Industrial Engineering

Greening your reverse logistic

reverse logistics

Picture source: logistics4students.blogspot.com

BY ALI HAJI VAHABZADEH  and ROSNAH BINTI MOHD YUSUFF

INDUSTRIAL ENGINEER – VOLUME 44, NUMBER 12

 Decision-making model can help organizations recapture value.

Green reverse logistic 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.

Such reverse supply chains concentrate on restoring continuous cycles of biological nutrients and technical assets for long-term positive effects on profitability, the environment and human health. International certification standards such as ISO 14000 also have incorporated environmental concerns. Manufacturers are also looking to reverse logistics because such practice can help businesses adhere to new rules that make them responsible for products after they have been sold to customers, and then disposed.

In case when such practices lose money, companies in some cases have adopted remanufacturing to regain the value of products and assemblies. Improving the flow of products in various recycling and remanufacturing channels eliminates wasted energy and recovers raw materials. In applying this practice, operation research modeling has been at the forefront of many reverse logistics models. Researchers also have employed several techniques in multiple attribute decision-making modeling (MADM) such as AHP, fuzzy-AHP and fuzzy-TOPSIS. In most of literature, researchers have focused more on the relations between forward supply chain management and the concept of green and sustainability.

To find out the activities cost, the activity-based costing (ABC) method can identify the different types of cost elements in various steps of reverse logistics process. There are four (4) steps involved in this methodology as follow:

  1. Identifying the cost objects and activity types in each reverse logistics step based on the ABC method.
  2. Defining the different costs involved in each of the decision options available in reverse logistics.
  3. Categorizing the quality of the returned goods, components or materials.
  4. Conceptualizing the decision-making process in reverse logistics.