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

Overview and classification of coordination contracts within forward and reverse supply chains

Among coordination mechanisms, contracts are valuable tools used in both theory and practice to coordinate various supply chains. The focus of this paper is to present an overview of contracts and a classification of coordination contracts and contracting literature in the form of classification schemes. The two criteria used for contract classification, as resulted from contracting literature, are transfer payment contractual incentives and inventory risk sharing. The overview classification of the existing literature has as criteria the level of detail used in designing the coordination models with applicability on the forward and reverse supply chains.Coordination contracts; forward supply chain; reverse supply chain

Last Time Buy and Control Policies With Phase-Out Returns: A Case Study in Plant Control Systems

This research involves the combination of spare parts management and reverse logistics. At the end of the product life cycle, products in the field (so called installed base) can usually be serviced by either new parts, obtained from a Last Time Buy, or by repaired failed parts. This paper, however, introduces a third source: the phase-out returns obtained from customers that replace systems. These returned parts may serve other customers that do not replace the systems yet. Phase-out return flows represent higher volumes and higher repair yields than failed parts and are cheaper to get than new ones. This new phenomenon has been ignored in the literature thus far, but due to increased product replacements rates its relevance will grow. We present a generic model, applied in a case study with real-life data from ConRepair, a third-party service provider in plant control systems (mainframes). Volumes of demand for spares, defects returns and phase-out returns are interrelated, because the same installed base is involved. In contrast with the existing literature, this paper explicitly models the operational control of both failed- and phase-out returns, which proves far from trivial given the nonstationary nature of the problem. We have to consider subintervals within the total planning interval to optimize both Last Time Buy and control policies well. Given the novelty of the problem, we limit ourselves to a single customer, single-item approach. Our heuristic solution methods prove efficient and close to optimal when validated. The resulting control policies in the case-study are also counter-intuitive. Contrary to (management) expectations, exogenous variables prove to be more important to the repair firm (which we show by sensitivity analysis) and optimizing the endogenous control policy benefits the customers. Last Time Buy volume does not make the decisive difference; far more important is the disposal versus repair policy. PUSH control policy is outperformed by PULL, which exploits demand information and waits longer to decide between repair and disposal. The paper concludes by mapping a number of extensions for future research, as it represents a larger class of problems.spare parts;reverse logistics;phase-out;PUSH-PULL repair;non stationary;Last Time Buy;business case

Integrating Closed-loop Supply Chains and Spare Parts Management at IBM

Ever more companies are recognizing the benefits of closed-loop supplychains that integrate product returns into business operations. IBMhas been among the pioneers seeking to unlock the value dormant inthese resources. We report on a project exploiting product returns asa source of spare parts. Key decisions include the choice of recoveryopportunities to use, the channel design, and the coordination ofalternative supply sources. We developed an analytic inventory controlmodel and a simulation model to address these issues. Our results showthat procurement cost savings largely outweigh reverse logistics costsand that information management is key to an efficient solution. Ourrecommendations provide a basis for significantly expanding the usageof the novel parts supply source, which allows for cutting procurementcosts.supply chain management;reverse logistics;product recovery;inventory management;service management

Warehouse Redesign

A young, growing biomedical company is expanding its warehouse space to keep up with the increasing production. This project’s goals were to recommend a layout and improve a process that would minimize the distance traveled by the material handlers, increase the safety of the warehouse by implementing visual controls, implement ergonomics to reduce chance of injury, and save money for the company. To achieve this first I familiarized myself with their current processes and department and the space required for their current and future production levels. Next I created two alternative layouts, the first (Layout A) to minimize distance and the second (Layout B) to minimize distance while also minimizing cost. Both layouts removed an area that exposed the material handlers to an increased risk of back injury and reduced time moving items by keeping lots together until final shipping. In this stage I also created a proposal to implement visual controls in order to clearly designate quarantine areas and improve the visibility of the operation to auditors and people from corporate. Then I evaluated both layouts on time savings versus the cost of implementing the new layout, Layout A saved $50 more per year but cost an additional$3,000 to implement. The economic evaluations showed that both layouts paid off in 4 years but Layout B had a higher net present value and internal rate of return and a lower payback period so I decided to recommend Layout B

Designing pull production control systems:Customization and robustness

In this dissertation we address the issues of selecting and configuring pull production control systems for single-product flowlines. We start with a review of pull systems in the literature, yielding a new classification. Then we propose a novel selection procedure based on a generic system that we test on a case also studied in the literature. We further study our procedure for a variety of twelve production lines. We find new types of pull systems that perform well. Next, we raise the issue of designing pull systems under uncertainty. We propose a novel procedure to minimize the risk of poor performance. Results show that risk considerations strongly influence the selection of a specific pull system

Constraint-Based Supply Chain Inventory Deployment Strategies

The development of Supply Chain Management has occurred gradually over the latter half of the last century, and in this century will continue to evolve in response to the continual changes in the business environment. As organizations exhaust opportunities for internal breakthrough improvements, they will increasingly turn toward the supply chain for an additional source of untapped improvements. Manufacturers in particular can benefit from this increased focus on the chain, but the gains realized will vary by the type of supply chain. By applying basic production control principles to the chain, and effectively using tools already common at the production line level, organizations address important supply chain considerations. Both the Theory of Constraints and the factory physics principles behind the Constant WIP concepts focus on the system constraint with the aim of controlling inventory. Each can be extrapolated to focus on a system whose boundaries span the entire supply chain