Product Realisation within Reverse Supply Chain

Abstract

Reverse Supply Chain (RSC) is defined as the value chain for defect products returning to the company, or its partners, from customers, or the end users. The defect products are thereafter either disposed & replaced, or repaired & reused. Axis communications have an established RSC department, which would like to deepen their knowledge how certain product- and production parameters can be optimized.
The aim of this project is therefore ‘to research and develop selected parameters of Axis RSC to form a base for decisions on how to optimize their influence going forward’. The parameters are, among others, repair costs, unit availability, and scrapping rates.
To fulfill this goal, some of Axis different products needs to be studied, including their value and complexity. Method used is the first 4 steps of Action Research: data gathering, data feedback, data analysis, and action planning. However, the report begins with a literature study to lay the foundation of knowledge regarding the subjects relevant for the project.
The supporting tool for exploration is a simulation model built in ExtendSim. This model covers the path of defect unit, including arrival from customer, local and central repair sites, manufacturer, and return to customer. The model is explored by what-if questions. Each question variates inputs in the model, and the outputs are observed.
The output of 10 what-if scenarios is the result of this report, which are studied both by comparison, and by third-step analysis. The discussion covers several subjects, like pros and cons for routing alternatives, stability in storage levels, and CO2 footprint. A general discussion was held regarding simulation modelling and future work. It was finally concluded that by the data collection and analyzations made, the aim for the project is seen as fulfilled.

Popular Abstract

This project creates a simulation model over a whole Reverse Supply Chain to study the effects of what selected inputs (repair rates, lead times, etc.) can have on the outputs (product costs, storage levels, etc.).

Reverse Supply Chain (RSC) is a rather new idea which companies more frequently include in their services. The reason for this is often to strengthen the relationship to the customer, but also for environmental reasons – to scrap as few products as possible that instead could be repaired.
The company Axis communications wishes to deepen their knowledge how parameters like repair costs, unit availability and scrapping rates can be optimized in their RSC. To fulfil this goal, data was collected regarding a product in their chain. This data was translated into a digital simulation model built in ExtendSim to mimic the RSC. The model includes all routes that a defect unit can take; from arrival from customer, to local and central repair sites, manufacturer, and back to customer again. When finished, the model was used to explore different scenarios via what-if questions. This showed how various inputs can affect the chain if the changes would be done in real life.
A total of 10 what-if scenarios was performed, which forms the result of this report. The scenarios showed the opportunities and risks of, among other, complete local repairs, to send all defect units back to manufacturer, or keeping the routing as is but decreasing the lead times. The stability of the current RSC was also tested, by an unstable flow of incoming units, and a long-time simulation run of a year. This proved the flow to be rather robust, but with possibilities of improvements.
The collected results were analyzed in-depth by both comparing the scenarios, and by relating the subject to sources in literature and knowledge of personnel within the company. Subject brought up is for example the pros and cons of modularization, Lean thinking within RSC, and the increasing risks of relying on conflict materials.
Another aspect which was brought up was the increasing need of taking environmental aspects into consideration, mainly by comparing CO2 footprint when making the choice the discarding and replacing a product or sending it to another country for repair. The conclusion of the report is that the aim was fulfilled, where the investigations can form a base for decisions on how to optimize Axis RSC going forward.

• author: Wisell Helin, Amilia and Gustafsson, Sara
• supervisor: Christina Windmark
• organization: Production and Materials Engineering
• course: MMTM05 20231
• year: 2023
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Production and materials engineering, Reverse supply chain, RSC parameters, Simulation modelling, What-if scenarios, ExtendSim
• publication/series: Diploma work
• report number: CODEN:LUTMDN/(TMMV-5353)/1-101/2023
• other publication id: ISRN
• language: English
• id: 9131716
• date added to LUP: 2023-07-03 09:00:54
• date last changed: 2023-07-12 13:00:20