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Usage of ISM 1
Usage of ISM 1
Department of Business and Economics, University of Southern Denmark, 5230 Odense M, Denmark
PVP College of Engineering and Technology For Women, Dindugal 624708, India
c
School of Business Management, Dalian University of Technology, Dalian, China
d
Indian Institution of Industrial Engineering, Navi Mumbai, India
b
a r t i c l e i n f o
a b s t r a c t
Article history:
Received 26 October 2010
Accepted 30 January 2012
Available online 13 February 2012
Due to growing economic environment and the introduction of new technologies in marketing, another
topic of great interest to logistics today is the use of contract or third party services. In the complicated
business world, the company is involved in reuse, recycling, and remanufacturing functions using a
third party logistics provider which has an impact on the total performance of the rm. In the
development of the reverse logistics concept and practice, the selection of providers for the specic
function of reverse logistics support becomes more important. After scanning the surplus of literatures,
it was concluded that multiple dimensions and attributes must be used in the evaluation and selection
of 3PRLP.
The attributes play an important role in selecting a third party reverse logistics provider (3PRLP).
Interpretive structural modeling (ISM) methodology is adopted in this model, which can be used for
identifying and summarizing relationships among specic attributes for selecting the best third party
reverse logistics provider among the n 3PRLPs.
& 2012 Elsevier B.V. All rights reserved.
Keywords:
Supply chain management
Reverse logistics
Attributes
3PRLP
ISM
1. Introduction
The term supply chain represents the complete set of activities
involved in marketing, planning, purchasing, full manufacturing,
distribution, delivery process, and reverse logistics. Nowadays,
the supply chain plays a vital role in the value creation process.
Supply chain management recognizes the importance of, and
focuses effort on, achieving tight integration between the various
links of the chain. To be efcient, a supply chain must exploit
modern productivity techniques and approaches, for example JIT
purchasing, economic batch sizes, strategic inventory, reverse
logistics, third party logistics, etc.
Logistic management is termed as the detailed process of
planning, implementing, and controlling the efcient, cost effective
ow and storage of materials and products, and related information
within a supply chain to satisfy demand (CLM, 2004), and logistics is
recognized as the key enabler that allows a company to increase and
maintain its competitive advantage and ensures maximum customer satisfaction (Drucker, 1962).
Reverse logistics is the process of moving goods from their
typical nal destination to another point, for the purpose of
Corresponding author.
E-mail address: gov@sam.sdu.dk (K. Govindan).
0925-5273/$ - see front matter & 2012 Elsevier B.V. All rights reserved.
doi:10.1016/j.ijpe.2012.01.043
205
Table 1
Attributes & sub-attributes (adopted from Kannan (2009)).
Attributes
Sub-attributes
Reference
Reclaim (OR1), Recycle (OR2), Remanufacture (OR3), Reuse (OR4), Meade and Sarkis (2002), Dowlatshahi (2000), Demir and Orhan
and Disposal (OR5)
(2003), and Schwartz (2000)
Organizational Performance
Criteria (OPC)
IT Applications (IT)
Fig. 1. Operational life cycle of a product and reverse logistics location (adopted from Meade and Sarkis (2002)).
2. Literature review
Many business groups have recently dened logistics for the
private sector. All of these denitions of logistics focus on the
organization of services and supplies and the movement of goods
from one point to another. Aghazadeh (2003) states that logistics
206
Third party 1
Direct Reuse
Customer
Third party 2
Retailer
Remanufacturing
Collection
Manufacturer
Warehouse
.
.
.
.
Third party n
Plant
Recycling
Repair
Land filling
Fig. 2. Selection of best third party.
Redistribution
Reuse
The objective of this research study is to illustrate the interactions between the attributes for the 3PRLP development using ISM.
The model has been applied to a tire manufacturing company in the
southern part of India and the company planned to improve the
quality of the returned product. Instead of purchasing the used
product from the single 3PRLP, the company planned to purchase it
from the best 3PRLP out of n alternative 3PRLPs.
Expert opinion
Step 4: Develop
Reachability Matrix
Yes
Step 8: Is
there any
conceptual
inconsistency?
No
For example
IT will help to alleviate the 3PLS (V);
RLF will be alleviated by IT (A);
US and IU3PL will help each other to improve the product (X);
OPC and 3PLS of the product are unrelated (O).
Fig. 3. Flow diagram for preparing ISM (Kannan et al., 2009, 2010).
Step 3:
Step 4:
Step 5:
Step 6:
Step 7:
Step 8:
207
If the (i, j) entry in the SSIM is V, then the (i, j) entry in the
reachability matrix becomes 1 and the (j, i) entry becomes 0.
If the (i, j) entry in the SSIM is A, then the (i, j) entry in the
reachability matrix becomes 0 and the (j, i) entry becomes 1.
If the (i, j) entry in the SSIM is X, then the (i, j) entry in the
Table 2
Structural Self-Interaction Matrix (SSIM) for main attributes.
Factors
RLF
3PLS
IU3PL
US
OR
OPC
IT
IT
OPC
OR
US
IU3PL
3PLS
RLF
A
V
O
O
A
V
-
V
O
A
V
V
V
O
V
X
V
V
O
V
V
208
Table 3
Initial reachability matrix for main attributes.
Factors
IT
OPC
OR
US
IU3PL
3PLS
RLF
IT
OPC
OR
US
IU3PL
3PLS
RLF
1
0
0
0
0
0
1
1
1
0
0
0
0
0
1
1
1
0
0
1
0
1
1
0
1
1
0
1
1
0
1
1
1
0
1
1
0
0
1
1
1
0
0
1
0
0
0
1
1
Factors
IT
OPC
OR
US
IU3PL
3PLS
RLF
IT
OPC
OR
US
IU3PL
3PLS
RLF
1
1n
0
0
0
1n
1
1
1
0
0
0
0
1n
1
1
1
1n
1n
1
1n
1
1
1n
1
1
0
1
1
1n
1
1
1
1n
1
1
1n
1n
1
1
1
1n
1n
1
0
1n
1n
1
1
Table 7
Level partition-iteration 2 (main attributes).
Table 5
Final reachablity matrix with driving power and dependence for main attributes.
Factors
IT
OPC
OR
US
IU3PL
3PLS
RLF
Driving power
Rank
IT
OPC
OR
US
IU3PL
3PLS
RLF
Dependence
Rank
1
1
0
0
0
1
1
4
III
1
1
0
0
0
0
1
3
IV
1
1
1
1
1
1
1
7
I
1
1
1
1
1
0
1
6
I
1
1
1
1
1
1
1
7
I
1
1
1
1
1
1
1
7
I
1
1
0
1
1
1
1
6
II
7
7
4
5
5
5
7
I
I
IV
III
III
III
I
Factors
Reachability set
Antecedent set
Intersection set
Level
IT
OPC
US
RLF
IT,OPC,US,RLF
IT,OPC,US,RLF
US,RLF
IT,OPC,US,RLF
IT,OPC,RLF
IT,OPC,RLF
IT,OPC,US,RLF
IT,OPC,US,RLF
IT,OPC,RLF
IT,OPC,RLF
US,RLF
IT,OPC,US,RLF
II
II
Table 8
Level partition-iteration 3 (main attributes) factors.
IT
OPC
Reachability set
Antecedent set
Intersection set
Level
IT,OPC
IT,OPC
IT,OPC
IT,OPC
IT,OPC
IT,OPC
III
III
Table 6
Level partition-iteration 1 (main attributes).
Factors
Reachability set
Antecedent set
Intersection set
IT
OPC
OR
US
IU3PL
3PLS
RLF
IT,OPC,OR,US,IU3PL,3PLS,RLF
IT,OPC,OR,US,IU3PL,3PLS,RLF
OR,US,IU3PL,3PLS
OR,US,IU3PL,3PLS,RLF
OR,US,IU3PL,3PLS,RLF
IT,OR,IU3PL,3PLS,RLF
IT,OPC,OR,US,IU3PL,3PLS,RLF
IT,OPC,3PLS,RLF
IT,OPC,RLF
IT,OPC,OR,US,IU3PL,3PLS,RLF
IT,OPC,OR,US,IU3PL,RLF
IT,OPC,OR,US,IU3PL,3PLS,RLF
IT,OPC,OR,US,IU3PL,3PLS,RLF
IT,OPC,US,IU3PL,3PLS,RLF
IT,OPC,3PLS,RLF
IT,OPC,RLF
OR,US,IU3PL,3PLS
OR,US,IU3PL,RLF
OR,US,IU3PL,3PLS,RLF
IT,OR,IU3PL,3PLS,RLF
IT,OPC,US,IU3PL,3PLS,RLF
Level
I
I
I
Organizational Role
(OR)
209
User Satisfaction
(US)
Reverse Logistics
Function (RLF)
Information Technology
Applications (IT)
Organizational
Performance Criteria
(OPC)
DEPENDENCE
Fig. 4. ISM-based attribute model for third party reverse logistics provider selection.
II
III
Cluster
Cluster
I
Cluster
IV
Cluster
DRIVING POWER
Fig. 5. Driving power and dependence diagram.
The rst cluster consists of the autonomous attributes which
have weak driving power and weak dependence.
US, OR, RLF, 3PLS, and OPC are at the bottom level of the
hierarchy implying higher driving power. Therefore, rms should
focus on these factors.
There are no autonomous attributes seen in the driver-dependence diagram (shown in Fig. 6). The absence of these attributes
brings light to the fact that all of the attributes considered do
inuence the third party reverse logistics in the tire supply chain.
It is also observed that there are no dependent factors.
The management should place high priority on tackling the
attributes which have a high driving power and thus possessing the capability to inuence other attributes, which are
shown at the bottom level of the ISM (shown in Fig. 6).
To select these attributes, a comprehensive strategic plan for
selection of 3PRLP should to be initiated to achieve success.
Despite the fact that the ISM model developed in this work is
for the attributes prominently seen in the tire manufacturing
company, some generalization of the results is still possible.
7. Conclusion
DEPENDENCE
210
7
6
5
4
3
2
1
OR
IU3PL,3PLS
US
RLF
IT
OPC
DRIVING POWER
Fig. 6. Driving power and dependence diagram for main attributes.
Acknowledgments
The rst author is supported by a Grant from Forsknings- og
Innovationsstyrelsen for The International Network programme
(1681448) and the third author is supported by a Grant from National
Science Fund for Distinguished Young Scholars (71025002) and
National Key Basic Research Program of China (973 Program,
2011CB013406).
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