system-wide costs while satisfying service level requirements

3. Relevance of RSCM
The amount of product returns can be very high, with some industries experiencing returns at over 50% of sales.
Sales opportunities in secondary and global markets have increased revenue generation from previously discarded products.
End-of-life take-back laws proliferated in foreign countries requires businesses to effectively manage the entire life-cycle of the product.
Consumers have successfully pressured businesses to take responsibility for the disposal of their products that contain hazardous waste

4. Process steps in RSCM Acquisition of products from customers
Reverse logistics: Process of retrieving the product from consumer for the purposes of capturing value or proper disposal
Inspection & disposition
Reconditioning
Distribution & sales

5. Process

6. Examples Printing industry: Repurchase of old edition, un-sold books.
Computer industry: Resale due to fast moving technology
Automobiles: Resale due to new models availability e.g. Maruti True Value scheme
Electronic industry: Mobile phones, televisions etc. repurchased to recover electronic parts

7. Time value of product returns
Marginal Value of Time (MVT)
The loss in value per unit of time spent awaiting completion of the recovery process
MVT (%)= Decrease in value of product
Time
Example: Time sensitive consumer electronics products such as PCs can lose value at rates in excess of 1% per week, and the rate increases as the product nears the end of its life cycle

8. Shrinking pipeline for product returns

9. RSCM decisions
Efficient RSCM: A supply chain designed to deliver product at low cost
Best for Functional products
Suitable for products with High MVT
Responsive RSCM: A supply chain designed for speed of response
Best for Innovative products
Suitable for products with Low MVT

10. Efficient RSCM: Centralized model

11. Responsive RSCM: Decentralized model
* evaluation of products at retailer or reseller

12. Trade offs Efficient RSCM Responsive RSCM
Designed for economies of scale–both in processing and transport of product at the expense of long delays
Suitable for low MVT
Responsive RSCM
Improve asset recovery by reducing time- Preponement
Issues: Technical feasibility; cooperation between manufactures and resellers.
Suitable for high MVT