Information System driven Process Standardization for High Impact Issues in Reverse Logistics

Abstract

In today's fast-paced global environment, the primary challenge for high-tech companies is maintaining a consistent supply of raw materials in the form of specialized parts from their suppliers. This is essential to sustain manufacturing operations and meet performance targets, ultimately ensuring customer satisfaction. The specialized parts used as raw materials are often technically intricate and costly, which contributes to lengthy lead times for manufacturing and sourcing. Consequently, these parts are generally maintained at low inventory levels. If received incorrectly or found defective during use and if the nature of the defect is such that they are unserviceable, they require immediate intervention such as repair, reconditioning, remanufacturing, or quality analysis to ensure operational continuity. Direct replacement of these parts with new, fault-free parts is often not feasible within the required timelines due to their lengthy sourcing durations. In this context, the emerging field of Reverse Logistics becomes critical, facilitating the efficient handling of these defective parts by shipping them to their respective suppliers to take the appropriate action and ensure that they are swiftly returned to operational status, thereby minimizing downtime and maintaining the supply chain's integrity. These are termed as high-impact issues in Reverse Logistics.
Any delay in shipping defective parts or products to their suppliers extends the time required to perform necessary actions such as repairs or quality checks. These delays result in downtime and can halt the manufacturing operations of high-tech companies until the corrected parts are received back and reintegrated into the production process.
To achieve these objectives, it is essential to have a robust standardized information-sharing and communication process flow throughout the organization. This will ensure timely and accurate management of these defective parts as requested by various stakeholders within high-tech companies. The unavailability of such a process flow leads to significant delays and operational inefficiencies, undermining the company's ability to respond quickly to critical situations and maintain consistent manufacturing outputs.
Stakeholders throughout the organization, responsible for the supply and demand planning of critical and low-inventory parts, initiate requests to the Reverse Logistics Team for shipping defective parts to the supplier when they are deemed as unserviceable or incorrectly received and there is no new inventory to replace them. For the Reverse Logistics Team to achieve timely shipments, they require access to relevant information that is timely, accurate, and centralized through a platform or interface that offers transparency, traceability, and accountability. This system must also be scalable to accommodate an increasing volume of requests in the foreseeable future.
Due to the lack of a standardized process flow, stakeholders currently employ fragmented and inconsistent methods for communicating and sharing information about defective parts with the Reverse Logistics team. These methods are highly unreliable and risky, lacking traceability and visibility in a centralized interface where all incoming and processed requests can be monitored. The existing methods need continuous monitoring by the RL team to ensure they do not miss any requests. Furthermore,
when these existing communication practices are deployed, necessary preliminary steps required before sending requests to the Reverse Logistics team get bypassed, creating bottlenecks and hindering their ability to efficiently manage and expedite the shipment of defective parts. Therefore, the necessity of developing and integrating a standardized process with an advanced Information System like ERP, and adopting it organization-wide, will significantly streamline the defect-handling process. This strategic integration enhances transparency, traceability, and accountability, ensuring that requests from various stakeholders to ship defective parts from high-tech companies to suppliers are managed efficiently and effectively. The Reverse Logistics Team is pivotal in ensuring that these defective parts are promptly shipped to suppliers upon notification.
The literature underscores the necessity for a process flow that expedites the shipment of unserviceable and incorrectly received parts to suppliers for necessary corrective actions. It highlights a notable deficiency in the standardization and formalization of process flows within Reverse Logistics.
This leads to the research question of the thesis which is How can high-tech companies standardize their information-sharing and communication processes to effectively manage high-impact issues in reverse logistics? To address this research question, the research methodology used in this research draws on the Information Systems Research Framework, integrating aspects of people, organization, and technology, both current and prospective. A comprehensive qualitative analysis was conducted, involving 22 semi-structured interviews for thematic analysis complemented by document analysis to delve into the challenges and impacts arising from the absence of standardized information-sharing and communication processes. Utilizing the Technology-Organization-Environment (TOE) framework, this research explores the technological, organizational, and external environmental contexts that influence technology adoption, specifically Information Systems in an organization. Additionally, it incorporates business process management and standardization theories to elucidate the standardization of business processes and the role of information systems therein. This provides foundational insights for developing an Information Systems based process flow, while also emphasizing the importance of change management theories and models for ensuring its successful adoption. This comprehensive approach facilitates a deep understanding of the factors necessary for successfully developing and adopting information systems as a standard process flow within high-tech companies to manage high-impact issues.

This rigorous qualitative analysis based on the literature framework and theories reveals that high-tech companies seeking to develop and standardize their information-sharing and communication processes to manage issues related to the shipment of unserviceable and incorrect parts in Reverse Logistics require a comprehensive approach. This approach incorporates technological, organizational, and environmental factors that significantly influence the development and successful adoption of such standardized process flows.

This research, therefore, by studying the challenges and impacts resulting from the lack of a standardized information sharing and communication process flow identifies key technological, organizational, and external environmental factors, along with their inter-dependencies, that influence the development and successful adoption of such an Information System-based standardized process flow. A framework called IS-PSF is developed which consists of these factors and inter-dependencies identified which are further spread across the phase of change management (transition from an existing state which in this case is the unavailability to the future state which is post-adoption of the to be Information System based process flow). The research methodology employed to develop the IS-PSF framework is distinctive, integrating the TOE framework with theories of business process standardization and change management models.

There are many relevant academic and practical insights derived from this research. The research demonstrated that while documentation of agreed procedures, rules, and guidelines can contribute to standardization, true standardization is unachievable without the integration of information systems alongside these formalization efforts based on the nature of the business processes used. The research highlighted that high-tech companies should deploy a proactive strategy for understanding the need for standardization by monitoring the performance of the business processes using performance indicators or metrics. The research showcased that having a robust and matured IT infrastructure alone is not sufficient but the role of human factors and how the stakeholders make sense of a technology (information systems in this case) are crucial for selecting an appropriate IS on which the standardized process can be developed and successfully adopted.

The research highlights the role of effective change management communication and strategy is vital to ensure a successful transition from the existing non-standardized fragmented information-sharing and communication practices to the standardized Information System process flow. An effective change management strategy decides whether the change management will be successful or a failure. The research also points out the importance of periodic reviews of the process flow by the process owners for continuous improvements. The research highlights that at times, owing to customer requirements, market volatility, environmental regulations, and the aim to set industry standards, high-tech companies standardize their processes in Reverse logistics.

From a practical perspective, the framework developed in the research helps managers make informed decisions on technology investments and change management strategies, allowing for seamless adoption of new systems across organizational boundaries. The study's practical application of the conceptual framework bridges the gap between theory and practice, providing actionable insights for improving process performance and stakeholder satisfaction in high-tech industries.

Overall, this study contributes to the development and successful adoption of an Information Systems Standard Process Flow. This framework is designed to efficiently and effectively manage issues related to unserviceable and incorrectly received parts, aiming to expedite their shipment to suppliers for necessary actions. The goal is to minimize delays in the process flow through the development and successful implementation of a standardized information system-based process flow.