Reverse SC Network Design P.Chandiran. Options before the organisation Use your existing forward distribution network for collection, storage, transportation.

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Presentation transcript:

Reverse SC Network Design P.Chandiran

Options before the organisation Use your existing forward distribution network for collection, storage, transportation and disposal/remanufacturing/recycling. Design a new reverse SC network separately for returned products Outsource a 3PL for managing returns and disposal Industry wide collection network in the case of returned products of same type(batteries, paper,PET bottles, Beer bottles)

Network design also depends upon type of products Some categories like Pharma products, the returned products should not mix with new products. So we need to have separate network In Some products, the structure, nature and properties change during the usage and hence it is not possible to collect by existing channel(eg.Paper, plastic products, ) Some products has long PLC Some have short PLC

Marginal Value of time of a returned product Marginal value of time: the loss in value per unit of time spent awaiting completion of the recovery process High MVT: PCs can lose value at rates of in excess of 1% per week, Cell phones, Low MVT: Returned value is low but the rate of decrease of value is low-Durables, Power tools, motors, Batteries

Network design also depend on MVT of products Efficient ReverseSupply Chain Responsive reverse supply chain Low MVT product MatchNo Match High MTV product No MatchMatch

Efficient Reverse SC Network- Centralized model Product Returns Retailers/Dealers Centralized Evaluation and Test facility Scrap Remanufacture Parts recovery Re-stock

Efficient Network Collection only and no inspection Delays are more Economies in transportation, processing, inspection and storage At the centralized facility, decision should be made regarding fate of the collected product More suitable for stable, long PLC and low MVT products

Responsive Reverse SC Network Product Returns Retailers/Dealers Centralized Evaluation and Test facility Remanufacture Parts recovery Restock Scrap Inspection and Testing

Responsive network Inspection and testing at decentralized level Unwanted stuff thrown at the collection stage itself Faster transportation with less lot size Money value decrease very fast. Preponement is the strategy Preponemnt save the value of collected products by taking decisions at the earliest

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