Developing a Reverse Logistics Model for Raya Brewery

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Addis Ababa University


Reverse logistics can be defined as the way of returning products or others from the customer /end user to the producers. Nowadays, the field of reverse logistics is an important activity due to the expansion of different number of industries. Previous studies on reverse logistics focused on hazardous management programmes, asset recovery and obsolete material disposition. Studying reverse logistic has great advantage to Companies for resource conservation and addressing environmental sustainability thereby reducing costs from purchasing a new product. Raya Brewery Share Company, a case company in this study, has been challenged to return empty beer bottles and steel kegs while it distributes high amount of beer product per day. This research focuses on developing a reverse logistics model for Raya Brewery Share Company. Studying the reverse logistics of this company helps to increases the flow of the empty bottles and steel kegs from the end users of customer to the company itself. In order to apply a good flow of empty bottles and steel kegs to the company; a theoretical holistic model and a proper collection centre is considered with optimum location facility that minimizes the transportation cost of returning empty beer bottles and steel kegs. In order to achieve the stated objectives of the study, different data gathering techniques including literature review of different published articles related to the concept of reverse logistics was carried out. The SPSS and LINGO 17 tools were used in this study. From the finding of this study the barriers and the drivers influence the reverse logistics process of Raya Brewery internally and externally and gating the products in the required period of time is the challenging and dynamic behaviour due to unpermitted sharing of bottles and steel kegs by the other beer producer. These factors hinder the company in returning empty beer bottles and steel kegs. The barriers and drivers of reverse logistics are analysed using SPSS factor analysis method. The result from the SPSS shows that the factors have direct and indirect impact in the reverse logistics of Raya Brewery. The collection centre is computed by using LINGO 17 and centre of gravity to determine the optimal collection centre with respect to transportation cost by formulating a transportation model. The result indicates that 20.941% of improvement by minimizing transportation cost compared to the total transportation expenses of the company. Therefore, assigning a proper collection centres helps to return the products easily and reduces a cost related to transportation and managing properly the barriers and drivers can make the company more successful. To improve the return of bottles and kegs of Raya Brewery, the study recommends implementing the developed reverse logistics holistic model and the proposed collection centre.



Raya Brewery, Logistics Model