Developing Reverse Logistics Maturity Model to Transition to - PowerPoint PPT Presentation

Developing Reverse Logistics Maturity Model to Transition to Circular Economy Serhan Alshammari 13 th Sep 2017 Scottish Institute of Remanufacturing www.cranfield.ac.uk 1

Content • Circular economy –CE- business motivation. • CE challenges. • Role And Requirements Of Logistics For A CE. • Reverse Logistic Maturity Model: Study approach • RL Archetypes: Different products driving RL requirements • Reverse Logistics Maturity Model Structure • Maturity Levels Pathway For Reverse Logistics 2

Reasons To Adopt CE Principles Create value New business models • Differentiation • Cost savings • Strengthen resilience Improve & innovate products • Supply stability • Risk reduction • • Resilient supply chains Improve reputation • Comply with regulations Attracting talent • Increase customer satisfaction • • Corporate Responsibility towards stakeholders Ø So why do we not yet see the implementation of CE on a large scale? 3

Content • Circular economy –CE- business motivation. • CE challenges. • Role And Requirements Of Logistics For A CE. • Reverse Logistic Maturity Model: Study approach • RL Archetypes: Different products driving RL requirements • Reverse Logistics Maturity Model Structure • Maturity Levels Pathway For Reverse Logistics 4

Key challenges limiting the scaling-up of CE principles Complexity of managing the circular economy value chain, including: • Managing the return, recovery and remarketing of varying product models • Return products fed into the circular cycle at varying times and in varying conditions Understanding reverse logistics requirements, regarding: • Asset tracking • Optimized product and material flows • Compliance with waste handling regulations Preserving the residual value of return products, considering: • Product type and condition • Recovery purpose Ø We need to understand the role and requirements of logistics for a CE 5

Content • Circular economy –CE- business motivation. • CE challenges. • Role And Requirements Of Logistics For A CE. • Reverse Logistic Maturity Model: Study approach • RL Archetypes: Different products driving RL requirements • Reverse Logistics Maturity Model Structure • Maturity Levels Pathway For Reverse Logistics 6

Role And Requirements Of Logistics For A CE recycling material recycling Complete SC 1970s 1980s 1990s 2000 against the primary waste disposal Process planning • Reverse logistics flow management of value recovery and hazardous materials creation • Circular Economy Supply Chain Operations Reference model, SCOR, V9 Ellen MacArthur Foundation, http://www.ellenmacarthurfoundation.org/circular- economy/interactive-diagram 7 Lambert, GSCF Model

Content • Circular economy –CE- business motivation. • CE challenges. • Role And Requirements Of Logistics For A CE. • Reverse Logistic Maturity Model: Study approach • RL Archetypes: Different products driving RL requirements • Reverse Logistics Maturity Model Structure • Maturity Levels Pathway For Reverse Logistics 8

Designing the Reverse Logistics Maturity Model Archetypical Models Maturity Pathway Reverse Logistics Framework • Standard, prototypical • Detailed understanding of • Understanding of approaches to RL in use today requisite component components of successful characteristics for reverse logistics for CE • Key conditions which developmental stages determine appropriate model • Framework for self • Developmental pathway and assessment of critical path • Example product classes incremental steps items 9

Content • Circular economy –CE- business motivation. • CE challenges. • Role And Requirements Of Logistics For A CE. • Reverse Logistic Maturity Model: Study approach • RL Archetypes: Different products driving RL requirements • Reverse Logistics Maturity Model Structure • Maturity Levels Pathway For Reverse Logistics 10

RL Archetypes: Different products driving RL requirements A: Low value Extended Producer Responsibility Product examples - Tires - Consumer electronics - Shipping pallets Refurbish Centralized collection scheme RL requirements - Subject to increasing EPR 1) Remanufacture Consumers/users e.g. Waste/Recycling Municipal collection, legislation Service Provider Drop-off, Part Recovery - Maximize return volumes Return shipping, Milk runs, - Standardize RL process POS collection Recycle Realizing economies of scale Return Recovery Remarketing 1) Extended Producer Responsibility (Front-End) (Engine) (Back-End) 11

RL Archetypes: Different products driving RL requirements A: Low value Extended Producer Responsibility Product examples - Tires - Consumer electronics Refurbish - Shipping pallets RL requirements Remanufactur - Subject to increasing EPR 1) legislation Recover - Maximize return volumes partially - Standardize RL process Recycle Realizing economies of scale Consumer/ User Return Recovery Remarketing (Front-End) (Engine) (Back-End) C entralized collection 1) Extended Producer Responsibility scheme Waste/R ecycling S ervice P rovider e.g. Municipal collection, Drop-off, R eturn shipping, Milk runs, P OS collection 12

RL Archetypes: Different products driving RL requirements B: Service parts logistics Product examples Reuse - Machinery Refurbish Manufacturer A - Automotive parts Remanufacture Distributor/ Recycle Consumers/users Service partner/ RL requirements 3PL e.g. day definite Reuse - Combine the return of used domestic transport Refurbish Manufacturer B parts with the supply of Remanufacture new or refurbished parts Recycle - Optimized transport flows Reuse Distributor/Service Refurbish partner/ 3PL e.g. Manufacturer C Combination of return and Remanufacture dedicated transport delivery for seamless Recycle replacement Return Recovery Remarketing (Front-End) (Engine) (Back-End) 13

RL Archetypes: Different products driving RL requirements B: Service parts logistics Product examples - Machinery - Automotive parts Distributor/ S ervice partner/ 3P L e.g. day definite Reuse Manufacturer A domestic transport RL requirements - Combine the return of used Refurbish Manufacturer B parts with the supply of new or refurbished parts Distributor/S ervice partner/ 3P L e.g. Remanufactur dedicated transport - Optimized transport flows Manufacturer C Combination of return and Recycle delivery for seamless Consumer/ User Return Recovery Remarketing (Front-End) (Engine) (Back-End) replacement 14

RL Archetypes: Different products driving RL requirements C: Advanced Industrial Products Recovery Product examples - IT, network, telecom Reuse/ redistribute equipment Refurbish Manufacturer A Distributor A / Remanufacture - Medical equipment Service partner/ Recycle 3PL e.g. dedicated transport Consumers/users RL requirements Reuse/ redistribute - High-touch requirements Distributor B / Refurbish Service partner/ - Preserve the product Manufacturer B Remanufacture 3PL e.g. dedicated transport return value Recycle - Collection should be Reuse/ redistribute Distributor C / combined with the Refurbish Service partner/ Manufacturer C replacement of the asset Remanufacture 3PL e.g. dedicated transport Recycle Transparency and trusted or direct return Return Recovery Remarketing (Front-End) (Engine) (Back-End) 15

RL Archetypes: Different products driving RL requirements C: Advanced Industrial Products Recovery Dis tributor A / S ervic e partner/ Product examples 3P L e.g . dedicated trans port - IT, network, telecom Reuse Manufacturer A equipment Dis tributor B / - Medical equipment S ervic e partner/ 3P L e.g . dedicated trans port Refurbish RL requirements Manufacturer B - High-touch requirements - Preserve the product Remanufactur Dis tributor C / S ervic e partner/ return value Manufacturer C 3P L e.g . dedicated trans port - Collection should be Recycle combined with the replacement of the asset Recovery Remarketing Consumer/ User Return (Engine) (Back-End) (Front-End) Transparency and trusted or direct return 16

Content • Circular economy –CE- business motivation. • CE challenges. • Role And Requirements Of Logistics For A CE. • Reverse Logistic Maturity Model: Study approach • RL Archetypes: Different products driving RL requirements • Reverse Logistics Maturity Model Structure • Maturity Levels Pathway For Reverse Logistics 17

Reverse Logistics Maturity Model Structure RL component Decision Areas to assess dimension Strategic Reverse logistics strategy RETURN Tactical Reverse logistics network structure (FRONT END) Performance Responsiveness and visibility of items in RL flow Strategic Recovery strategy RECOVERY Tactical Returned products inventory control (ENGINE) Performance Returned material evaluation Strategic Remarketing in secondary markets REMARKETING (BACK END) Tactical Remarketing planning for secondary markets Performance Remarketing data 18

Content • Circular economy –CE- business motivation. • CE challenges. • Role And Requirements Of Logistics For A CE. • Reverse Logistic Maturity Model: Study approach • RL Archetypes: Different products driving RL requirements • Reverse Logistics Maturity Model Structure • Maturity Levels Pathway For Reverse Logistics 19