The boomerang returns? Accounting for the impact of uncertainties on the dynamics of remanufacturing systems

Recent years have witnessed companies abandon traditional open-loop supply chain structures in favour of closed-loop variants, in a bid to mitigate environmental impacts and exploit economic opportunities. Central to the closed-loop paradigm is remanufacturing: the restoration of used products to useful life. While this operational model has huge potential to extend product life-cycles, the collection and recovery processes diminish the effectiveness of existing control mechanisms for open-loop systems. We systematically review the literature in the field of closed-loop supply chain dynamics, which explores the time-varying interactions of material and information flows in the different elements of remanufacturing supply chains. We supplement this with further reviews of what we call the three ‘pillars’ of such systems, i.e. forecasting, collection, and inventory and production control. This provides us with an interdisciplinary lens to investigate how a ‘boomerang’ effect (i.e. sale, consumption, and return processes) impacts on the behaviour of the closed-loop system and to understand how it can be controlled. To facilitate this, we contrast closed-loop supply chain dynamics research to the well-developed research in each pillar; explore how different disciplines have accommodated the supply, process, demand, and control uncertainties; and provide insights for future research on the dynamics of remanufacturing systems

On the dynamics of closed-loop supply chains with capacity constraints

In this paper, we investigate the dynamic behavior of a closed-loop supply chain with capacity restrictions both in the manufacturing and remanufacturing lines. We assume it operates in a context of a twofold uncertainty by considering stochastic demand and return processes. From a bullwhip perspective, we evaluate how the four relevant factors (specifically, two capacities and two sources of uncertainty) interact and determine the operational performance of the system by measuring the variability of the manufacturing and remanufacturing lines and the net stock. Interestingly, while the manufacturing capacity only impacts on the forward flow of materials, the remanufacturing capacity affects the dynamics of the whole system. From a managerial viewpoint, this work suggests that capacity constraints in both remanufacturing and manufacturing lines can be adopted as a fruitful bullwhip-dampening method, even if they need to be properly regulated for avoiding a reduction in the system capacity to fulfill customer demand in a cost-effective manner

The impact of product returns and remanufacturing uncertainties on the dynamic performance of a multi-echelon closed-loop supply chain

We investigate a three-echelon manufacturing and remanufacturing closed-loop supply chain (CLSC) constituting of a retailer, a manufacturer and a supplier. Each echelon, apart from its usual operations in the forward SC (FSC), has its own reverse logistics (RL) operations. We assume that RL information is transparent to the FSC, and the same replenishment policies are used throughout the supply chain. We focus on the impact on dynamic performance of uncertainties in the return yield, RL lead time and the product consumption lead time. Two outcomes are studied: order rate and serviceable inventory. The results suggest that higher return yield improves dynamic performance in terms of overshoot and risk of stock-out with a unit step response as input. However, when the return yield reaches a certain level, the classic bullwhip propagation normally associated with the FSC does not always hold. The longer remanufacturing and product consumption lead times result in a higher overshoot and a longer time to recover inventory, as well as more oscillation in the step response at the upstream echelons. We also study bullwhip and inventory variance when demand is a random variable. Our analysis suggests that higher return yield contributes to reduced bullwhip and inventory variance at the echelon level but for the CLSC as a whole the level of bullwhip may decrease as well as increase as it propagates along the supply chain. The reason for such behaviour is due to the interaction of the various model parameters and should be the subject of further analytical research. Furthermore, by studying the three-echelon CLSC, we produce a general equation for eliminating inventory offsets in an n-echelon CLSC. This is helpful to managers who wish to maintain inventory service levels in multi-echelon CLSCs

Closed Loop Supply Chain (CLSC): economics, modelling, management and control

This article summarizes the papers published in the special issue entitled “Closed Loop Supply Chain (CLSC): Economics, Modelling, Management and Control” in the International Journal of Production Economics. A total of 24 papers, covering an extensive range of topics in the Closed Loop Supply Chain research area, have been included in this special issue. This special issue received a wide and diverse geographical contribution with authors from 16 countries located in 4 continents including America, Asia, Europe, and Africa. Initially, the special issue received 71 research paper submissions and the final selection of 24 papers, which were recommended by at least two reviewers, provide a basis for new research directions in the domain of reverse logistics and Closed Loop Supply Chain management

Modularization in material flow simulation for managing production releases in remanufacturing

Remanufacturing is recognized as a major circular economy option to recover and upgrade functions from post-use products. However, the inefficiencies associated with operations, mainly due to the uncertainty and variability of material flows and product conditions, undermine the growth of remanufacturing. With the objective of supporting the design and management of more proficient and robust remanufacturing processes, this paper proposes a generic and reconfigurable simulation model of remanufacturing systems. The developed model relies upon a modular framework that enables the user to handle multiple process settings and production control policies, among which token-based policies. Customizable to the characteristics of the process under analysis, this model can support logistics performance evaluation of different production control policies, thus enabling the selection of the optimal policy in specific business contexts. The proposed model is applied to a real remanufacturing environment in order to validate and demonstrate its applicability and benefits in the industrial settings

Decision makings in key remanufacturing activities to optimise remanufacturing outcomes : a review

The importance of remanufacturing has been increasing since stricter regulations on protecting the environment were enforced. Remanufacturing is considered as the main means of retaining value from used products and components in order to drive a circular economy. However, it is more complex than traditional manufacturing due to the uncertainties associated with the quality, quantities and return timing of used products and components. Over the past few years, various methods of optimising remanufacturing outcomes have been developed to make decisions such as identifying the best End-Of-Life (EOL) options, acquiring the right amounts of cores, deciding the most suitable disassembly level, applying suitable cleaning techniques, and considering product commonality across different product families. A decision being made at one remanufacturing activity will greatly affect the decisions at subsequent activities, which will affect remanufacturing outcomes, i.e. productivity, economic performance effectiveness, and the proportion of core that can be salvaged. Therefore, a holistic way of integrating different decisions over multiple remanufacturing activities is needed to improve remanufacturing outcomes, which is a major knowledge gap. This paper reviews current remanufacturing practice in order to highlight both the challenges and opportunities, and more importantly, offers useful insights on how such a knowledge gap can be bridged

The value of regulating returns for enhancing the dynamic behaviour of hybrid manufacturing-remanufacturing systems

Several studies have determined that product returns positively impact on the dynamics of hybrid manufacturing-remanufacturing systems, provided that they are perfectly correlated with demand. By considering imperfect correlation, we observe that intrinsic variations of returns may dramatically deteriorate the operational performance of these closed-loop supply chains. To cope with such added complexity, we propose a structure for controlling the reverse flow through the recoverable stock. The developed mechanism, in the form of a prefilter, is designed to leverage the known positive consequences of the deterministic component of the returns and to buffer the harmful impact of their stochastic component. We show that this outperforms both the benchmark push system and a baseline solution consisting of regulating all the returns. Consequently, we demonstrate that the operation of the production system is greatly smoothed and inventory is better managed. By developing a new framework for measuring the dynamics of closed-loop supply chains, we show that a significant reduction in the net stock, manufacturing, and remanufacturing variances can be achieved, which undoubtedly has implications both for stock reduction and production stabilization. Thus, the known benefits of circular economy models are strengthened, both economically and environmentally

Navigating Complexities In Closed-Loop Supply Chains: A Review Of Objectives, Uncertainties And Decision Variables

The investigation of closed-loop supply chains (CLSC) and the principle of the circular economy becomes imperative in order to reduce the environmental impact associated with product development. This paper aims to conduct a literature review to explore and categorise the main content areas that are essential to the understanding of this research field and accordingly application of Closed-Loop Supply Chains (CLSC) and the circular economy. To this end, this study focuses on identifying and analysing the forming factors in this context including the decision variables, measures of effectives, inherent uncertainties, and limitations associated with CLSC concepts. A significant contribution of this review lies in its detailed exploration of uncertainties associated with CLSC, highlighting their profound impact on achieving circular economy (CE) objective. Through a comprehensive analysis of existing literature, the review identified and categorised the following uncertainties (mention them here), and examined how they influence strategic decision-making and optimization process in CLSC. To the best of the authors’ knowledge, such a review with critical analysis has not received its deserved attention in current literature. With the gained insights, this paper investigated the challenges and limitations associated with CLSE implementation in an uncertain environment. The discussion draws upon existing literature to highlight the hurdles that exist and propose potential methods to overcome them. A future road map is introduced by proposing a conceptual connection between circular supply chains and inventory management, based on a structured analysis approach

End-of-life vehicle (ELV) recycling management: improving performance using an ISM approach

With booming of the automobile industry, China has become the country with increasing car ownership all over the world. However, the end-of-life vehicle (ELV) recycling industry is at infancy, and there is little systematic review on ELV recycling management, as well as low adoption amongst domestic automobile industry. This study presents a literature review and an interpretive structural modeling (ISM) approach is employed to identify the drivers towards Chinese ELV recycling business from government, recycling organizations and consumer’s perspectives, so as to improve the sustainability of automobile supply chain by providing some strategic insights. The results derived from the ISM analysis manifest that regulations on auto-factory, disassembly technique, and value mining of recycling business are the essential ingredients. It is most effective and efficient to promote ELV recycling business by improving these attributes, also the driving and dependence power analysis are deemed to provide guidance on performance improvement of ELV recycling in the Chinese market