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Prof Kampan Mukherjee Department of Management Studies & Dean (Academic) Indian School of Mines Dhanbad kampan_m@hotmail.com
National Seminar on REMANUFACTURING organised by ASSOCHAM at New Delhi on 18th September, 2009
Agenda
Background What is Product Recovery Management? Some global initiatives Product Recovery Options Prime motivators Closed loop Supply Chain Indian scenario Outcome of an empirical study Publications
National Seminar on REMANUFACTURING organised by ASSOCHAM at New Delhi on 18th September, 2009
Background
Some fundamentals not to be avoided: Space and natural resources on earth have limitations Development and consumption at any generation should not affect the development and healthy life of subsequent generations Resultant global missions in economic development: Reduction of disposable wastes, meant for landfilling and incineration Lowering of resource use in economic activities Re-use of non-biodegradable and harmful substances Devising mechanism for low-cost production to meet ever-expanding consumer market
National Seminar on REMANUFACTURING organised by ASSOCHAM at New Delhi on 18th September, 2009
Background Answer: Maximum possible recovery of values from any product First significant step in this direction recycling Now an essentially unique field of management Product Recovery Management
National Seminar on REMANUFACTURING organised by ASSOCHAM at New Delhi on 18th September, 2009
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REFURBISHING returns are disassembled to the level of modules and critical ones are inspected, fixed or replaced
REMANUFACTURING returns are completely disassembled to parts/ components, thoroughly inspected, defective and worn-out parts are repaired or replaced by new ones and then finally reassembled to build up the remanufactured product. Technological upgradation is possible CANNIBALIZATION recovery of certain parts/components, RECYCLING recovery of material is done and the identity of the original product/parts is lost
National Seminar on REMANUFACTURING organised by ASSOCHAM at New Delhi on 18th September, 2009
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Disposal
Material Recycling
Comprehensive Framework of Product Recovery System
National Seminar on REMANUFACTURING organised by ASSOCHAM at New Delhi on 18th September, 2009
National Seminar on REMANUFACTURING organised by ASSOCHAM at New Delhi on 18th September, 2009
National Seminar on REMANUFACTURING organised by ASSOCHAM at New Delhi on 18th September, 2009
Inventory Management
Remanufacturing operations
Inventory Management
Modes of Collection Take back; Buy-back; Off-lease/Off-rent; operations Auction; Warranty returns. Agents responsible for collecting OEM himself; Third-party; Take-back centers. Take back period Quantity of returns to be acquired Fixing of buy-back price age and usage
Remanufacturing
Inventory Management
Reverse Logistics managed by OEM, Third-party Logistics Providers, Third-party Remanufacturers Remanufacturing Responsibility of the service providers in the logistics chain operations - Gathering , Transportation, Disassembly, Sorting, Cleaning, Inspection of returns. Size and condition of the returns Special methods to transport, handle and store returns Returns flow Transporting in units or batches
Reverse Logistics
Inventory Management
Remanufacturing operations
Disassembly
Uncertain recovery rates; Homogeneity of product range; Disassembly sequence; Depth of disassembly; Lot-sizing; Remanufacturing activities areComplexity managed by five sets of decision Corrosion/Rust; Dirt/Oil; in product design; Special tools required; Worn-out fastener areas heads; Size of Products; Availability of disassembly technology; PUSH/PULL strategy; Source of disassembly technology; Cleaning Dirt/Oil/Debris; Corrosion/Rust; Size and Shape of parts/ orifices; Fragility of parts; Material type; Sorting Identification of similar components; Classification and codification; Returns Acquisition Inspection Skill and Knowledge; Defining specifications and tolerances; Reverse Management Identifying defects; Special instruments required; Product Logistics diversity; Repair/Replacement Difficulty in availability of new parts; Expertise; Reassembly Skill of workers; Complexity in design; Product diversity; Fastening problems; Special tooling; Material type: Serial Remanufacturing Sales and number specific/matching Inventory parts; Uncertain demand;
Marketing
Process
Management
Remanufacturing operations
Remanufactured product or spare parts Potential customers Remanufacturing Green image as a marketing tool Process Cheaper Price Competition with second-hand market Customers perception on inferiority of remanufactured products
Inventory Management
Remanufacturing operations
No such need Certainty in planning materials Fixed routings and more stable processing times Manufacturing system has two major components: fabrication and assembly
Forecasting
Inventory management
Types: returns, remanufactured parts, new parts, new and remanufactured substitute parts, original equipment manufacturer parts
National Seminar on REMANUFACTURING organised by ASSOCHAM at New Delhi on 18th September, 2009
Indian Scenario
Existing legislation
Environment (Protection Rules), 1986 Rule 3A, Schedule VI, Annexure I encouragement for recycling, reuse and minimization of waste material, recovery of reusable materials. The Batteries (Management and Handling) Rules, 2001- Rule 4 to ensure collection of used lead acid batteries against new ones. Ministry of Environment and Forest is expected to design a tracking system for collection, distribution and reprocessing/ recycling of used batteries. The Recycled Plastics Manufacture and Usage Rules, 1999
Indian Scenario
Fast increase in consumption of remanufacturable products penetration rate of passenger car 9 per thousand (growth rate 7%) and of PC 11 per thousand, growth rate of cell phone 18% (500 million subscribers in 2010), etc. Availability of used products used car market growth rate of 20% with every 15% growth of car sales, 2 million PCs ready for refurbishing per annum, PC life reduced to 2 to 3 years etc. High price sensitivity in developing country 1 million additional potential customer for every reduction of 25 to 30% of new car price Remanufacturing is labour-intensive (30% of total cost)
Indian Scenario
But still much less corporate houses involved in remanufacturing as organised business sector Some companies involved in remanufacturing
Xerox ModiCorp Ltd. (remanufacturing photocopiers) United Van der Horst Ltd. (repairing, refurbishing and remanufacturing marine, oilfield and industrial products) Soft-AID Computers Pvt. Ltd. (refurbishing printers) Kores Printer Technology Ltd. (refurbishing printers) Transdot Electronics Pvt. Ltd. (refurbishing printers) Timkin India Ltd. (remanufacturing of large industrial and rail bearings)
National Seminar on REMANUFACTURING organised by ASSOCHAM at New Delhi on 18th September, 2009
Legislation
Complex and costly reverse logistics system Low acceptability of remanufactured product due to unawareness of its quality and price Economic benefit may be the prime driving force rather than legislative compulsion
National Seminar on REMANUFACTURING organised by ASSOCHAM at New Delhi on 18th September, 2009
Publications
1. 2. 3. Mukherjee, K. Reverse Logistics for Product Recovery Issues and models, Vision (Special issue on Supply Chain Management), Vol 7, Special Issue, 2003, pp 141-149 Mukherjee, K. and Mondal, S., Analysis of issues relating to remanufacturing technology a case of an Indian company, Technology Analysis and Strategic Management, Vol. 21, No. 5, July 2009, pp. 639-652. Mukherjee, K. and Mondal, S. (2008), Some studies on remanufacturing activities in India, In: Environment Conscious Manufacturing, edited by Gupta, S.M. & Lambert A.J.D.(Fred), CRC Press, Taylor and Francis Group, New York, pp. 445-471. Mukherjee, K. and Mondal, S. (2007), Management of remanufacturing business a critical study of a photocopier remanufacturer, Productivity, Vol. 48, No. 1, pp. 80-90. Mondal S. & Mukherjee K., (2006), Buy back Policy Decision in managing Reverse Logistics, International Journal of Logistics Systems and Management, Vol. 2, No. 3, pp. 255-264. Mondal S. & Mukherjee K., (2006) An Empirical Investigation on feasibility of Remanufacturing activities in Indian economy, International Journal of Business Environment, Vol. 1, No. 1, pp. 70-88.
National Seminar on REMANUFACTURING organised by ASSOCHAM at New Delhi on 18th September, 2009
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National Seminar on REMANUFACTURING organised by ASSOCHAM at New Delhi on 18th September, 2009