Essay On Reverse Logistics In Chinese Automobile Manufacturing Industry

Introduction

Since the year 2007, the automobile market of China has grown by 24 percent annually and outstripped the U.S. market to become the largest automobile market for new automobiles in the year 2010 (CEIBS, 2012 p.3). Logistics management concepts have challenged several practices in the Chinese automobile industry. Before 2004, most Chinese automobile businesses were aware of the concept of forward logistics, i.e. getting the products to customers, but the concept of reverse logistics i.e. product recycling/recall was unknown to many. The European and American auto industry is well aware of the concept of reverse logistics, but the Chinese automakers needed to adjust to the impact reverse logistics. The regulations related to reverse logistics enforced automakers to repair, refund or replace the faulty parts or products resulting from auto recalls. Auto recalls having the potential to generate large numbers of reverse flow, which turned out to be complex and new activity for automakers (Adebanjo & Xiao, 2006 p.834-838).

Project Theme

The project will discuss the topic of reverse logistics and how it has impacted the Chinese automobile industry. The report analyzes how reverse logistics have become an essential part of the logistics management in the Chinese automobile industry. There are many instances of reverse logistics that have been witnessed in China and some of these cases have had significant impact on Chinese automakers. These instances were the first time Chinese automobile manufacturers had to face losses due to the reverse logistics as they had never handled similar situations. These incidents became a learning experience for businesses and many automakers started to understand the importance of the concept and relevance of working in a manner that helps in reducing events of reverse logistics.

Research Statement

What is the impact of reverse logistics in the Chinese automobile industry?
The central question aims to answer:
What is the concept of reverse logistics?
How is it important to the Chinese automobile industry?
What are the significant cases related to the reverse logistics in the Chinese automobile industry?
How have Chinese automakers adapted to the reverse logistics regulations?
How useful has the concept of reverse logistics been in the Chinese automobile industry?
Has there been an impact on quality due to the regulations of reverse logistics?
Have there been many cases of reverse logistics?
Have reverse logistics been positive or negative for the Chinese automobile industry?
The assumption of the study is that reverse logistics has brought to light the importance of quality in Chinese automobile markets. Due to the regulations related to reverse logistics, several automakers have started to focus on the importance of maintaining quality in car manufacturing and ensuring they avoid reverse logistics.

Project Aim

The project aims to research and identify the cases related to reverse logistics in the Chinese automobile industry and the impact regulations have had on the automakers. Through the project, several cases of reverse logistics in the Chinese auto market will be studied and their relevance will be analyzed. With the project the overall aim is to understand the relevance of reverse logistics and how it has changed in outlook of the Chinese automobile industry and operational standards of several automakers within China. The knowledge of the cases will help in understanding how the dynamics of Chinese auto industry have changed since 2004.

Objectives

The objectives of this report on reverse logistics in the Chinese automobile industry is to prove:
Reverse logistics have played a crucial role in the Chinese automobile industry in terms of improving the quality of car manufacturing.
Many Chinese automakers have adapted by understanding the need to improve the quality of automobiles and services to ensure actions such as reverse logistics can be avoided.

There have several cases of reverse logistics in the Chinese automobile industry.

The impact of reverse logistics has been positive for the Chinese automobile industry.
There has been continuous improvement in the quality of the cars to ensure losses from reverse logistics can be avoided.
Overall, the concept of reverse logistics has made the Chinese automobile industry more efficient and there has been increasing satisfaction among customers.

Methodology

There are certain barriers to research that restrict the impact of reverse logistics on the Chinese automobile industry. One of the biggest problems is expected to be the implementation barrier that many automakers might not fully accept it unless they are fined or face recalls. Such situations might lead to implementation barrier that would be based on the part of automakers and would increase the likelihood of companies facing higher probabilities of reverse logistics.
Project Plan

References

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