Managing product returns for reverse logistics

Abstract

PurposeThe purpose of this paper is to present a framework to manage product returns for reverse logistics by focusing on estimation of returns for select categories of products in the Indian context.Design/methodology/approachThe paper develops a conceptual model and thereafter an integrated modeling framework borrowing from existing literature and industry practices. It utilizes product ownership data, average life cycle of products, past sales, forecasted demand and likely impact of environmental policy measures for estimating return flows. Informal interviews with 84 stakeholders are carried out to estimate significant parameters. Software packages, decomposition methods and heuristics are utilized for solution.FindingsThe integrated framework helps in estimating returns for select categories of products and thereafter taking simultaneous decisions on their disposition, location and capacity of facilities and flows of returned products for a given time horizon under various strategic, operational and customer service‐related constraints.Research limitations/implicationsA “push” system where the volumes of returns drive the decisions. Estimations and optimization have been carried out for select product categories and not brands or original equipment manufacturers (OEMs). No free choice of facility locations.Practical implicationsThe insights and learning under different scenarios may be utilized as inputs for decision making by various stakeholders such as OEMs and their consortia, local remanufacturers and third party service providers.Originality/valueAt methodological level, our framework combines descriptive modeling with optimization technique, while at topological level; it provides detailed solutions for network configuration and design.