This past April, I had the pleasure of visiting Shanghai Polytechnic University in Shanghai, China. I was hosted by Professor Hao, Ph. D Professor and Doctoral Supervisor and his team of students, attorneys, and reverse logistics professionals at Professor Hao’s Shanghai Polytechnic reverse logistics lab. As many reverse logistics professionals know reverse logistics operations result in an entirely unique series of challenges to logistics and operations. With an impressive list of multinational firms in Shanghai, Professor Hao and his team of experts and undergraduate and graduate students are in a unique position to conduct research and apply research to the development of new technologies and methodologies that will aid in the building and execution of new platforms for reverse logistics.
Shanghai Polytechnic University is located in the Pudong New Area of Shanghai not too far from Tesla’s upcoming vehicle assembly facility scheduled to have already been completed this month.
Founded in 1960 Shanghai Polytechnic University is a municipal public university boasting strengths in Engineering and well-coordinated development of multi-disciplines including Management, Economics, Literature, Science and Arts. Shanghai Polytechnic University has a tradition of serving many multinational firms in Shanghai and contributing to the modernization of Shanghai. The university has achieved remarkable education and social benefits, being honored as a Model of China’s Vocational Education and Cradle of Model Workers.
Against this back drop, Professor Hao is well supported to make inroads into the complexities of reverse logistics and what he has coined as the “Fifth Profit Source” for firms which now face a need to support green supply chain management as China shifts toward environmental protection and away from ecological neglect.
This shift is most apparent in China’s issuance of an extended producer responsibility (EPR) plan to assure the protection of resources and the environment. China’s plan requires producers to be responsible in resource consumption and adhere to environmental protection standards throughout the life of the product from product design, consumption, recycling and waste disposal rather than just at the manufacturing process. In 2020 the EPR policy framework will be completed while supporting laws and regulations will quickly follow and be established by 2025. China will first tackle EPR in electronics, batteries, and vehicles.
In order to support a sustainable supply chain which also progresses China’s EPR policy frame work, it is critical to create new methods and tools to account for the multi staged operational and logistical needs of a system that supports a product post-consumer use and into the waste stream and recycling. As a result, there exists a strong interrelation between extended producer responsibility laws and reverse logistics. To best support the EPR policy framework, a network which optimizes forward and reverse logistics together is ideal.
Professor Hao’s “Reverse Logistics-X lab” at Shanghai Polytechnic University allows research and development into how best this system can be accomplished. He employs various technologies in his operations with key suppliers and the help of his students who are creative and innovative about using a combination of older and newer technologies together to best execute on the returns management of products. These systems allow for sorting and ranking of returns and a tracking of reasons for returns. Tracking reasons for returns is invaluable to manufacturers as they improve on product features. Professor Hao and his students also organize a yearly global reverse logistics design contest to allow for reverse logistics technology and business model innovation. The benefits of reverse logistics are also directly monetary. Professor Hao believes that reverse logistics can be a profit center for many firms and showing this to companies is crucial in improving the reverse logistics process for these organizations.
With the construction of China’s eco civilization, reverse logistics and how it fits within the initial manufacturing process of products will become increasingly important as EPR laws evolve. For now, Professor Hao and his students are well on their way to producing significant innovations to make a green supply chain a reality for not only China but the world.