Design Principles for Closed Loop Supply Chains

In this paper we study design principles for closed loop supply chains. Closed loop supply chains aim at closing material flows thereby limiting emission and residual waste, but also providing customer service at low cost. We study 'traditional' and 'new' design principles known in the literature. It appears that setting up closed loop supply chains requires some additional design principles because of sustainability requirements. At the same time however, we see that traditional principles also apply. Subsequently we look at a business situation at Honeywell. Here, only a subset of the relevant design principles is applied. The apparent low status of reverse logistics may provide an explanation for this. To some extent, the same mistakes are made again as were 20 years ago in, for instance, inbound logistics. Thus, obvious improvements can be made by applying traditional principles. Also new principles, which require a life cycle driven approach, need to be applied. This can be supported by advanced management tools such as LCA and LCC.reverse logistics;case-study;closed loop supply chains

Design Principles for Closed Loop Supply Chains

In this paper we study design principles for closed loop supply chains. Closed loop supply chains aim at closing material flows thereby limiting emission and residual waste, but also providing customer service at low cost. We study 'traditional' and 'new' design principles known in the literature. It appears that setting up closed loop supply chains requires some additional design principles because of sustainability requirements. At the same time however, we see that traditional principles also apply. Subsequently we look at a business situation at Honeywell. Here, only a subset of the relevant design principles is applied. The apparent low status of reverse logistics may provide an explanation for this. To some extent, the same mistakes are made again as were 20 years ago in, for instance, inbound logistics. Thus, obvious improvements can be made by applying traditional principles. Also new principles, which require a life cycle driven approach, need to be applied. This can be supported by advanced management tools such as LCA and LCC

Design of Closed Loop Supply Chains

Increased concern for the environment has lead to new techniques to design products and supply chains that are both economically and ecologically feasible. This paper deals with the product - and corresponding supply chain design for a refrigerator. Literature study shows that there are many models to support product design and logistics separately, but not in an integrated way. In our research we develop quantitative modelling to support an optimal design structure of a product, i.e. modularity, repairability, recyclability, as well as the optimal locations and goods flows allocation in the logistics system. Environmental impacts are measured by energy and waste. Economic costs are modelled as linear functions of volumes with a fixed set-up component for facilities. We apply this model using real life R&D data of a Japanese consumer electronics company. The model is run for different scenarios using different parameter settings such as centralised versus decentralised logistics, alternative product designs, varying return quality and quantity, and potential environmental legislation based on producer responsibility.supply chain management;reverse logistics;facility location;network design;product design

Closed-loop supply chain network design: Case of durable products

Closed loop supply chains comprise, in addition to the conventional forward flows from suppliers to end-users, a reverse flow of products, components, and materials from end-users to the manufacturers and secondary markets. Designing a closed-loop supply chain is a strategic level planning which considerably impacts on tactical and operational performance of the supply chain. It refers to the decisions taken on the location of facilities involved in the supply chain network along with the management of the physical flows associated with forward and product recovery channels. Our problem of interest is mainly motivated by the case of durable products including but not limited to large household appliances, computers, photocopying equipment, and aircraft engines. Such category of products has a modular structure, composed of independent components. As opposed to simple structured products, e.g., printer cartridges, that can only be recycled, each of the components in the reverse bill of materials of durable products can be recovered by a particular type of recovery process. Besides, durable products share a long life cycle characteristic which indeed makes designing their CLSC networks more complicated. In this thesis, in keeping with the abovementioned motivation, we focus on designing closed-loop and reverse supply chains in the context of durable products that are of various quality conditions. The recovery decisions for product return include remanufacturing, part harvesting, bulk recycling, material recycling, and landfilling/incineration. Moreover, we take into account environmental concerns regarding the harmful impacts of used products in the closed-loop supply chain planning. As the closed-loop supply chains typically encounter uncertainty in quality and quantity of the profitable return stream, we further aim to consider the impact of uncertainty in designing the recovery network. For such purposes, in the first phase, we address a closed-loop supply chain planning problem in the context of durable products with generic modular structures. The problem is formulated as a mixed-integer programming model which is then solved by an accelerated Benders decomposition-based algorithm. The performance of the proposed decomposition approach is enhanced through incorporating algorithmic features including valid inequalities, non-dominated optimality cuts, and local branching strategies. Next, in the second phase, we propose a precise approach to model the uncertain quality status of returns, in which the availability of each component in the reverse bill of materials is modeled as discrete scenarios. We propose a two-stage stochastic programming model to address this problem setting. Then, since the cardinality of the scenario set grows exponentially with the number of involved components, we detail on a scenario reduction scheme to alleviate the computational burden of the proposed model. The stochastic problem is solved by a L-shaped algorithm enhanced through valid inequalities and Pareto-optimal cuts. Finally, we investigate designing a dynamic reverse supply chain where the quantity of the return flows is uncertain. We introduce a multi-stage stochastic programming model and develop a heuristic inspired by scenario clustering decomposition scheme as the solution method. It revolves around decomposing the scenario tree into smaller sub-trees which consequently yields a number of sub-models in accordance with sub-trees. The resulting sub-models are then coordinated by Lagrangian penalty terms. On account of the fact that each sub-model per se is a hard to solve problem, a Benders decomposition-based algorithm is proposed to solve sub-models

Disposition Choices Based on Energy Footprints instead of Recovery Quota

This paper addresses the impact of disposition choices on the energy use of closed-loop supply chains. In a life cycle perspective, energy used in the forward chain which is locked up in the product is recaptured in recovery. High quality recovery replaces virgin production and thereby saves energy. This so called substitution effect is often ignored. Governments worldwide implement Extended Producer Responsibility (EPR). Policies are based on recovery quota and not effective from an energy point of view. This in turn leads to unnecessary emissions of amongst others CO2. This research evaluates current EPR policies and presents six policy alternatives from an energy standpoint. The Pareto-frontier model used is generic and can be applied to other closed loops supply chains under EPR, exploiting the substitution effect. The measures modeled are applied to five WEEE cases. We discuss results, pros an cons of various alternatives and complementary measures that might be taken.extended producer responsibility;disposition;energy perspective;substitution effect;government policies;Pareto efficiency

A Conceptual Framework of Reverse Logistics Impact on Firm Performance

This study aims to examine the reverse logistics factors that impact upon firm performance. We review reverse logistics factors under three research streams: (a) resource-based view of the firm, including: Firm strategy, Operations management, and Customer loyalty (b) relational theory, including: Supply chain efficiency, Supply chain collaboration, and institutional theory, including: Government support and Cultural alignment. We measured firm performance with 5 measures: profitability, cost, innovativeness, perceived competitive advantage, and perceived customer satisfaction. We discuss implications for research, policy and practice

E-business and circular supply chains : increased business opportunities by IT-based customer oriented return-flow management

This paper deals with the application of IT in circular supply chains (CSCs). We consider information on the installed base critical, and present an illustrative example. Next we discuss a framework of different kinds of value contained in a return, and IT-applications useful in supporting its recovery or neutralisation in case of negative externalities. Also we show which kind of CSC is needed for which kind of return. We illustrate our work by three real life case studies.reverse logistics;supply chain management;electronic commerce;product life cycle

Sustainable fibre for sustainable fashion supply chains: where the journey to sustainability begins

Adopting a sustainable business model is an essential element of gaining competitive advantage. Specifically, the management of fashion and textile supply chains characterized by geographical extension requires paying particular attention to environmental and social sustainability. Following an analysis of the literature on sustainable supply chains in the fashion and textile industries, this qualitatively based research examines – from a supply chain perspective – the sustainability initiatives implemented by a yarn and garment producer through a single case study. Subsequently, the classification of potential sustainability initiatives is presented. From this investigation, several good practices for sustainable fashion supply chains can be identified, providing a reference point for similar companies. Keywords: sustainable fashion supply chain, sustainable textiles, closed loop supply chai

THEORETICAL FRAMES FOR DESIGNING REVERSE LOGISTICS PROCESSES

Logistics processes of return flow became more and more important in present business practice. Because of better customer satisfaction, environmental and financial aspects many enterprises deal with reverse logistics performance. The paper is a literature review focused on the design principles of reverse logistics processes Keywords: reverse logistics, designing.reverse logistics, designing