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Hewlett-Packard Company Unlocks the Value Potential from Time-Sensitive Returns

Author

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  • V. Daniel R. Guide

    (Department of Supply Chain and Information Systems, Smeal College of Business, Pennsylvania State University, University Park, Pennsylvania 16802)

  • Luc Muyldermans

    (Nottingham University Business School, Jubilee Campus, Wollaton Road, Nottingham NG8 1BB, United Kingdom)

  • Luk N. Van Wassenhove

    (INSEAD, Boulevard de Constance, 77305 Fontainebleau Cedex, France)

Abstract

Hewlett-Packard (HP) and other companies producing short life-cycle products with rapid value erosion squander the opportunity to profit from returned time-sensitive products when they treat them as a nuisance. Instead of focusing on cost minimization and technical quality, they should recognize returns as a value stream and maximize the revenue from smart and fast disposition, proper refurbishment, and prompt resale through the appropriate channels. We worked on a project with Hewlett-Packard’s remarketing group to unlock the value potential of time-sensitive returns. We analyzed data using simple calculations to reveal the major drivers and magnitude of potential value recovery, and we used simple operations research flow models to evaluate new design and policy options for the reverse supply chain. HP benefited from an integrated end-to-end business approach to product returns.

Suggested Citation

  • V. Daniel R. Guide & Luc Muyldermans & Luk N. Van Wassenhove, 2005. "Hewlett-Packard Company Unlocks the Value Potential from Time-Sensitive Returns," Interfaces, INFORMS, vol. 35(4), pages 281-293, August.
    • Handle: RePEc:inm:orinte:v:35:y:2005:i:4:p:281-293
    DOI: 10.1287/inte.1050.0145
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    References listed on IDEAS

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    1. V. Daniel R. Guide & Terry P. Harrison & Luk N. Van Wassenhove, 2003. "The Challenge of Closed-Loop Supply Chains," Interfaces, INFORMS, vol. 33(6), pages 3-6, December.
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    Cited by:

    1. Aditya Vedantam & Ananth Iyer, 2021. "Revenue‐Sharing Contracts Under Quality Uncertainty in Remanufacturing," Production and Operations Management, Production and Operations Management Society, vol. 30(7), pages 2008-2026, July.
    2. Gan, Shu-San & Pujawan, I Nyoman & Suparno, & Widodo, Basuki, 2018. "Pricing decisions for short life-cycle product in a closed-loop supply chain with random yield and random demands," Operations Research Perspectives, Elsevier, vol. 5(C), pages 174-190.
    3. Vishal V. Agrawal & Atalay Atasu & Koert van Ittersum, 2015. "Remanufacturing, Third-Party Competition, and Consumers' Perceived Value of New Products," Management Science, INFORMS, vol. 61(1), pages 60-72, January.
    4. Jun Lv & Xuan Liu & Shijie Cheng, 2021. "The Impact of Remanufactured Products’ Similarity on Purchase Intention of New Products," Sustainability, MDPI, vol. 13(4), pages 1-12, February.
    5. Niknejad, A. & Petrovic, D., 2014. "Optimisation of integrated reverse logistics networks with different product recovery routes," European Journal of Operational Research, Elsevier, vol. 238(1), pages 143-154.
    6. Zikopoulos, Christos & Tagaras, George, 2015. "Reverse supply chains: Effects of collection network and returns classification on profitability," European Journal of Operational Research, Elsevier, vol. 246(2), pages 435-449.
    7. Kadambala, Dinesh K. & Subramanian, Nachiappan & Tiwari, Manoj K. & Abdulrahman, Muhammad & Liu, Chang, 2017. "Closed loop supply chain networks: Designs for energy and time value efficiency," International Journal of Production Economics, Elsevier, vol. 183(PB), pages 382-393.
    8. Sumukadas, Narendar, 2021. "Are you ready for your next product recall crisis? Lessons from operations and supply chain management," Business Horizons, Elsevier, vol. 64(2), pages 211-221.
    9. Jiri Chod & David Pyke & Nils Rudi, 2010. "The Value of Flexibility in Make-to-Order Systems: The Effect of Demand Correlation," Operations Research, INFORMS, vol. 58(4-part-1), pages 834-848, August.
    10. Chang Fang & Zhuangzhuang You & Yudou Yang & Duomei Chen & Samar Mukhopadhyay, 2020. "Is third-party remanufacturing necessarily harmful to the original equipment manufacturer?," Annals of Operations Research, Springer, vol. 291(1), pages 317-338, August.
    11. Difrancesco, Rita Maria & Huchzermeier, Arnd & Schröder, David, 2018. "Optimizing the return window for online fashion retailers with closed-loop refurbishment," Omega, Elsevier, vol. 78(C), pages 205-221.
    12. Panagiotidou, Sofia & Nenes, George & Zikopoulos, Christos & Tagaras, George, 2017. "Joint optimization of manufacturing/remanufacturing lot sizes under imperfect information on returns quality," European Journal of Operational Research, Elsevier, vol. 258(2), pages 537-551.
    13. Ilkka Ritola & Harold Krikke & Marjolein C.J. Caniëls, 2020. "Learning from Returned Products in a Closed Loop Supply Chain: A Systematic Literature Review," Logistics, MDPI, vol. 4(2), pages 1-13, April.
    14. Tagaras, George & Zikopoulos, Christos, 2008. "Optimal location and value of timely sorting of used items in a remanufacturing supply chain with multiple collection sites," International Journal of Production Economics, Elsevier, vol. 115(2), pages 424-432, October.
    15. Gaur, Jighyasu & Amini, Mehdi & Rao, A.K., 2017. "Closed-loop supply chain configuration for new and reconditioned products: An integrated optimization model," Omega, Elsevier, vol. 66(PB), pages 212-223.
    16. Krikke, Harold & Hofenk, Dianne & Wang, Yacan, 2013. "Revealing an invisible giant: A comprehensive survey into return practices within original (closed-loop) supply chains," Resources, Conservation & Recycling, Elsevier, vol. 73(C), pages 239-250.
    17. Ruiz-Benítez, Rocío & Ketzenberg, Michael & van der Laan, Erwin A., 2014. "Managing consumer returns in high clockspeed industries," Omega, Elsevier, vol. 43(C), pages 54-63.
    18. Muyldermans, L. & Van Wassenhove, L.N. & Guide, V.D.R., 2019. "Managing high-end ex-demonstration product returns," European Journal of Operational Research, Elsevier, vol. 277(1), pages 195-214.
    19. Qin Zhou & Kum Fai Yuen, 2020. "Analyzing the Effect of Government Subsidy on the Development of the Remanufacturing Industry," IJERPH, MDPI, vol. 17(10), pages 1-20, May.

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