This chapter aims at enhancing the scientific knowledge in reverse transportation by focusing on how returns in reverse systems can be effectively transported to offshore destinations. The authors argue that transportation action requires the seaport terminal actors to implement a set of coordination mechanisms. These mechanisms should coordinate both the physical flows (the movements of returns) and the commercial interests (control, services, etc.) because it has a direct impact on the performance of the reverse system. The chapter starts with an introduction about the issue of transhipping the remanufacturable used products to their offshore destination. Then, the related studies dealing with the similar problems are discussed in the background section. Next, the focal problem of this chapter is stated in the problem statement section. A detailed description about the approach (i.e., agent-based modelling and simulation) can be found in the proposed methodology section. Right after this, an illustrative example is explained in the experimental study section. The potential research directions regarding the main problem considered in this chapter are highlighted in the future trends section. Finally, the conclusion drawn in the last section closes this chapter.
TopIntroduction
The role of reverse transportation, is essential and often supported by specific facilities. It can be of two different main types: collection centres (i.e., facilities where customers hand in used products) and recovery/remanufacturing facilities (i.e., facilities where returned products are remanufactured). For example, transit of returned goods from end users to the collection centres and/or shipping the remanufacturable products to the processing service centres. In recent history, a phenomenon where critical activities are relocated to the low-cost offshore locations are received attention in the popular press and from academic researchers because of the potential path to price reduction and increased flexibility. The objective of offshore strategies is to incorporate “available” worldwide resources within the company’s integrated value-adding system. Moreover, A.Y. Lewin and Couto (2007) suggested the process of offshoring is no longer only about cost-saving in relocating codified tasks, but it is increasingly concerned with strategically important and knowledge intensive tasks.
In terms of offshore remanufacturing, the general idea is that the low-wage offshore locations may provide a lower remanufacturing cost without a significant difference in quality (Venkatraman, 2004). For example, General Motors and Toyota can be considered forerunners in this area; Caterpillar is another illustration, together with the remanufacturing facility in United States, Mexico, Europe and China, they has opened a new, regional centre in Singapore in 2011 for remanufacturing components for large off-highway trucks and other mining equipment. “Ultimately, it enables us to better partner with our dealers and customers to provide a low-cost repair option that reduces downtime, improves equipment availability and drives down operating costs,” stated Mark DuBois, the Singapore facility manager. In these circumstances, they perform business activities abroad to structure a competitive advantage and in consequence the global supply chain makes an appearance as an important factor, but also presents many unique processing challenges compared to a domestic facility location. For example, transshipping used products to remanufacturers’ offshore facilities is one such example that deserves a careful attention, since most time-sensitive used products are particularly vulnerable to return delays (Guide, Souza, Wassenhove, & Blackburn, 2006).
So, offshore remanufacturing, the marriage of offshore efficiency and production process efficiency, has remained a largely untapped opportunity, i.e. it is not obvious how this strategy come about. Rather, it is often argued to be a void in the extant literature. In this chapter, we explore how offshore remanufacturing is achieved in transportation systems with a special focus on the transfer efficiency of seaport container terminals, since most overseas shipping of collected components (such as furniture, auto parts and electronics) currently is done via standardized steel containers aboard deep-sea container vessels (Petering, 2011). Thus, from the viewpoint of a remanufacturer who is engaged in an offshore remanufacturing business, eliminating postponement generated at container terminals is among several top proprieties.