The Impact of Networked RFID on Product Remanufacturing · The Impact of Networked RFID on Product...
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The Impact of Networked RFIDon Product Remanufacturing
Anand [email protected]
Doctoral Student (Final Year)Cambridge Auto-ID Labs
United Kingdom
10 October 2005
Overview
• Who we are• What we do• Research focus and aim• Product remanufacturing: Current scenario• Product Information requirements for product remanufacturing• Product remanufacturing: Networked RFID scenario• Quantifying benefits of networked RFID in remanufacturing• Findings• Concluding remarks
Who we Are
MIT USCambridge UK
St. GallenSwitzerland
Fudan China Keio Japan
ICU South Korea
Adelaide Australia
A global network of academic research laboratories in the field of RFID
What we do
Business Processes and Applicationse.g. Retailing, Product end-of-life management, Anti-counterfeiting
Lead Labs: Cambridge, MIT, Keio, St. Gallen
Software and NetworkDevelop future architecture of EPC Network
Lead Labs: Cambridge, MIT and Keio
HardwareDevelopment of higher tags and enhancement of read rates
Lead Labs: MIT and Keio
To investigate practical and economic feasibility of networked RFIDsystems in product remanufacturing.
Manufacturing
Product Recovery Management
Research Focus and Aim
Retailing Product End-of-life
What is the availability and requirements of product returns information during product remanufacturing?
How can we provide requisite product returns information for improving product remanufacturing process?
How can we quantify the impact of ready availability of product returns information on product remanufacturing?
Research Questions
What is the availability and requirements of product returns information during product remanufacturing?
How can we provide requisite product returns information for improving product remanufacturing process?
How can we quantify the impact of ready availability of product returns information on product remanufacturing?
Research Questions
Collection Centre
Product Returns
ProductDemand
Visual Inspection
Recycle
Product Yield
Disassembly
Cleaning andTesting
Recycle
ComponentYield
Product Assembly And Testing
External supplier
Remanufacturing Facility
Product Remanufacturing
Collection Centre Visual
Inspection
Product Returns
ProductDemand
Recycle
Product Yield
Disassembly
Cleaning andTesting
Recycle
ComponentYield
Product Assembly And Testing
External supplier
Remanufacturing Facility
Product Remanufacturing Product Information
Product TypeQuantityPhysical conditionNumber of copies
Product Information
Product TypeQuantityAssembly BOM
Product Information
Product TypeQuantityCurrent BOMPhysical conditionNumber of copiesEstimated comp. yield
Product Information
Product TypeQuantityCurrent BOMPhysical conditionNumber of copiesActual comp. yield
Collection Centre Visual
Inspection
Product Returns
ProductDemand
Recycle
Product Yield
Disassembly
Cleaning andTesting
Recycle
ComponentYield
Product Assembly And Testing
External supplier
Remanufacturing Facility
Product Remanufacturing
How much to buy from external suppliers
What fraction of demandwill be satisfied fromreturned products?
InventoryDecisions
Product uncertaintiesProduct yieldComponent yield
Product InformationProduct returns historyPart failure history
No information available about quality of returned products. Components missing Quality of components
Holding and shortage situations are very common due to lack of returned product information.
High remanufacturing costs due to uncertain yield of returned products.
Current Remanufacturing Issues
Quality of Product Information Requiredfor Product Remanufacturing
UniquenessEnables to identify each product/component uniquely throughout its lifecycle and across whole supply chain.=> Variety of products=> Customised products
Quality of Product Information Requiredfor Product Remanufacturing
TimelinessEnsures that information is readily available for decision-making andproduct/component recovery with minimal need for costly inspection and testing.
Value
Decision – Cost/Revenue
Time
Threshold
Quality of Product Information Requiredfor Product Remanufacturing
Completeness Ensures that all relevant information is available for effective recovery of products/components.
AccuracyReduces or eliminates discrepancies between current state of a product/comp. and the estimated state of the product/comp. given by information.
What is the availability and requirements of product returns information during product remanufacturing?
How can we provide requisite product returns information forimproving product remanufacturing process?
How can we quantify the impact of ready availability of product returns information on product remanufacturing?
Research Questions
The role of Networked RFID inRemanufacturing
D584.S421.CC21.AA21D584.S421.CC21.A22
D584.S421.CC21.AA23
D584.S421.CC21.AA24
D584.S421.CC21.AA25
RFID Tag
Look up Directory
Networked RFID for ProductLifecycle Information Management
Database1. Model/Type2. BOM3. Disassembly4. Reliability
Manufacture Sales Usage/Maintenance Remanufacturing
Manufacture Sales Usage/Maintenance Remanufacturing
Look up Directory
Networked RFID for ProductLifecycle Information Management
Database1. Model/Type2. Assembly BOM3. Disassembly4. Reliability
Database1. Date of Sale2. Customer Detail3. Transaction ID4. Warranty Detail
Look up Directory
Networked RFID for ProductLifecycle Information Management
Database1. Model/Type2. BOM3. Disassembly4. Reliability
Database1. Date of Sale2. Customer Detail3. Transaction ID4. Warranty Detail
Database1. Current BOM2. Maint. History3. Replace History4. Usage life
Manufacture Sales Usage/Maintenance Remanufacturing
Look up Directory
Networked RFID for ProductLifecycle Information Management
Database1. Model/Type2. BOM3. Disassembly4. Reliability
Database1. Date of Sale2. Customer Detail3. Transaction ID4. Warranty Detail
Database1. Current BOM2. Maint. History3. Replace History4. Usage life
Database1. Parts identified2. Replaced parts3. Recovery Detail4. Reliability
Manufacture Sales Usage/Maintenance Remanufacturing
Look up service
IDxyz
IDxyz“Where can I find informationabout IDxyz?”
1
2 “Tell me which part was replaced”
“Imaging Unit”
Look up Directory
Networked RFID for ProductLifecycle Information Management
Database1. Model/Type2. BOM3. Disassembly4. Reliability
Database1. Date of Sale2. Customer Detail3. Transaction ID4. Warranty Detail
Database1. Current BOM2. Maint. History3. Replace History4. Usage life
Database1. Parts identified2. Replaced parts3. Recovery Detail4. Reliability
Manufacture Sales Usage/Maintenance Remanufacturing
The Role of Networked RFID in ProductRemanufacturing
Remanufacturing less stochastic due to endogenous quality of returnedproductsDecisions as well process improvementsLess remanufacturing costs.
Endogenous Quality
Customers
Product InformationNetworked RFID
Recycle
Remanufacturing Facility Collection Centre
Collection Centre Visual
Inspection
Product Returns
ProductDemand
Recycle
Product Yield
Disassembly
Cleaning andTesting
Recycle
ComponentYield
Product Assembly And Testing
External supplier
Remanufacturing Facility
Product Remanufacturing with RFID Product Information
Product TypeQuantityActual Carcass BOMEstimated comp. yieldPhysical condition
Product Information
Product TypeQuantityCurrent BOMPhysical conditionNumber of copiesActual comp. yield
Product Information
Product TypeQuantityActual Carcass BOMEstimated comp. yield
Product Information
Product TypeQuantityCurrent BOMPhysical conditionNumber of copiesEstimated comp. yield
Collection Centre Visual
Inspection
Product Returns
ProductDemand
Recycle
Product Yield
Disassembly
Cleaning andTesting
Recycle
ComponentYield
Product Assembly And Testing
External supplier
Remanufacturing Facility
How much to buy from external suppliers
What fraction of demandWill be satisfied fromreturned products?
InventoryDecisions
Reduced product uncertainties
Product InformationActual product yieldEstimated component yield
Product Remanufacturing with RFID
However,
RFID based product information is not without costs.
RFID BenefitsRFID Costs
What is the availability and requirements of product returns information during product remanufacturing?
How can we provide requisite product returns information for improving product remanufacturing process?
How can we quantify the impact of ready availability of product returns information on product remanufacturing?
Research Questions
Single Period - Single RecoverableComponent Model
end product: A
C1 - New component to be procured from outside supplier
C2 - Recovered component obtained from returned products
=> 1 quantity of each component is used for building an endproduct A
A
C2 (1)C1 (1)
Assumptionsa. Remanufacturing is economical.
b. The quantity of returned products A collected at collection centre isknown before making inventory decisions.
c. Demand of end-product A is normally distributed.
d. There are some new components (C1 in our case) to be procured fromoutside supplier. For example: belts, toner assembly. Thus, aremanufactured product is assembled using new components andrecovered components.
e. Product and component yields are uniformly distributed.
Single Period - Single RecoverableComponent Model
Sequence of Events and CostsIncurred in Each Period
Remanufacturing
Inv. Decisions
How many End-product (A) to assemble
Demand Uncertain
HoldShortCost
Re-Process
cost
Reprocess
Inspect
Transport
Disassemble
Recover
Ready availabilityof product info.
Total Remanufacturing costs
Product &Component
Yield uncertain
How many Componentsto order (LfL)
HoldShortCost
1. Obtain information about returned products manually (skilledtechnician) so that there will be reduced uncertainty about productyield of returned products.
⇒ Reduce holding and shortage costs⇒ Reduce transportation costs, disassembly, recovery costs
2. Obtain information about returned products from networked RFID sothat there will be reduced uncertainty about product yield andcomponent yield of returned products.
⇒ Reduce holding and shortage costs⇒ Reduce remanufacturing costs (inspection, disassembly and recovery
costs, transportation costs)
How To Reduce Total Costs inRemanufacturing
Comparing total Costs in 3 Scenarios
Expected Hold/Short cost of End-product
Expected Hold/Short cost of recovered comp.
Expected Reprocessing costs
H. σD.K+(H+S). σD.L(d)
Ci.R+Ct.R+Cd.R +Cr.R.
Current Scenario(I)
!
Hc2 (Qc2 + R.Y " X) f (Y )dYY=Y
Y=Y b
#
+Sc2 (X "Qc2 " R.Y ) f (Y )dYY=Y a
Y=Y
#
!
"c2
Ci.R+ Ct.R. +Cd.R .+ Cr. R.
Manual Product YieldInfo. Scenario(II)
!
Hc2{ (Qc2 + R."C 2.#C 2#C 2= #C 2
#C 2= #C 2b
$"C 2="C 2
a
"C 2="C 2b
$
%X) f (#C 2)d#C 2} f ("C 2)d"C 2 +
Sc2{ (X %Qc2 % R"C 2#C 2#C 2= #C 2
a
#C 2= #C 2
$ )
"C 2="C 2a
"C 2="C 2b
$
f (#C 2)d#C 2} f ("C 2)d"C 2
H. σD.K+(H+S). σD.L(d)
!
"c2
!
"c2
!
"c2
(Ci.R+Ct.R+Cd.R +Cr.R)
Networked RFID Product and Component YieldInfo. Scenario(III)
H. σD.K+(H+S). σD.L(d)
!
"c2
!
"c2
Value of Manual Product = 1 - Total costs in Manual Information ScenarioYield Information Total costs in Current Scenario
Value of RFID = 1 - Total costs in RFID ScenarioProduct and Comp. Total costs in Current ScenarioYield Information
Value of Product Returns Information
!
= 1"
H .#D .k+ (H + S).#D.L(d)+($c2
b " $c2 )(% c2b " % c2
a )
($c2b " $c2
a )
Hc2.(Qc2 " X )+R
4.Hc2.(% c2
b+% c2
a ).($c2b
+ $c2 )
+SC 2(X "QC 2 )"R
4.SC 2.(3$c2 " $c2
b ).(% c2b
+% c2a )
&
'
( ( ( (
)
*
+ + + +
,
-
. .
/
.
.
0
1
. .
2
.
.
+R.(Ci +Ct .% c2 +Cd .% c2 +Cr .% c2 )
Hc2{ (X "Qc2 " R.Y )log(Y )dY}+ Sc2{ (Qc2 + R.Y " X )log(Y )dY}Y =$c 2
a .% c2a
Y =$ c2 .% c 2
3 + R.{Ci +Ct +Cd +Cr .% c2}Y =$ c 2 .% c2
Y =$c2b .% c 2
b
3
!
= 1"H .#D.k+ (H + S).#D .L(d)+ R.$c2.% c2(Ci +Ct +Cd +Cr )
Hc2{ (X "Qc2 " R.Y )log(Y )dY}+ Sc2{ (Qc2 + R.Y " X )log(Y )dY}Y =$c 2
a .% c2a
Y =$ c2 .% c 2
& + R.{Ci +Ct +Cd +Cr .% c2}Y =$ c 2 .% c2
Y =$c2b .% c 2
b
&
Holding/Shortage costs of recovered comp.
Reprocessing costs
Reprocessing costs
Value of Product Returns Information
Value of Manual Product Yield Information (VOI) = (Total costs I - Total costs II)/ Total costs I
Value of RFID Product Yield and comp. yield = (Total costs I - Total costs III)/ Total costs IInformation (VOI)
VOI decreases with increase in demand uncertainty of end-product.
Impact of Demand Uncertainty on VOI
Hold/ShortEnd-product
Hold/ShortComponent
Reprocess
Total Remanufacturing costsDemand Uncertainty of end product
VOI
0 10 20 30 40 50 60 70 80 90 1000.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
Demand Uncertainty
Value of Product returns information
Plot of VOI vs Demand Uncertainty
Manual Product Information
Networked RFID Information
VOI increases with increase in returns ratio of returned products.
Impact of Returns Ratio on VOI
Hold/ShortEnd-product
Reprocess
Total Remanufacturing costsNumber of Returns (Returns Ratio)
VOI
Hold/ShortComponent
0 10 20 30 40 50 60 70 80 90 1000
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Number of returns
Value of product returns information
Number of returns Vs VOI
Manual Product Information
Networked RFID Product Information
VOI increases with increase in returns ratio of returned products.
Impact of Returns Ratio on VOI
Hold/ShortEnd-product
Reprocess
Total Remanufacturing costsNumber of Returns (Returns Ratio)
VOI Hold/ShortComponent
0 10 20 30 40 50 60 70 80 90 1000
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Number of returns
Value of product returns information
Number of returns Vs VOI
Manual Product Information
Networked RFID Product Information
VOI increases with increase in reprocessing costs of returned products.
Impact of Reprocessing costs on VOI
Reprocessing costs
VOI
Hold/ShortEnd-product
Reprocess
Hold/ShortComponent
Total Remanufacturing costs
0.5 1 1.5 2 2.5 3 3.5 4 4.5 50.2
0.25
0.3
0.35
0.4
0.45
0.5
0.55
0.6
0.65
Remanufacturing Costs
Value of product returns information
Remanufacturing costs vs VOI
Manual Product returns Informaton
Networked RFID Information
VOI increases with increase in reprocessing costs of returned products.
Impact of Reprocessing Costs on VOI
Reprocessing costs
VOI
Hold/ShortEnd-product
Reprocess
Hold/ShortComponent
Total Remanufacturing costs
0.5 1 1.5 2 2.5 3 3.5 4 4.5 50.2
0.25
0.3
0.35
0.4
0.45
0.5
0.55
0.6
0.65
Remanufacturing Costs
Value of product returns information
Remanufacturing costs vs VOI
Manual Product returns Informaton
Networked RFID Information
0 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.0935
40
45
50
55
60
65
Yield Uncertainty
Value of Product returns information
Plot of VOI vs Yield Uncertainty
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
x 10-3
5
10
15
20
25
30
Yield Uncertainty
Value of Product returns information
Plot of VOI vs Yield Uncertainty
Yield Uncertainty (Std. Deviation)Yield Uncertainty (Std. Deviation)
VOIVOI
Average product & comp. yield = 0.8Product & comp yield uncertainty = [0.6-1]
Average product & comp. yield = 0.5Product & comp yield uncertainty = [0-1]
Hold/ShortEnd-product
Reprocess
Hold/ShortComponent
Total Remanufacturing costs
Networked RFID
Manual Product Information
Networked RFID
Manual Product Information
VOI increases with increase in yield uncertainty of returned products.VOI decreases with increase in yield of returned products.
Impact of Yield and YieldUncertainty on VOI
0 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.0935
40
45
50
55
60
65
Yield Uncertainty
Value of Product returns information
Plot of VOI vs Yield Uncertainty
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
x 10-3
5
10
15
20
25
30
Yield Uncertainty
Value of Product returns information
Plot of VOI vs Yield Uncertainty
Yield Uncertainty (Std. Deviation)Yield Uncertainty (Std. Deviation)
VOI
VOI increases with increase in yield uncertainty of returned products.VOI decreases with increase in yield of returned products.
Hold/ShortEnd-product
Reprocess
Hold/ShortComponent
Total Remanufacturing costs
Yield uncertain
Yield
Networked RFID
Manual Product Information
Networked RFID
Average product & comp. yield = 0.5Product & comp yield uncertainty = [0-1]
Impact of Yield and YieldUncertainty on VOI
Manual Product Information
Average product & comp. yield = 0.8Product & comp yield uncertainty = [0.6-1]
VOI
VOI increases with increase in holding costs of returned components.
Impact of Holding Costs ofReturned Components on VOI
Hold/ShortEnd-product
Reprocess
Hold/ShortComponent
Total Remanufacturing costsHolding costs of returned components
VOI
0 100 200 300 400 500 600 700 8000.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
Holding cost of components
Value of Product Returns Information
Product and Component Holding costs Vs VOI
Hold costs of A = 1000,
Std.dev of demand = 3
Hold costs of A = 500,
Std.dev of demand = 10
Hold costs of A =1000,
Std.dev of demand = 10
Hold costs of A = 1000,
Std.dev of demand = 3
Networked RFID Information
Manual Product Information
VOI increases with increase in holding costs of returned components.
Impact of Holding Costs ofReturned Components on VOI
Hold/ShortEnd-product
Reprocess
Hold/ShortComponent
Total Remanufacturing costsHolding costs of returned components
VOI
0 100 200 300 400 500 600 700 8000.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
Holding cost of components
Value of Product Returns Information
Product and Component Holding costs Vs VOI
Hold costs of A = 1000,
Std.dev of demand = 3
Hold costs of A = 500,
Std.dev of demand = 10
Hold costs of A =1000,
Std.dev of demand = 10
Hold costs of A = 1000,
Std.dev of demand = 3
Networked RFID Information
Manual Product Information
Findings
Networked RFID information is valuable under the following setting:
1. low demand uncertainty of end products2. High returns3. Relatively low product and component yield4. High uncertainty in product and component yield5. High Holding costs of recovered components6. High reprocessing costs
How to determine economic feasibility ofInformation System (IS) in remanufacturing
What are different
cost elements & how much
they contribute?
Limited Applicability
YES
No
IS has potential to be
economically feasible Total Remanufacturing costs
Holding/Shortage costs of recovered comp
Reprocessing costs (Inspection, transportation, disassembly and component recovery)
Holding/Shortage costs of end-productHold/ShortEnd-product
Reprocess
Hold/ShortComponent
Cost ElementsContribution
IS reduces
higher cost elements
significantly?
Concluding Remarks
1. Product remanufacturing is characterised by returns uncertainty interms of quality of returned products due to lack of product information.
2. Networked RFID Systems not only bring about decision improvementsbut also process improvements in remanufacturing.
3. However, it is necessary to analyse economic benefits vis-à-visinvestments in such automated product identification technologies.
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