Business case Océ: Reverse logistic network re-design for copiers

Abstract

The introduction of extended producer responsibility forces Original Equipment Manufacturers to set up a logistic network for take back, processing and recovery of discarded products. In this paper, we discuss a business case study carried out at Océ, a copier firm in Venlo (NL). It concerns the installment of remanufacturing processes. There is a choice from two locations in Venlo (NL) and one in Prague (Czech Republic), where assignments are subjected to managerial constraints. The study is meant to verify whether the strategic decision of Océ to move remanufacturing activities to the Czech Republic is also economically feasible. We limit ourselves to an optimisation of the HV02-machine network. We follow our general approach, in which we first determine how return products are processed (recovery strategy) and subsequently optimise the reverse logistic network design. We optimise on total operational costs over all possibilities and also compare three pregiven managerial solutions (=network designs) with a Mixed Integer Linear Programming model. Differences in economic costs appear to be very small, hence installing recovery activities in Prague for the HV02-machine must be well motivated from a strategic point of view. Moreover, we argue that besides cost minimisation, Océ should include performance indicators, such as JIT, reliability, in logistic optimisation to support its quality oriented business strategy. In addition, we discuss aspects regarding specific modelling elements in this case situation, the definition of cost functions, the possibility of optimising the forward and reverse logistic network and the use of LP-versus MILP-models in this kind of situations.

An Hybrid Discrete Particle Swarm Optimization Algorithm For Solving A Sustainable Remanufacturing Suply Chain Problem

“…Regarding remanufacturing location models, [22] described a small reverse logistics network for the returns, processing, and recovery of discarded copiers. They presented a mixed integer linear programming (MILP) model based on a multi-level uncapacitated warehouse location model.…”

Combinatorial optimization and Green Logistics

“…Most of the models developed in this field are similar to the traditional location problems, in particular location-allocation models (see Kroon and Vrijens 1995;Ammons et al 1999;Spengler et al 1997;Marìn and Pelegrìn 1998;Jayaraman et al 1999;Krikke et al 1999Krikke et al , 2001Fleischmann et al 2000). In most of the models, transportation and processing costs were minimized while the environmental costs associated with the designed network were often neglected.…”

A Manufacturing/Remanufacturing System with the Consideration of Required Quality of End-of-used Products

“…Teunter (1998) has offered a model, where not all items can be remanufactured, but this model assumed a known return rate. Krikke et al (1999) also acknowledge variability in returned product quality, but their MILP formulation of a reverse logistics network uses a constant unit cost of remanufacturing. Jayaraman et al (1999) and Majumder and Groenevelt (2001) also model unit-remanufacturing cost as a constant.…”