Integration of reverse logistics activities within a supply chain information system

Computers in Industry 56 (2005) 105–124 www.elsevier.com/locate/compind

Integration of reverse logistics activities within a supply chain information system Marc Chouinarda,b,*, Sophie D’Amoursa, Daoud Aı¨t-Kadia,b a

De´partement de Ge´nie Me´canique, Faculte´ des Sciences et Ge´nie, Centre de Recherche sur les Technologies de l’organisation Re´seau (CENTOR), Universite´ Laval, Que., Canada G1Y 7P4 b Centre Interdisciplinaire de Recherche en Re´adaptation et en Inte´gration Sociale (CIRRIS), Institut de Re´adaptation en De´ficience Physique de Que´bec, 525 boul. Hamel, Que., Canada G1M 2S8 Received 22 December 2003; accepted 5 July 2004 Available online 21 September 2004

Abstract This article deals with problems related to the integration of reverse logistics activities within an organization and to the coordination of this new system. Reverse logistics activities refer to the recovery and processing of unused products and to the redistribution of reusable materials. For better control and management of these activities, new approaches and information support system are proposed here. A new organizational system, which represents the course of the operational processes and the management of the organization’s resources (labor, material, etc.), and an information system architecture are proposed for a rehabilitation center. # 2004 Elsevier B.V. All rights reserved. Keywords: Reverse logistics; Business process reengineering; Information systems

1. Introduction The recovery and processing of unused products are concerns which increasingly affect organizations, be it to improve customer service or to meet environmental pressures. Mail-order, online purchases and after-sales * Corresponding author. Tel.: +1 418 656 2131x12244; fax: +1 418 656 7415. E-mail address: [email protected] (M. Chouinard).

services, such as the maintenance of guaranteed products, are all situations which contribute to the increase of returns within an organization. Also, environmental regulations require them to gradually reduce their consumption of non-renewable resources and to decrease the amount of waste materials produced. Some recent regulations require certain industries to recover their products once they have reached the end of their useful life or when they are unused. This increase in return rate will have significant effects on the current practices of these industries.

0166-3615/$ – see front matter # 2004 Elsevier B.V. All rights reserved. doi:10.1016/j.compind.2004.07.005

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Until recently, organizations did not pay much attention to their returns. Commercial returns are the most common, but returns of guaranteed products, byproducts, packaging and returns of unused products can also be found [1]. At present, returned products are generally collected at the point of sale, inspected and sorted by employees to the best of their knowledge. Moreover, the employee determines if the return is accepted and the actions to be taken (credited amount, exchanges, etc.). Thereafter, a certain amount of time can pass before further actions are taken in regards to these recovered products. These products are generally reintroduced directly into the market as new, and when this is not possible, resold at discounted prices or simply disposed of. In fact, because of the uncertainty factors related to returned products (quality, quantity and time) [1–5], each business unit seeks to minimize the impact of returns on their current activities, which are generally associated with the distribution of new products. Therefore they will choose the simplest and quickest disposal means for the returned products, without concern for other means of reintroducing the product into the market. Thus, they function primarily on a local level. Hence, these activities are generally sources of cost rather than income. Given economic and environmental contexts, some organizations are becoming aware of the importance of focusing their efforts on activities surrounding the return and processing of unused products. They seek to structure, organize, support and plan these activities so as to make more efficient use of available resources (labor, new, recovered and processed or, in this paper, valorized material, etc.). Valorization activities refer here, as for Thierry et al. [6], to repair, refurbishing, remanufacturing, cannibalization (dismantling for reusable material), and recycling activities that prolong the life cycle of product [7]. With an adequate integration of reverse logistics activities, in an economic or environmental context, organizations will be able to notice a double effect with their supply chain [1,8,9]. First, while focusing efforts on returns of products and their processing, competitive strategies will be set up which, at various levels, will contribute to a better performance of current activities of the supply chain, concentrated until now primarily on the distribution of new products [7,10]. Secondly, the new supply

chain, which integrates reverse logistics, will orient itself to ensure a robust management of any additional activities. The aim of this new supply chain is to ensure clean and adequate distribution of recovered products. Organizations will thus be interested in the emergent field of reverse logistics. It is in this perspective that the public health insurance of the Province of Quebec (Canada), which handles a great part of the distributed mobility aids (wheelchairs in our context) in this market, intends to improve the efficiency of activities related to the recovery and the processing of unused products. This organization, the Re´ gie de l’assurance maladie du Que´ bec (RAMQ), applies and manages various programs related to the healthcare system. The mobility aid program for people with reduced mobility is one of them. At present, 13 rehabilitation centers have been mandated and have their costs defrayed by the RAMQ to ensure the distribution and maintenance of its wheelchairs and they have been responsible for the recovery and processing of unused ones, since June 2000. However, one of these establishments, the Quebec Rehabilitation Institute (QRI), has been performing these additional activities on a voluntary basis for nearly 10 years. They started when they realized the potential impacts that these activities could have on their operation. Thus, with the goal to improve its internal management and contribute to this initiative undertaken by the RAMQ, the QRI created a research project concerning the valorization of wheelchairs. The present research is part of this project. Within this project, a reengineering of the business process was carried out. This reengineering created a new organizational structure, which represents the operational processes and the management of the organization’s resources (labor, material, equipment, etc.), and an information system architecture to integrate all activities. The context that led to this business process reengineering and some its results are presented in this paper.

2. Creating an effective and efficient supply loop/sustainable development The integration of reverse logistics activities into the regular supply chain will result in a new logistic

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system which can be called a supply loop. Such an approach fits well with the notion of sustainable development. In brief, with this concept firms seek strategies for economic development under environmental and social constraints. Their objective is to satisfy present needs without compromising the needs of future generations [11]. The reintroduction of recovered products in the market, in their original form or following valorization activities, reflects this approach by reducing the consumption of nonrenewable resources. Thus, there will be less waste created, which will reduce these materials negative impact on natural resources. Until recently, the concept of sustainable development was used mainly in the design phase to reduce the environmental impact of a product in its production and distribution process as well as in its use. However, the responsibilities of organizations in regards to their products are constantly expanding. Organizations must satisfy customer needs not only by the quality of their products, but also by supporting them with various after-sales services, such as maintenance. Jacqueson [12] and Ryan [13] refer to the ‘‘dematerialization’’ of products and activities within an organization. Some organizations see themselves forced to recover unused products from their customers. They must then not only deal with environmental concerns in terms of the production, distribution and utilization stages for their products, but also in terms of their return and processing. Two concepts of sustainable development can then be noted [7]:  Sustainable development – product perspective: Concept applied at the design stage of the product.  Sustainable development – organizational perspective: Concept applied to ensure effective and efficient activities related to the recovery and processing of recovered products. 2.1. Sustainable development – product perspective In the design stage of products, organizations will seek to reduce negative environmental impacts of their products by meeting some of the following challenges:  Reduce the resources.

consumption

of

non-renewable

     

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Favor recyclable materials. Opt for standardized materials. Integrate valorized components. Reduce the variety of components. Adopt a modular design. Reduce manual adjustments in order to decrease risk of error.

Moreover, in order to ensure profitable after-sales service, including maintenance and activities related to the recovery and processing of the recovered products, organizations will have to pay closer attention to the reliability of their products, both new and valorized. Therefore, they must be able to estimate the reliability of their products at any time in their life cycle. To maintain this reliability at a desired level, organizations will also be interested in designing products that can be easily repaired, thus to maintainability of the products. Costs generated by maintenance activities could be reduced by using valorized materials, always of good quality and at lower cost. This approach will be made more possible by optimizing the dismantling process of recovered products, so as to recover maximum value and to reduce processing costs. This concept is presented by Johnson and Wang [14] as the ‘‘desassemblability’’ of a product. By approaching these various aspects at the design stage, the aim is to simplify and add value to activities related to production, after-sales service, recovery and processing, in an economic and environmental perspective, all the while meeting the quality standards of the organization. 2.2. Sustainable development – organizational perspective The organizational perspective of sustainable development aims at supporting the memory of an organization to ensure a certain level of planning for the recovery and processing of recovered products. This is done to reduce the impact of uncertainties generally met with reverse logistics. By insuring an adequate integration of reverse logistics activities with primary activities, organizations will be motivated to structure and organize them. This will lead organizations to the following challenges [15]:

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 Analyze possible markets for recovered products: Return policies to control the reverse flows of material. Closed and/or open loop. Processing alternatives for recovered products.  Examine the requirements for the reverse logistics network by outsourcing or not additional activities.  Define the performance criteria of the network.  Determine the degree of integration of reverse logistics with the regular supply chain: Dedicated or integrated reverse logistics network. Centralized or decentralized network. Number of levels of the network. Dedicated resources or common resources with the regular supply chain.  Define operational processes.  Define required information.  Establish and continuously improve the supply loop. In their approach, organizations could be confronted with various key goals:

to establish decision-making criteria. These criteria can be grouped under two categories; circumstances associated to the product and those associated to the organization. The circumstances associated to the product refer more specifically to the:      

Technical specifications of the returned product. Reason for the return. Condition of the returned product. Failure law of the product. Disassembly sequence. Impacts of the reintegration of the recovered materials in the market.

The circumstances of concern for the organization refer to the following points:  Characteristics of the installations (equipment, labor, etc.).  Possible markets for the recovered materials in the supply loop.  Legislative constraints.  Clean disposal of the recovered materials.  Rate of return.  Demand for valorized materials.  Policies for the return and processing of recovered products.  Stock level.  Change in the business relationship with one of the actors of the supply loop.

 Increase possibilities for reuse of recovered materials by establishing new business relationships.  Standardize procedures, more particularly those connected to reverse logistics.  Provide adequate support for employees’ tasks.  Ensure collection, exchange and processing of the generated data by each actor in the supply loop.  Manage activities by considering the coordination of recovered, valorized and new products.  Follow and control products in all operational processes that they require through their life cycle.  Maintain a certain level of quality to products through their life cycle.  Establish return strategies to improve the possibilities and policies for recovery of products.  Plan, to a certain extent, activities related to the processing of recovered products.

These criteria will have a significant influence on the efficiency and effectiveness of the network configuration. By taking these criteria into account in order to structure, organize and plan reverse logistics activities, the aim is to correctly match supply (returns) with the demand for valorized materials. This will allow a better control of costs in addition to the economic and environmental gain generated by the reintroduction of recovered materials in the market.

All these factors relate to the uncertainties regarding the return of products. In order to better support the conditional nature of the procedures associated with reverse logistics activities, i.e. to more adequately consider the various factors that influence the course of the operational processes, it is necessary

2.2.1. ‘‘Push–pull’’ approach for the recovery and processing of recovered products To better match supply and demand for valorized products, it is more appropriate to manage activities with a ‘‘push–pull’’ approach. This is a hybrid concept which is based on long-term planning for

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certain stages of the operational processes (push) but which also allows the launching of other activities in reply to an order (pull) [16]. A decoupling point coordinates the two portions of the system. This comes from the desire to benefit as much as possible from the advantages of these two modes of management:  Push: prevents demand variability in the system.  Pull: decreases inventory levels. This approach is well adapted to the context of reverse logistics where the variability of activities is considerable and for which it can be desirable to profit from economies of scale. The activities of an organization must be adequately defined so as to carry out the processing of recovered products with effectiveness and efficiency, all the while taking demand into account and the capacities and constraints of the facilities. With this goal, two approaches can be considered. The first approach consists of directing the product towards the processing alternative which best fits the sorting criteria. However, this approach does not always permit optimal asset recovery (Fig. 1). The second approach consists of directing the product towards the most favorable alternative. When the circumstances of the organization (demand, stock level, etc.) do not support the best alternative, the product will be stored to eventually be revalued and sorted for the next best processing alternative. This approach could be considered for products judged as critical to the organization (Fig. 1). The management of material and information flows is a determining factor for these approaches, particularly with regard to stock levels. Inventory control will be of particular importance for certain situations [17]. As supply chain and reverse logistics processes could be complementary, inventory control for new and valorized products is necessary. However, this requires that all activities related to the processing of recovered products are closely controlled. 2.3. Current difficulties in the management of a supply loop With current approaches for the management of this extended supply chain, organizations do not have

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adequate means to fully benefit from all possible business opportunities. Moreover, organizations often do not possess a complete data warehouse which would feed the processes of decision-making at each stage of the products life cycle. Consequently, it is difficult to ensure an optimal utilization of the products throughout their useful life. Information systems should now consider the eventuality that a product can be reintroduced at a different level of an organization’s activities. New approaches for follow-up and control and the addition of new information must therefore be envisaged. Information to be stored will be extensive in order to correctly integrate and coordinate the various activities of the supply loop. This information will have to be defined taking into account the operational, tactical and strategic of decision-making levels of the organization, thus considering the way to structure, organize and plan an organization’s activities. For the management of the returns and processing of recovered products, organizations need to be able to [18]:  Store and process data for any given product.  Integrate available information into decision-making at the time of activities.  Use information for the follow-up and improvement of products and required activities (design, production, distribution, maintenance, recovery and processing of the recovered products). The following sections suggest how to integrate reverse logistics activities into the operations of the Quebec Rehabilitation Institute.

3. Case study: context of the Quebec Rehabilitation Institute The Quebec Rehabilitation Institute (QRI) is the second largest establishment in terms of the volume of wheelchairs distributed in the Province of Quebec. As with other establishments, the QRI is confronted with voluntary returns by customers or their families, in particular following the replacement of the mobility aids (MA) or the death of the customer. Ten years ago, the QRI encountered a significant warehousing problem for returned MA. As these products are the

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Fig. 1. Push–pull approach for the management of the reverse logistics activities of an organization [7].

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property of the RAMQ, certain rules must be followed for their disposal. At that time, employees disapproved of the fact that, although several returned MA were still in very good condition, they were required to deliver only new MA to customers who met the admissibility criteria of the principal mobility aids payer, the RAMQ. Customers were then confronted with a delivery delay of often more than 2 months. It was to rectify this situation that the QRI, with the consent of the RAMQ, became interested in the reallocation of the recovered MA. The possibility of reallocating recovered wheelchairs has improved customer accessibility for such MA, for which demand continually increases [19,20], along with the aging population [21]. The delivery delay for a valorized MA (reallocation of recovered MA after refurbishing) is generally 2 weeks and can even be as short as 1 day in certain situations. Some customers who are not eligible for a new MA are given the alternative of a valorized one. Following a general agreement between the RAMQ and all the rehabilitation centers of Quebec in June 2000, the customer or a family member is now required to return the MA when it is no longer in use. They must sign a contract to do such. Thus, all establishments have seen an increase in their return rate and must now handle the recovery and processing of recovered MA in a way that allows for correct reuse or disposal. This strategy was justified by a possible increase of customer accessibility for the mobility aids, while maintaining the free nature of the service for insured people and through its contribution to the environmental objectives of the government. During the first year of this agreement, 4317 devices were recovered and 1084 of them were reallocated by the rehabilitation centers [22]. Savings of close to 2 million dollars have been seen by the RAMQ. For the period between 15 June 2000 and 31 March 2002, the RAMQ saved 4.35 million dollars [23]. However, at the present time each establishment operates in an autonomous way. For the QRI, approximately 1500 MA have been recovered in the two first years of this agreement and 71% of them have seen their useful life prolonged: 46% were dedicated to reallocation, 14% were used for internal loans and 11% were disassembled for the recovery of some of their parts. At the QRI, demand for valorized MA is now greater than 30% of the allocation of

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wheelchairs, whereas it was 15% in the first year of the agreement. 3.1. Difficulties for the Quebec Rehabilitation Institute The recent decision by the RAMQ for all rehabilitation centers of the Province of Quebec to recover unused MA from customers has raised several questions regarding its implementation. In fact, the unused MA needs to be identified for recovery, the customer has to be located and the actors who will be responsible for the recovery and processing of the MA need to be designated. At present, the various establishments operate in an autonomous manner. However, the valorization processes at each of these facilities have not yet been precisely defined. It is currently being done on a voluntary basis and, for certain establishments, during the slack periods of the technical staff responsible for the preparation and maintenance of the MAs. The recovered wheelchairs are mainly reallocated, after some adjustments, disassembled for spare parts or are simply disposed of. The decision to take the valorization alternative is made by employees, generally mechanics, to the best of their knowledge. In effect there is neither a decision-support tool nor an information system to enable employees to correctly consider all the factors influencing the processing activities of the recovered MAs. The RAMQ gives a lump sum to establishments for each recovered MA. For the reuse of valorized products (MAs and parts), the RAMQ defrays only the labor required for the adjustment of the MA and the use of new material, and this only for when there will be a reallocation of the MA. Dismantling activities of recovered MAs are thus not covered and neither are those costs related to the reconditioning of the product before adding it to inventory. In the current context, it is difficult, even impossible, to judge if the costs defrayed by the RAMQ fully cover the expenditures met by the establishments. In fact, it is difficult for managers to evaluate the performance and the impacts of reverse logistics activities, since the current information system does not take all aspects into account. For the QRI, the agreement between the RAMQ and all rehabilitation centers has contributed to an

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increase in the importance given to valorization activities, since customers are now required to return their MA when they are no longer needed. The QRI has even dedicated a repair shop to handle the activities associated with the sorting and processing steps (valorization shop). This increase in valorization activities has had an impact on all operational processes, as much from an administrative as a technical point of view. More specifically, it has had a direct influence on the management of human and material resources, on the quality of customer service, on supply and maintenance strategies and, finally, on the administrative processes related to invoicing, archiving and data processing. Notably, the current approaches do not permit the tracking of MAs throughout their useful life. The stored information is specific to the use of new materials and serves primarily for accounting purposes. Moreover, the current information systems at the QRI do not take the activities associated to return and processing of the recovered products into account. Information is therefore incomplete for effective decision-making, which is made more difficult owing to the fact that data are not systematically gathered during activities at the QRI. In this way, the QRI began business process reengineering and reconsidering its information system, with the intention to support a harmonious integration of all their activities. 3.2. Business process reengineering The aim of the review of the operational processes at the QRI and of their information support system is to ensure better management and to decrease the complexity of recovery, processing and redistribution activities. This will increase the possibility of recovering all unused MAs and improve potential profits relating to the processing and reintegration of MAs into the supply loop, whether in their original form or as parts. With this goal, a closer follow-up of products and activities is necessary, in order to be more capable of controlling quality and yield. In fact, by employing new approaches and means, it will be possible for the QRI to be aware of state of the organization (demand, stock level, etc.) and the condition of the product for effective decision-making in reverse logistics activities. A ‘‘push–pull’’

approach, based on concepts introduced earlier in this article, has been proposed for the QRI situation. To integrate its operations, an information system architecture has been elaborated. 3.2.1. Push–pull approach for the processing of the recovered MAs In the QRI context, it is sometimes necessary for recovered MAs to be processed twice, in particular for those dedicated for reallocation. Wheelchairs are highly personalized equipment, i.e. specifically adjusted for the customer. Minimal adjustments must therefore be made to the MA before putting it in inventory, in order to avoid unnecessary work. Moreover, the quantity and the composition of inventories must be adequately maintained and controlled in order to meet the various needs of customers, without keeping a too great of range of relatively bulky MAs. The suggested approach (Fig. 2) for the coordination of all activities of the QRI is detailed in the present section. 3.2.1.1. ‘‘Push’’ portion. Within the framework of the reverse logistics activities at the QRI, the first portion ‘‘push’’ refers here to the recovery, grading and sorting stages of recovered MAs (Fig. 2). In a more general way, it represents the decision-making point to place or not a recovered product (MA or part) in inventory. This decision is made according to stock levels, which have been determined by long-term forecasts, and the general state of the MA. The generic steps of this portion of the operational process of recovery and processing are now briefly introduced. First, in order to decrease the workload for the valorization shop and as the decision for the processing of some MA models is known immediately, it is suggested that a list of predetermined alternatives be elaborated and regularly revised. Certain obsolete generations of MAs would then be directed towards recycling or wheelchair models of a supplier in bankruptcy, for example, could be systematically disassembled for parts to repair those in circulation. In this way, the mechanic will not be required to grade and sort all recovered MAs. The employee in charge of the recovery of the wheelchair will know, by means of this list of guidelines for the processing of a particular model, where to direct it and the appropriate warehousing space.

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Fig. 2. Management of the recovery and the processing of the QRI activities by a push–pull approach [7].

Before processing the recovered MAs, a detailed evaluation of the activities required for an MA dedicated to one of the valorization alternatives will have to be completed. This information will be noted on an evaluation form. The aim of this evaluation is to ensure that the most appropriate decision is taken. When it is difficult to immediately choose a processing alternative from the consideration of stock levels, the overall state of the MA or the list of predetermined alternatives, an evaluation will be completed following the possibilities of asset recovery. The possible reuse of the MA in its original form will first be considered. If this first alternative is not appropriate, the possible dismantling of the recovered MA for the recovery of its parts (cannibalization) will be investigated. The possibility of recycling, which is not considered in the current context, can also be foreseen. The above mentioned evaluation (evaluation form), in view to a possible reuse of the MA, will indicate the parts to replace or to repair in order to refurbish it, without regards to the needs of the eventual customer. In addition to costs associated with the required material resources, the mechanic will determine the costs for labor by specifying the standard time required for each operation to be completed. A lower and upper limit will then be given according to the subsequent repairing activities that use either all

valorized or all new parts. This information is significant since, at the present, the total cost for the valorization of an MA dedicated to reallocation has to be under a limit fixed by the RAMQ. At this point, when the mechanic considers the option of cannibalization, the technical specifications of the wheelchair and the evaluation form will allow the mechanic to identify parts which can be recovered. The cannibalization alternative necessitates that after the mechanic identifies parts which can be recovered, he or she will estimate the costs and benefits that those activities could generate. By examining the stock levels for each part in good condition and evaluating costs associated with the dismantling time, the mechanic will then be able to determine if this option is feasible. If cannibalization is appropriate, the mechanic will begin the disassembling sequence. After this planning stage, the mechanic will continue with the processing of the wheelchair according to the information on its evaluation form. However, for MAs intended for reallocation, few modifications will be done at this stage, since the configuration of the MA will be adjusted to the requirements of the future customer. Before being placed in stock, the MA will be cleaned and only critical parts that affect appearance, will be replaced, primarily using valorized materials. The other parts to

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be replaced or repaired will be identified according to the evaluation form and the form will be updated following these minor adjustments. In this way, MAs will be oriented in their life cycle by choosing the alternative which best respects the sorting criteria (first push–pull approach). However, some MAs intended for reallocation could also be reoriented towards another alternative. For example, an obsolete MA could be disassembled if it has been in the warehouse too long or when the stock levels of valorized parts of some of its components are too low. 3.2.1.2. ‘‘Pull portion’’. The pull portion represents the retrieval of a product from stock following a specific order (Fig. 2). Valorization activities, specifically with the reallocation of a recovered wheelchair, require adjustment of the MA according to the needs and expectations of the customer. To reallocate an MA to a customer, without significant costs related to adjustments, we propose that the occupational therapist has access to the technical specifications and the evaluation form of the MA. After retaining the MA for the customer (who is admissible under RAMQ criteria), the occupational therapist will then proceed to planning the required valorization activities. The therapist will specify the desired modifications, in regards to dimensions and constitutive parts, to the mechanic at the valorization shop for a personalized valorization. With the identified needs of the occupational therapist and the evaluation form of the MA, the mechanic will then be able to estimate the necessary costs, in terms of parts and labor, for the personalized valorization. Then, the mechanic will reserve or order the required materials and will indicate the standard times necessary to complete the additional adjustments to the MA, while taking account the repair actions indicated on the evaluation form. In order to reduce costs, the use of valorized parts will be favored. With this information concerning the necessary parts and the adjustments needed for the device, a total cost can be calculated. In this way, this evaluation will respect the valorization cost limit imposed by the RAMQ. The necessary procedures will begin when the occupational therapist authorizes the evaluation. The process will be cancelled otherwise.

Before the adjustment of the MA, a final verification of stock levels will be made in order to replace new parts by similar valorized parts that were not available when the activities were originally planned. The aim is to increase the inventory turnover of valorized materials and to have an improved rate of asset recovery with the valorization of MAs. Although these concepts should allow a fluid progress of QRI activities, they would be more effective with an adequate information system and decision-support tools. 3.2.2. An information system architecture for the context of the QRI The suggested organizational structure will be more efficient and effective if information is adequately collected and can be easily accessed. Although the suggested changes concern only recovery and processing activities, the current methods of the QRI will be changed to allow for better planning of valorization activities. A complete data warehouse related to the activities of the QRI will thus be established. Also, approaches elaborated for valorization activities will be adapted for others activities, such as the evaluation of the adjustments needed for an MA before maintenance activities are carried out. An information system architecture has been developed to integrate QRI activities and to allow the follow-up and control of operations and products. This architecture is an object-oriented model developed with the unified modeling language (UML) (see Figs. 3–6) [24,25]. It has three principal sections:  Follow-up of the internal and external actors: Customers. Suppliers. Payer organisms. Establishments and their employees. Subcontractors.  Follow-up of the operational process: Allocation. Maintenance. Recovery and processing. Purchasing. Procurement.  Follow-up of the products: MAs. Parts.

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Some functionalities of this information system architecture are similar to those of the current one. However, the suggested system takes into account the valorization context to provide better coordination of all activities. In place of a simple database, this information system will support employees in their functions by allowing the planning of their activities according to collected information about products and the context of the organization, and will simplify exchanges between employees. This is important owing to the fact that numerous employees are generally involved in a single operational process and must have access to complete information about the circumstances met, notably about MA without constantly rechecking it. The principal classes of the information system architecture are summarized in Table 1 and some of its principal functionalities will be detailed in the following sections. 3.2.2.1. Follow-up of products through their life cycle. With products that must be perfectly adjusted to customer needs, which can change over time, and with products that can be reintroduced into the market following valorization activities, it is necessary to keep track of the condition of the product. This ensures the quality of products and services offered and satisfies customers from both a clinical and technical point of view. In fact, information concerning the technical specifications (constitutive parts, dimensions, age, etc.) of a wheelchair is necessary for the various decisions made to ensure effective and efficient operational processes at the QRI (allocation, maintenance, recovery and processing of recovered MAs). However, this information cannot be accessed quickly nor does it provide enough details at the time of activities with the present information systems. Another desired outcome is to follow products (parts and MAs) through their life cycle, in order to give employees a complete data warehouse which will allow them to take appropriate actions (see Figs. 3 and 4). With this in mind, we suggest that each MA be tracked by the information system. A Technical form will track the MA and specify its parts (used part) and Characteristics, such as dimensions. Data will be initially gathered by the occupational therapist at the first allocation of the MA and updated during its life cycle, through its maintenance and valorization

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activities. A new technical form will be created for each owner who takes possession of the MA to preserve its history. The various life cycle phases of the MA (MA life cycle phase) will be attached to this document, which will make possible to locate it quickly. These phases are outlined as follows:  MA of reference: the MA is allocated to a customer.  MA dedicated to reallocation or internal loans: the MA is placed in inventory at the QRI.  Disassembled, recycled or disposed MA: the MA has reached the end of its life cycle. Parts uses a similar follow-up process, for the most critical one, for the different phases of their life cycle (part life cycle phase), which will also be stored in the information system. When these parts are in one of the QRI warehouse following their acquisition at the supplier, they will be listed as a new part in the information system. Valorized parts will be listed as such once they have been recovered from an MA before being put in inventory. When a part is on an MA, it will be listed as a used part. Following the operation, the recovered parts, only those in good condition, would be added to valorized stock, while others will be added to the stock corresponding to recycled or disposed parts. With this follow-up of the parts, it will be possible to estimate their period of use. The residual life cycle and, consequently, the reliability of parts and the MA can then be evaluated throughout their useful life. 3.2.2.2. Activities planning. With complete product information, it will be easier to plan activities and therefore increase the availability of required resources. Before beginning an operational process, such as maintenance, the appropriate actions will be defined; some of which will hopefully prevent ulterior adjustments. This approach will give an optimal exploitation of products through their life cycle. No matter the operational process, activities planning will be made, in a similar manner as that explained in the ‘‘push–pull’’ approach section, with a digitized Work sheet on the information system (see Fig. 5). For each action, a line will be added on the work sheet, which will represent at this stage the evaluation form. From these lines, the employee will access product inventories (MAs and spare parts) (product)

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Table 1 Description of the principals classes of the information system architecture and comparison with the current information systems [7] Principals classes

Customers Customer record [customer] Appointment Employee line

Products Type of part Part Part life cycle phase: new, valorized, used, recycled/disposed parts Stock of new, valorized, used, recycled/disposed parts MA model MA MA life cycle phase: MA of reference, MA for reallocation or internal loan, disassembled/recycled/disposed MA Stock of MA of reference, MA for reallocation or internal loan, disassembled/recycled/disposed MA Technical form Line of the actual technical form Line of the wanted technical form Characteristic Interventions Type of operational process and operational process

Step

State of the class (vs. the current systems and that of the QRI [])

Stored information about the customer (contact information, disability, etc.) Integration of the functionalities of management of appointments in the course of the operational processes Verifying of the availability & planning of an appointment for a given employee Conservation of the notes of the occupational therapist taken at the time of the evaluation of the customer condition

Unchanged [unchanged]

Generic description of a part Follow-up of a part through its complete life cycle Indication of the life cycle phase of the part and cumulation of its history Indication of the stock level according to the life cycle phase

Unchanged [modified] Unchanged [new] – [new]

Unchanged [modified] New [new] New [new] New [new]

Description of a MA model Follow-up of a given MA for all its useful life Indication of the life cycle phase of the MA and cumulation of its history

Unchanged [modified] New [new] New [new]

Indication of the stock level according to the life cycle phase

New [new]

Indication of the technical specifications of an MA belonging or having already belonged to a customer Specification of the real configuration of the MA (used parts or characteristics) Specification of the wanted configuration of the MA (used parts or characteristics) for later adjustments Description of a dimension for MAs

New [new]

Follow-up of the sequence of steps for a given operational process, link between the customer record and that of products and regrouping all the documents generated at the time of the activities Designation of a step of an operational process, follow-up of the information exchanges between employees and of the progression of the operation

New [new] New [new] Unchanged [new] Unchanged [new]

Unchanged [new]

M. Chouinard et al. / Computers in Industry 56 (2005) 105–124

Customer evaluation

Justifications

Unchanged [new] Establishment, department, kind of employee, employee

Subcontractor

Unchanged [new]

Unchanged [modified]

Follow-up of the interactions with the suppliers and the payer organism Description of the relations with the subcontractor and follow-up of the activities carried out in the name of establishment Description of the establishment Collaborators Supplier, payer organism

Unchanged [unchanged] Follow-up of the material and information flows between the various collaborators

Unchanged [new] New [new]

Contractual and standard activity Recovery Transactions Purchase order and purchase order line, invoice

Work sheet and work sheet line

Planning the activities (evaluation of the duration, reservation or order of the materials), follow-up of the adjustments on an MA and update of its technical form Description of a contractual or standard activity Follow-up of the recovery procedures of an unused MA

Unchanged [modified]

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and a list of standard activities (activity, Standard), which will specify the estimated labor time for a given task. Activities planning will then be based on costs or profits met for a given operation in terms of the human and material resources required. In addition to the actions determined by the employee, generally a mechanic, activities will also be undertaken following the condition of the MA and the stock levels of the establishment to simplify this planning. The residual life cycle of parts stored by the suggested information system will make it possible to systemize this approach, which can be regarded as an opportunist approach. With regard to the utilization of materials, the considered information system will first suggest, whenever possible, the use of valorized materials and then the use of new materials. For situations when products are not available at the establishment, a Purchase order will systematically be produced. Moreover, the decision to place or not a recovered part or MA in inventory will be based on inventory levels and the product’s residual life cycle. Such activities planning gives a better determination of costs and profits of a given operation and respects quality standards adopted by the establishment and will hopefully result in a reduction of service delays. 3.2.2.3. Follow-up of operational processes. Once launched, the appropriate course of the operational process has to be ensured. These processes generally require the participation of different employees and follow a particular sequence of steps according to the situation. However, these sequences are often not well defined for the employees and information exchange is not always efficient with the current approach. To avoid these difficulties, each operational process will be tracked step by step by the information system, which will notify the appropriate employee at the right time. The suggested information system will then guide employees in their tasks by automating the exchange of documents according to the information generated by the system at the time of activities and information provided by the employee. In this way it will be possible to follow the progression of the operations. According to the kind of operational process taken (allocation, maintenance, recovery and processing of MAs, purchasing, procurement), a main document will be generated, called operational process, to gather

Fig. 3. Section relating to the follow-up of the products through their life cycle of the information system architecture – part 1.

118 M. Chouinard et al. / Computers in Industry 56 (2005) 105–124

Fig. 4. Section relating to the follow-up of the products through their life cycle of the information system architecture – part 2.

M. Chouinard et al. / Computers in Industry 56 (2005) 105–124 119

Fig. 5. Section relating to the planning and follow-up of the activities of the information system architecture.

120 M. Chouinard et al. / Computers in Industry 56 (2005) 105–124

M. Chouinard et al. / Computers in Industry 56 (2005) 105–124

all the other documents created for the given sequence of activities. This main document ensures the link between the customer record (customer) and those of the MA, more specifically the MA of reference. Also,

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the suitable employee will be contacted at the appropriate stage in the operational process [step in progress]. Thus, the course of the operational processes will be closely followed (see Fig. 6).

Fig. 6. Section relating to the planning and follow-up of the operational processes of the information system architecture.

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M. Chouinard et al. / Computers in Industry 56 (2005) 105–124

3.2.2.4. Follow-up of the efficiency of activities of the QRI. With the addition of activities related to the recovery and processing of recovered MAs, it is essential to set up a method to evaluate their efficiency and impact on current activities. Additional information must be collected to ensure an effective and efficient management of the operational processes of the QRI. A closer follow-up of activities and products through their life cycle will make it possible to attain such objectives, while supporting continuous improvement. Information related to expenses and profits will be reported by the work sheet, such as presented in the preceding section (see Fig. 5). The actual time necessary to perform an action will also be specified on the work sheet by the employee. Then, using these real times, it will be possible to re-examine the list of standard times of activities [activity, standard] so as to better reflect the current context of the establishment and to allow more appropriate planning. These times will also help determine the value of valorized materials and potential profits. The collection of other information is also relevant. The circumstances surrounding the return of a device are something that should be indicated. This explains the recovery document in the recommended information system. This document will specify the return mode (voluntary return, subcontractor, emergency service of the establishment), the reason for the return (replacement of the MA, death of the customer, etc.) as well as the costs and delays incurred in the recovery of the MA. Since the customer or family member could be contacted in order to recover the MA, this document could be related to procedures surrounding the management of Appointments. Additional costs and benefits generated by the recycling or the disposal of the MA or its parts must also be indicated. This information will be collected by lots of MAs which are devoted to either recycling or disposal [lot of disassembled, recycled or disposed MA] as well as the stocks of parts to be recycled or disposed [stock of recycled or disposed parts]. The expenses for the recycling or disposal and/or the given value for the material through recycling will be reported in these documents. This will hopefully provide more details about recovery and processing activities (see Figs. 3, 4 and 6). With this information, the strategies of the QRI could then be revised to take into account the

exploitation of a product through its entire life cycle in an effective and efficient manner. The strategies related to inventory control, maintenance, recovery and even to valorization could then be evaluated so as to ensure an adequate level of service to customers, while reducing costs. Moreover, to contribute to the profitability of activities at the QRI, recommendations that are supported by data could be given to the payer organism, in particular the RAMQ, and to the suppliers of wheelchairs and spare parts. All actors will then be able to work in collaboration to ensure adequate quality of products and services to customers. Although the information system architecture was developed for the specific context of the QRI, various suggested functionalities, such as the follow-up of products through their life cycle, can be generalized for various other applications.

4. Conclusion To benefit from the complementary nature of material and information flows of the supply chain and reverse logistics, a total network vision should be used to improve the coordination and collaboration among the various actors. To better harmonize the supply (return of products) with the demand, two ‘‘push– pull’’ approaches were proposed. Their aim is to ensure a better control of the costs and profits resulting from the reintroduction of the valorized products in the market, and this, taking into account a variety of criteria adopted by the organization. However, these approaches require that the operational processes are adequately defined and that the additional activities are correctly integrated into current activities and assigned to the suitable actor. They also require complete information about products (constitutive parts, condition, etc.) and the state of the network (order, inventory level, etc.). This explains why it is important to support and control all the activities of the organization in order to optimize the use of the products through their life cycle, while respecting the quality standards fixed by the organization. A closer follow-up of the operational processes and products through their life cycle is essential so that complete information can be collected and exploited during the course of activities. Continuous improvement could also be realized by the organization through more

M. Chouinard et al. / Computers in Industry 56 (2005) 105–124

efficient and effective operations. In fact, the integration of reverse logistics within the regular supply chain aims to improve the efficiency and the efficacy of the entire logistic network and, in this way, meet or even anticipate the pressures exerted by the environment (government agencies, competitors, customers, actors of the supply chain). For the Quebec Rehabilitation Institute situation, this perspective was used to develop the new organizational structure and information system architecture, although the activities of recovery and processing of recovered products are currently done at a local level. The aim of this business process reengineering is to improve the management of the establishment with the better integration of activities related to reverse logistics and their current activities. These suggestions can also be extended to the other rehabilitation centers in the Province of Quebec and could even be applied in a network context. After considering each rehabilitation center, additional activities would need to be correctly allocated within the network to ensure an adequate level of service to customers, all the while reducing the set up and operation costs. The information system architecture will assist in the operation and control of this extensive logistic network. However, the section relating to the follow-up of the collaborators (internal and external actors) will need to be elaborated. Then, it will be possible to compile a Provincial inventory of products (MAs and spare parts) in good quality, both new and valorized, to improve their accessibility and to further reduce the costs and delays met in the course of services. Steps are currently being taken to consider this perspective of a logistic network.

Acknowledgements The research work reported here was completed thanks to the financial support of the Natural Sciences and Engineering Research Council of Canada (NSERC) (Collaborative Health Research Projects). The authors would also like to thank the management of the Assistive Technology Department of the Quebec Rehabilitation Institute, the management of the programs outside Quebec and Technical Aids Program of the Re´ gie de l’assurance maladie du Que´ bec as well as the Socie´ te´ de l’assurance

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automobile du Que´ bec for their contribution to this work.

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Marc Chouinard is a PhD candidate in mechanical engineering at the Universite´ Laval and member of the CENTOR and CIRRIS. He has an MSc in mechanical engineering. He is also a research assistant on the mobility aids valorization project. His research interests lie mainly in the fields of the reverse logistics and the design of logistics networks.

Sophie D’Amours holds a PhD in applied mathematics and industrial engineering from the E´ cole Polytechnique of Montre´ al, as well as an MBA and a BSc in mechanical engineering from Universite´ Laval. She is currently a Director of Research and Administration of the FOR@C Research Consortium and holds a Canada Research Chair. She is a professor in the Faculty of Science and Engineering, Department of Mechanical Engineering, at the Universite´ Laval for the past 7 years. She participated in the creation of the Network Organization Technology Research Center (CENTOR) in 1996 and was Co-director of this research center for 5 years. She is also involved in the mobility aids valorization project. Her research interests are in supply chain management, reverse logistics and ebusiness. Daoud Aı¨t-Kadi holds an MScA and a PhD in computer science and operational research from the E´ cole Polytechnique of Montre´ al. He worked as an assistant professor from 1980 to 1985 at the E´ cole Polytechnique and at the Universite´ du Que´ bec (UQAM) in Montreal, before being hired as a permanent professor at the Universite´ du Que´ bec (UQTR) in Trois-Rivie`res, where he remained until 1990. It is at this time that he came to the University Laval, in Quebec City, to teach at the Mechanical Engineering department. A year later, he became director of the Industrial Engineering graduate program, a position which he has held successfully up to this present day. In 1996, he acted as a resource person in the creation of the Network Organization Technology Research Center (CENTOR), which he has been co-directing since May 2002. Also, he has been supervising for the past 4 years an important project on reverse logistics, on a mobility aids valorization project, which involves another research center from Universite´ Laval, the Centre for Interdisciplinary Research in Rehabilitation and Social Integration (CIRRIS), for which he is an associated member. His main research interests include maintenance and reliability of system, the design and control of logistics networks, sustainable development and reverse logistics. Overall, he has cumulated 7 years of industrial experience and more than 24 years of teaching and research experience.