A characterisation of logistics networks for product recovery

Omega 28 (2000) 653±666

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A characterisation of logistics networks for product recovery
Mortiz Fleischmann a,*, Hans Ronald Krikke a, Rommert Dekker b, Simme Douwe P. Flapper c
Faculty of Business Administration, Erasmus University Rotterdam, PO Box 1738, 3000 DR, Rotterdam, The Netherlands b Faculty of Economics, Erasmus University Rotterdam, PO Box 1738, 3000DR, Rotterdam, The Netherlands c Faculty of Technology Management, Eindhoven University of Technology, PO Box 513, 5600 MB, Eindhoven, The Netherlands Received 15 March 1999; accepted 16 February 2000
a

Abstract Recovery of used products is receiving much attention recently due to growing environmental concern. Ecient implementation requires appropriate logistics structures to be set up forthe arising goods ¯ow from users to producers. We investigate the design of such logistics networks. As a basis for our analysis we review recent case studies on logistics network design for product recovery in di€erent industries. We identify general characteristics of product recovery networks and compare them with traditional logistics structures. Moreover, we derive a classi®cation scheme fordi€erent types of recovery networks. 7 2000 Elsevier Science Ltd. All rights reserved.
Keywords: Reverse logistics; Distribution; Location; Case studies

1. Introduction Increasing interest in re-use of products and materials is one of the consequences of growing environmental concern throughout the past decades. Waste reduction has become a prime concern in industrialised countries. In view ofdepleted land®ll and incineration capacities e€orts are made to re-integrate used products into industrial production processes for further use. A concept of material cycles gradually replaces a `one way' perception of economy. Several countries have enforced environmental legislation charging pro-

* Corresponding author. Tel.: +31-10-408-2277; fax: +3110-408-9010. E-mail address:m¯eischmann@fac.fbk.eur.nl (M. Fleischmann).

ducers with responsibility for the whole life cycle of their products [6,11,12,43]. Take-back obligations for a number of product categories such as electronics, packaging material, and cars are some of the measures taken. Moreover, customer expectations urge companies to reduce the environmental burden of their products. A `green' image has become an importantmarketing element [35,40]. Finally, re-use may be economically attractive due to material and added value recovery. From a logistical perspective re-use activities give rise to an additional goods ¯ow from the consumers back to producers. The management of this ¯ow opposite to the conventional supply chain is the concern of the recently evolved ®eld of `Reverse Logistics' [40]. Issues arisingencompass distribution, inventory and production management aspects. Important factors characterising speci®c re-use situ-

0305-0483/00/$ - see front matter 7 2000 Elsevier Science Ltd. All rights reserved. PII: S 0 3 0 5 - 0 4 8 3 ( 0 0 ) 0 0 0 2 2 - 0

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M. Fleischmann et al. / Omega 28 (2000) 653±666

ations include economical and ecological drivers, actors involved and their respectiveroles, and the technical form of re-use. We refer to Fleischmann et al. [17] for a more detailed discussion. In this paper we address the physical design of logistics networks for product recovery activities. More precisely, we de®ne the object of our study as logistics structures constituted of physical locations, facilities, and transportation links, conveying used products from being set free bytheir former users to being re-used in some additional application. Reuse may take place on a product-, component-, or material-level. In contrast, we do not consider incineration (sometimes referred to as `energy re-use') a form of re-use in the proper sense and hence do not include the corresponding waste collection networks in our de®nition. Our goal is to identify characteristics of...