Introduction
Reverse logistics refers to the return of products to the manufacturer for various reasons such as defection, recycling or servicing. It aims at recapturing the value and the lifecycle of the product. OEM reverse logistics happens when a consumer is not dissatisfied with the products; thus, they have to be returned to the original equipment manufacturers (OEM). Consumers’ dissatisfaction may result from the malfunctioning of the products. The original manufacturers have to recapture the value of the original product to meet the consumers’ needs that were not initially met. This paper seeks to analyze, evaluate and synthesize information from various articles to identify their methodological strengths and weaknesses, establish relationships among studies, highlight trends in results and identify gaps in the literature of OEM reverse logistics.
Literature Analysis
Rosenberg et al. (2023) use a case study methodological design to examine the recycling of electric vehicle battery systems. The case study focuses on a manufacturer of electric vehicles which deals with all battery recycling activities. It found that OEMs must develop and evaluate business circular models. Larger corporations, especially the ones with commonly shared recycling networks, benefit more than a single stakeholder-driven recycling network (Rosenberg et al., 2023). However, although large corporations enjoy economies of scale, the participating stakeholders add a margin to the company’s costs. Recycling activities are usually few in the first phases of the development of companies but increase with the increase in sales due to many returns.
A study by Andel. (2013) focused on using high technology to find e-channel solutions to improve consumer satisfaction by integrating customer interaction into their operations. It aims to establish how companies can use technology to gain increased control over product returns. The research found that cross-selling and up-selling are major revenue drivers for OEMs. However, only a few companies have the capabilities to exploit the opportunities due to channel conflicts. It establishes that best-in-class aftermarket operations enjoy high IT systems integration within the companies’ after-sales value chain. Therefore, best-in-class aftermarket services are critical for companies to differentiate themselves from their competitors, thus establishing successful long-term brand loyalty.
Kalmykova et al. (2018) review the literature on theoretical approaches and strategy implementations of Circular Economy (CE). It analyzes various CE approaches with their underlying principles and develops CE implementation tools. It focuses on two tools: the CE strategies and implementation databases. The study found that over 45 CE strategies can be applied in the value chain and over 100 implementation cases.
Research on CE strategies is continued by Vanegas et al. (2018) in a study that focuses on the ease of disassembly of products to support CE strategies. Its methodological design uses a systematic literature review of available literature and case studies. The study proposes an “eDiM,” ease of disassembly metric, a robust method to calculate disassembly time. The method has a straightforward calculation sheet which leads to verifiable results, as demonstrated by the case study.
Ryen et al. (2018) focused on ecological foraging models that inspire optimized recycling systems in the CE. The study focused on the optimal foraging theory, adapted to the material recycling process, leading to increased return on investment within the CE. Therefore, the research concludes that nature inspires and guides policy-making and decision-making in material recovery, EoL management and electronic waste management systems.
Sureka et al. (2018) examined the factors that influence the success of the reverse logistics process. The study investigated the factors by focusing on soft drink companies. Following Pareto analysis and analytical hierarchical process, the research found that the efficiency and effectiveness of the reverse logistics process depend on factors such as transportation, accidents, packaging, storage method, cleaning process and sorting process. Additionally, other external factors may lead to inefficiencies. Establishing the root causes of inefficiencies is key to developing a frictionless reverse logistics process.
Conclusion
Reverse logistics involves various processes such as recycling, refurbishment and disassembling. Large companies and corporations with multiple players in recycling incur fewer costs than single stakeholder-driven recycling. Additionally, newly established companies have few returns, meaning fewer reverse logistics activities. In a circular economy, practices are implemented to ensure fewer costs of recycling and disassembling. Effective and efficient recycling practices and less disassembling time lead to lower costs. However, the success of reverse logistics depends on factors such as transportation, accidents, packaging, storage method, cleaning, and sorting.
References
Andel, T. (2013). OEMs Call Reverse Logistics a Competitive Differentiator. https://www.mhlnews.com/transportation-distribution/article/22049227/oems-call-reverse-logistics-a-competitive-differentiator
Kalmykova, Y., Sadagopan, M., & Rosado, L. (2018). Circular economy–From a review of theories and practices to developing implementation tools. Resources, conservation and recycling, 135, 190-201. https://doi.org/10.1016/j.resconrec.2017.10.034
Rosenberg, S., Glöser-Chahoud, S., Huster, S., & Schultmann, F. (2023). A dynamic network design model with capacity expansions for EoL traction battery recycling–A case study of an OEM in Germany. Waste Management, 160, 12-22. https://doi.org/10.1016/j.wasman.2023.01.029
Ryen, E. G., Gaustad, G., Babbitt, C. W., & Babbitt, G. (2018). Ecological foraging models as inspiration for optimized recycling systems in the circular economy. Resources, Conservation and Recycling, 135, 48-57. https://doi.org/10.1016/j.resconrec.2017.08.006
Sureka, G., Bandara, Y. M., & Wickramarachchi, D. (2018). Factors affecting the efficiency and effectiveness of the reverse logistics process. Journal of International Logistics and Trade, 16(2), 74-87. https://doi.org/10.24006/jilt.2018.16.2.74
Vanegas, P., Peeters, J. R., Cattrysse, D., Tecchio, P., Ardente, F., Mathieux, F., & Duflou, J. R. (2018). Ease of disassembly of products to support circular economy strategies. Resources, Conservation and Recycling, 135, 323-334. https://doi.org/10.1016/j.resconrec.2017.06.022
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