General Motors Company · NYSE:GM

General Motors — Technical Presentation (December 2005)

26 slides from General Motors's technical presentation, Dec 9, 2005

  1. Slide 1: E-Business and Reverse Logistics

    E-Business and Reverse Logistics Mark S. Daskin, Kristin Sahyouni and R. Canan Savaskan Northwestern University, Evanston, IL 60208 USA GM ISL WORKSHOP ON FRONTIERS OF E-BUSINESS Bangalore 8-9 December 2005 Outline of the talk Overview of e-commerce and reverse logistics Integrated forward/reverse l

  2. Slide 2: What is Reverse Logistics?

    What is Reverse Logistics? Suppliers Manufacturers Distribution End-Users Forward Flow Reverse Flow The process of planning, implementing, and controlling all logistics activities to collect, disassemble, and recover “used” products, product parts, and/or materials in an efficient, economically sust

  3. Slide 3: Another look at reverse logistics

    Another look at reverse logistics electronics, paper recycling computer construction waste equipment clothing, auto parts books © Majumder, 2005 GM ISL Workshop on Frontiers of E-Business India Science Lab Logistics network design decisions Logistics Network Design Decisions © Majumder, 2005 GM ISL

  4. Slide 4: Designing a Reverse Logistics Strategy depends on …

    Designing a Reverse Logistics Strategy depends on … Nature of product returns : Push vs. Pull Commercial Returns Legislation Driven Warranties Recycling / remanufacturing Repairs Profit potential Driven Contractual Agreements Inbound Quality Defects PUSHED to RL PULLED via RL GM ISL Workshop on Fron

  5. Slide 5: Size of the Commercial Returns Problem

    Size of the Commercial Returns Problem Value of returned goods is $60 billion, annually in the U.S. An additional $40 billion dollars spent on reverse logistics Web returns alone cost between $1.8 and $2.5 billion in 2002. Source: Enright (2003) GM ISL Workshop on Frontiers of E-Business India Scien

  6. Slide 6: WEEE Directive covers a large group of products

    WEEE Directive covers a large group of products… • Large household appliances • Small household appliances • IT and telecommunications equipment • Consumer equipment • Lighting equipment • Electrical and electronic tools • Toys, Leisure and sports equipment • Medical Devices • Monitoring and Control

  7. Slide 7: Why e-commerce and reverse logistics?

    Why e-commerce and reverse logistics? Reverse logistics (closed loop supply chain) is critical in any modern logistics system Particularly relevant with e-commerce Increased rate of customer returns Entire business models based on reverse logistics (Netflix – DVD rentals) GM ISL Workshop on Frontier

  8. Slide 8: Life Cycle Considerations

    Is there any value in Integrated Forward/Reverse Logistics Design ? “Can we show that in many cases one needs to design the forward SC together with the reverse one over the lifecycle of the product?” Presentation by V. Daniel R. Guide, Jr. and Luk N. Van Wassenhove entitled, “The Evolution of Close

  9. Slide 9: Remainder of the talk: Review: Fixed Charge Location Model

    Remainder of the talk Overview of e-commerce and reverse logistics Integrated forward/reverse location models (formulation, solution algorithm) Application of models to India When does integration matter? Future research GM ISL Workshop on Frontiers of E-Business India Science Lab Review: Fixed Char

  10. Slide 10: Integrated model with cost incentive for co-location

    Review: Fixed charge location model Min ∑ f j X j + ∑ ∑ hi cij Y ij Fixed plus transport j i j costs S.t. ∑ Y ij = 1 ∀i j Each demand assigned Y ij − X j ≤ 0 ∀i, j X j ∈ {0,1} ∀j Only to open sites Y ij ≥ 0 ∀i, j Integrality Non- Non-negativity GM ISL Workshop on Frontiers of E-Business India Scienc

  11. Slide 11: Lagrangian relaxation: Relax assignment constraints

    Lagrangian relaxation: Relax assignment constraints Opt ∑ f j X Fj + ∑ ∑ (hi cij − λ ij )Y ijF + ∑ β f j X Rj + ∑ ∑ (α hi γ cij − µ ij )Y ijR j i j j i j + ∑ ∑ λ ij + ∑ ∑ µ ij − ∑ s j X cj i j i j j S.t. Y ijF − X Fj ≤ 0 ∀i, j Y ijR − X Rj ≤ 0 ∀i, j X Fj ∈ {0,1} ∀j X Rj ∈ {0,1} ∀j Y ijF ≥ 0 ∀i, j Y

  12. Slide 12: Algorithm summary

    Must have at least one of each 1. ∑ X Fj > 0 but ∑ X Rj = 0 (Forward, but no reverse) j j a. Find best reverse to add to existing forward b. Find best stand - alone reverse c. Find best new joint facility PICK BEST OF THOSE THREE 2. ∑ X Fj = 0 but ∑ X Rj > 0 (Reverse, but no forward) j j 3. ∑ X Fj =

  13. Slide 13: Data for India

    Data for India Population of 446 large cities (~155,365,000 people or about 14% of India’s 1.1 billion people) Missing Pimpri and Kalyan in Maharashtra with combined population of 2.547 million All other cities of 1 M or more Largest – Bombay: 12.692 million Midsized – Bangalore: 4.931 million Small

  14. Slide 14: Example from India

    Example from India 9 Forward sites; 22 Reverse sites; 7 Joint sites National Oceanographic and Atmospheric Administration http://oas.ngdc.noaa.gov/mgg/plsql/extract.search_screen?p_lat_min=3.5&p_lat_max=36.0&p_lon_min=64.5&p_lon_max=97.5 GM ISL Workshop on Frontiers of E-Business India Science Lab S

  15. Slide 15: Reduced return transport cost and increased return rate scenarios

    50% reduced return transport cost 9 Forward sites; 14 Reverse sites; 8 Joint sites Fewer reverse sites GM ISL Workshop on Frontiers of E-Business India Science Lab 60% increase in return rate 9 Forward sites; 29 Reverse sites; 6 Joint sites More reverse sites GM ISL Workshop on Frontiers of E-Busine

  16. Slide 16: Forward dominant model

    50% increase in reverse facility fixed cost 9 Forward sites; 16 Reverse sites; 9 joint sites Fewer Reverse sites; More joint sites GM ISL Workshop on Frontiers of E-Business India Science Lab Forward dominant model Min ∑ f j X j + ∑ ∑ hi cij Y ij + ∑ β f j X Rj + ∑ ∑ α hi γ cij Y ijR F F j i j j i j

  17. Slide 17: Reverse dominant model

    Reverse dominant model Min ∑ f j X j + ∑ ∑ hi cij Y ij + ∑ β f j X Rj + ∑ ∑ α hi γ cij Y ijR F F j i j j i j S.t. ∑ Y ijF = 1 ∀i ∑ Y ijR = 1 ∀i j j Y ijF − X Fj ≤ 0 ∀i, j Y ijR − X Rj ≤ 0 ∀i , j X Fj ∈ {0,1} ∀j X Rj ∈ {0,1} ∀j Y ijF ≥ 0 ∀i, j Y ijR ≥ 0 ∀i, j X Fj − X Rj ≤ 0 Forward is Forward Model

  18. Slide 18: Integrated vs. Sequential or Independent Decisions

    Integrated vs. Sequential or Independent Decisions Integrated – Based on Sequential or independent models outlined above 1. Forward dominant: locate forward first then reverse given forward 2. Reverse dominant: locate reverse first then forward given reverse 3. Co-location: locate forward and revers

  19. Slide 19: Measuring similarity between sites

    Measuring similarity between sites in Xm and Xn Cost of “moving” moving” ∑ ∑ cij Z ij facilities Min i∈ X m j∈ X n S.t. ∑ Z ij ≥ 1 ∀j ∈ X n Each facility in i∈ X m Xn assigned ∑ Z ij ≥ 1 ∀i ∈ X m j∈ X n Each facility in Xm assigned Z ij ≥ 0 ∀i ∈ X m , j ∈ X n Non- Non-negativity GM ISL Workshop on F

  20. Slide 20: Similarity Measure and Computational Study

    Similarity Measure Solution 1 Solution 3 0 of 4 locations in common Total difference between solutions (in miles) = 190 New York 81 Allentown Chicago 86 Milwaukee Los Angeles 7 Burbank Houston 16 Pasadena GM ISL Workshop on Frontiers of E-Business India Science Lab Computational Study Network Design

  21. Slide 21: Computational Study

    Computational Study Data Sets: 263 Nodes 150 Nodes GM ISL Workshop on Frontiers of E-Business India Science Lab Test cases Each parameter level computed for LL, LH, HL, HH levels of other parameters = 4•(100 + 100 + 100) = 1,200 parameter combinations 3 models / 2 data sets / 2 formulations = 3•2•2•

  22. Slide 22: Summary Results

    Summary Results Solution Time (sec) Optimality Gap Model Data Set Average Maximum Average Maximum Forward 150 nodes 0.84 16.68 0.01% 0.10% Dominant 263 nodes 5.24 104.16 0.00% 0.08% Reverse 150 nodes 0.65 2.55 0.00% 0.07% Dominant 263 nodes 6.49 12.05 0.00% 0.05% Co-Location 150 nodes 0.93 6.85 0.01

  23. Slide 23: Forward Dominant Results

    Forward Dominant Results Impact of Gamma on Value of Integration 35% 30% 25% Percent Difference Low alpha; low beta 20% Low alpha; high beta 15% High alpha; low beta High alpha; high beta 10% 5% 0% 0 1 2 3 4 5 6 Reverse/Forward Transportation Ratio As reverse transport becomes more expensive Integra

  24. Slide 24: Forward Dominant Summary and Reverse Dominant Summary

    Forward Dominant Summary 1. For large reverse fixed costs and high reverse transport costs, integrated approach is advantageous 2. When reverse fixed costs and transport cost ratios are small (<0.5), sequential approach is satisfactory GM ISL Workshop on Frontiers of E-Business India Science Lab Rev

  25. Slide 25: Co-location Model Results and Future Research

    Co-location Model Results 1. Value of integration increases slightly with reverse/forward fixed cost ratio (up to 3.5%) 2. Highly similar forward networks 3. Slightly dissimilar reverse networks GM ISL Workshop on Frontiers of E-Business India Science Lab Future Research 1. Integrated model over tim

  26. Slide 26: Final thoughts

    Final thoughts …. U.S. Online Retail Sales to Reach $130 Billion by 2006, $104 Billion in 2005 http://retailindustry.about.com/library/bl/q2/bl_jup052201.htm $104 Billion is That’ That’s a LOT 0.15% of first 10 of money! months of 2005 Wish I had that! U.S. retail sales Get the fundamentals right; t

General Motors Company — Technical Presentation (December 2005) on 6ix