Picture source : www.dlinkgreen.com
BY ALI HAJI VAHABZADEH AND ROSNAH BINTI MOHD YUSUFF
INDUSTRIAL ENGINEER – DECEMBER 2012; VOLUME 44; NUMBER 12
Short Summary: In the mid-1980s, most developed countries only paid attention to how to dispose of their waste properly. As environmental awareness has increased, consumers have paid more attention to whether the companies buy things from and get services from addressing waste and sustainability issues. That is why there are an increasing number of companies pay attention to reverse flows and green concepts within their logistics systems. Researchers Dale S. Rogers and Ronald S. Tibben-Lembke define reverse logistics as follows: “The process of planning, implementing and controlling the efficient, cost-effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing or creating value or proper disposal”. The combination of all factors results in the following definition for green reverse logistics:
Green Reverse Logistics is the process of managing returns, including different types of materials, and transportation from the point of consumption to the point of origin to minimize the destructive effects on environment.
To meet regulatory goals and enhance profitability, companies need to consider the costs of their reverse supply chain and the quality of the goods and components flowing through. A conceptual decision making mode based on the cost analysis and quality management methods can lessen the possibility that officials make wrong decisions that minimize returns. The four steps in term of finding the costs of reverse supply chain follow:
- Identifying the cost objects and activity types in each reverse logistics step based on the ABC method.
- Defining the different costs involved in each of the decision options available in reverse logistics.
- Categorizing the quality of the returned goods, components or materials.
- Conceptualizing the decision making process in reverse logistics
Reverse logistics already works within regulatory and environmental limits to control toxic chemicals and dispose of excess materials or products that cannot be repaired. Adding sustainability concepts for a green reverse logistics system can provide a business model that will focus on the integration between customers, investors, employees, political leaders, and industry alliances. The manufacturers and suppliers developing a sustainable reverse logistics network to minimize the cost of returns also will focus on designing reusable packaging and pallets, reducing unnecessary movements in operations and transportation, transportation that emits less carbon and is more flexible, transportation nodes that are more efficient, and using green materials for product design.
The decision making model provided here can help evaluate and implement the concept of cradle to cradle manufacturing. Making the right decision means limiting the destructive effects of environmental waste that fill landfills, curbing toxic gas emissions from unnecessary transportation, and not wasting time, space and money by storing unneeded scrap.
The full version of the article is available in IIE Laboratory. It is also readable online for IIE member through accessing the iienet.org website. Contact Maya (President of IIE BINUS University Chapter) at email@example.com for more information on the IIE membership.
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