P 2 – Reverse Logistics

In the current scenario, one of the problems mentioned in the survey was the problem of the pallets used to transport components not being returned to the suppliers. At present, there is no clear mechanism that is responsible for returning the pallets to suppliers. A truck is responsible for carrying these pallets back, but without any adaptation to the needs of transportation of components to Autoeuropa.

This example reports one of several situations in which the reverse logistics interoperability failure may appear. This becomes visible in the analysis of data presented in Figure 6.8.

Figure 6.8. Interoperability degree of P2 considering and by criteria.

In the first analysis, it is verified that the degree of interoperability requirement for the implementation of this practice is around very high level. This shows that this practice is important for the functioning of the supply chain in which it operates and requires a strong collaboration between entities. However, actual performance against the criteria of this practice is situated around the middle and lower levels. Holistically, there is a substantial deviation from the requirements of interoperability required to perform the reverse logistics. This discrepancy is shown graphically (see Figure 6.9) in which is denoted a distance between 20 to 60 %.

Figure 6.9. Deviation of P2 implementation to expected interoperability by criteria.

The obvious parameter in need for improvement is BS and classified as high level of interoperability required, facing the actual low level. This may be interpreted by the lack of clarification of the strategic importance of having a system that enables the implementation of reverse logistics in the SC, such as the definition of the points on which this decision affects the collaborations and to whom each task is assigned. Graphic representation of deviation percentage in Figure 6.9 stresses the evidence that P2

does not fit in strategic priorities of focal firm neither the SC.

In terms of OS, the implementation of P2 has an appropriate organisational system, since it is

evaluated in the current situation with a high level of interoperability. The internal system of

0,0 0,2 0,4 0,6 0,8 1,0

BS OS EWC CBP MER Bse IS Average

In te ro p e ra b il it y D e g re e Interoperability Criteria Ideal Actual 0% 20% 40% 60% 80%

BS OS EWC CBP MER Bse IS Average

D e v ia ti o n Interoperability Criteria

Autoeuropa allows companies to clearly identify what is the point of contact (section or professional responsible) from which you can make requests, for example, to perform the reprocessing of defective components.

The two problems more pronounced, with deviation of more than 40 %, are mainly focused on CBP and MER. The lack of a clear process to enable inventory return to suppliers is the foundation of this lack of interoperability of these two criteria. If, on one hand, there is a clear process that affects the visibility of the problem and the definition of who is responsible for the return of components and/or pallets, on the other hand, there is no prior definition of collaborative contracts that stipulate this requirement to carry out production activities. This factor means that suppliers often run out of pallets for shipment of components, because there is no clear responsibility on the part of Autoeuropa as on the suppliers.

The absence of the reverse logistics in the definition of strategic and, in turn, the lack of a mechanism to ensure the implementation of this practice, means that other functional areas of companies are affected. In terms of the EWC, there is a deviation of 38%. In this criterion the factors that most influence this problem are responsibility and efficiency of workers. In the absence of a process of return of stock, we cannot assign responsibility to any member of the entities, and will not be possible to evaluate how efficient the same member will be in the process.

Another interoperability area of denoted remarks is BSe. The absence of clarity in the implementation of this practice leads to lack of proper terminology, and information sharing that exists today in the chain is not transmitted seamlessly. For example, if there is a defective part arriving on the assembly line and cannot be fixed in place, it must return to the supplier. To this end, a contact is made between logistics department seeking a new part and inform the defective part to be sent for reprocessing. However, even with this contact, there is accumulation of non-conforming parts that are never reprocessed. Only when these parts reach a considerable level of stock, the corporate headquarters of Volkswagen takes the decision to take action on this inventory. As a solution, a mechanism that allows adequate logistical tracking of components and accessories transportation along the chain, and a flow of information through an IS should allow parts already manufactured but not conforming to return to production at the supplier.

The IS is another point to remark in implementing this practice. As in the previous situation, no mechanism that rules reverse logistics, it is known that the information needs of the process. Thus, it would be desirable information system with a high level of interoperability, where information on stock to return to the supplier and transit was visible throughout the chain, equipped with tools for rapid data exchange and secure flow, allowing decision making and the reverse flow of the stock.