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

Applying Revenue Management to the Reverse Supply Chain

We study the disposition decision for product returns in a closed-loop supply chain. Motivated by the asset recovery process at IBM, we consider two disposition alternatives. Returns may be either refurbished for reselling or dismantled for spare parts. Reselling a refurbished unit typically yields higher unit margins. However, demand is uncertain. A common policy in many firms is to rank disposition alternatives by unit margins. We show that a revenue management approach to the disposition decision which explicitly incorporates demand uncertainty can increase profits significantly. We discuss analogies between the disposition problem and the classical airline revenue management problem. We then develop single period and multi-period stochastic optimization models for the disposition problem. Analyzing these models, we show that the optimal allocation balances expected marginal profits across the disposition alternatives. A detailed numerical study reveals that a revenue management approach to the disposition problem significantly outperforms the current practice of focusing exclusively on high-margin options, and we identify conditions under which this improvement is the highest. We also show that the value recovered from the returned products critically depends on the coordination between forward and reverse supply chain decisions.remanufacturing;revenue management;onderdelen;revenues;spare parts inventory

Optimal Decision Making for Capacitated Reverse Logistics Networks with Quality Variations

Increasing concerns about the environmental impact of production, product take-back laws and dwindling natural resources have heightened the need to address the impact of disposing end-of-life (EOL) products. To cope this challenge, manufacturers have integrated reverse logistics into their supply chain or chosen to outsource product recovery activities to third party firms. The uncertain quality of returns as well as uncertainty in return flow limit the effectiveness of planning, control and monitoring of reverse logistics networks. In addition, there are different recovery routes for each returned product such as reuse, repair, disassembling, remanufacturing and recycling. To determine the most profitable option for EOL product management, remanufacturers must consider the quality of returns and other limitations such as inventory size, demand and quantity of returns. The work in this dissertation addresses these pertinent aspects using two models that have been motivated by two remanufacturing facilities whereby there are uncertainties in the quality and quantity of return and capacitated inventories. In the first case, a disposition decision making model is developed for a remanufacturing process in which the inventory capacity of recoverable returns is limited and where there\u27s a constant demand to be met, for remanufactured products that meet a minimum quality threshold. It is assumed that the quality of returns is uncertain and remanufacturing cost is dependent on the quality grade. In this model, remanufacturing takes place when there is demand for remanufactured products. Accepted returns that meet the minimum quality threshold undergo the remanufacturing processes, and any unacceptable returns are salvaged. A continuous time Markov chain (CTMC) is presented as the modeling approach. The Matrix-Geometric solution methodology is applied to evaluate several key performance metrics for this system, to result in the optimal disposition policy. The numerical study shows an intricate trade-off between the acceptable quality threshold value and the recoverable product inventory capacity. Particularly, there are periodic system starvation whenever there is a mis-match between these two system metrics. In addition, the sensitivity analysis indicates that changes to the demand rate for remanufactured products necessitates the need to re-evaluate the existing system configuration. In the second case, a general framework is presented for a third party remanufacturer, where the remanufacturer has the alternative of salvaging EOL products and supplying parts to external suppliers, or remanufacture the disassembled parts to \u27as new\u27 conditions. The remanufacturing processes of reusable products and parts is studied in the context of other process variables such as the cost and demand of remanufactured products and parts. The goal of this model is to determine the return quality thresholds for a multi-product, multi-period remanufacturing setting. The problem is formulated as a mixed integer non-linear programming (MINLP) problem, which involves a discretization technique that turns the problem turns into a quadratic mixed integer programming (QMIP) problem. Finally, a numerical analysis using a personal computer (PC) remanufacturing facility data is used to test the extent to which the minimum acceptance quality threshold is dependent on the inventory level capacities of the EOL product management sites, varying operational costs and the upper bound of disposal rate

Supply chain challenges for sustainability: the case of waste textiles as raw materials

Purpose: This paper addresses the growing problem of textile waste in the rapidly developing cities of subSaharan Africa and examines, from a supply chain perspective, the potential for waste textile materials to be transformed into the raw materials for new consumer products. Research Approach: The paper reflects on the outcomes of a field trip to Dar es Salaam in which stakeholders in a hypothesised textile waste supply chain were interviewed and waste textile materials were analysed in order to determine their content and appropriateness for reuse. Findings from the field study have been compared with current literature on logistics and market creation, waste generation, management and recycling in sub-Saharan Africa. Findings and Originality: The findings show that a rudimentary system has been in place for many years to collect and recycle textiles in Dar es Salaam. However, at the same time as textile waste is projected to increase in the city, collection rates are falling. The chief reasons for the falling rates are failures in the ‘modernised mixture’ approach to waste collection employed by Dar es Salaam City Council and market failure for the collected materials. Alternative combinations of ‘modernised mixtures’, incorporating community-based organisations, are likely to increase textile yields from unplanned urban areas but previous high-profile failures in such systems within Dar es Salaam mean there is caution on both sides in entering into such a relationship. The more pressing problem is to identify appropriate end markets for the textile materials, since in a country where recycling is entirely market-driven, failure to do so will undermine any attempt to improve the collection system. Whilst many studies have considered general recycling practices in sub-Saharan Africa, there are few investigations into textile waste. Furthermore, those existing studies do not consider the importance of understanding fibre composition of the materials in order to determine the most appropriate end markets. Research Impact: The research contributes to the growing body of knowledge on ‘bottom of the pyramid’ approaches to sustainable futures. Practical Impact: The work presented considers supply chain problems and offers approaches to tackling the increasing waste management issues of Dar es Salaam and proposes a mechanism for doing so which has the potential to provide income for the poorest sectors of the urban society

The explanatory power of trust and commitment and stakeholders' salience : their influence on the reverse logistics programs performance

There is a growing awareness among practitioners and scholars regarding the importance of Relationship Marketing and its advantages in the supply chain management context. This is particularly appropriate for Reverse Logistics (RL) activities, which are characterized by several relationships between different stakeholders and the firm. Drawing on multiple theoretical approaches, we propose that RL programs result from the combination of external, organizational, and individual factors. We emphasize the role of trust and commitment as key influential elements on the RL systems implementation and their subsequent performance

Production planning and control of closed-loop supply chains

More and more supply chains emerge that include a return flow of materials. Many original equipment manufacturers are nowadays engaged in the remanufacturing business. In many process industries, production defectives and by-products are reworked. These closed-loop supply chains deserve special attention. Production planning and control in such hybrid systems is a real challenge, especially due to increased uncertainties. Even companies that are engaged in remanufacturing operations only, face more complicated planning situations than traditional manufacturing companies.We point out the main complicating characteristics in closed-loop systems with both remanufacturing and rework, and indicated the need for new or modified/extended production planning and control approaches. An overview of the existing scientific contributions is given. It appears that we only stand at the beginning of this line of research, and that many more contributions are needed and expected in the future.closed-loop supply chains;Production planning and control

Industrial ecology, industrial symbiosis and supply chain environmental sustainability: a case study of a large UK distributor

The supply chain management literature indicates that limited research has explored the roles of Industrial Ecology and Industrial Symbiosis in relation to supply chain environmental sustainability development. Studies have explored supply chain environmental sustainability development and provided different approaches for developing environmentally sustainable supply chains. These include environmental management, design for environment, product stewardship, green purchasing, reverse logistics, recycling, reuse, and remanufacturing. These approaches have often been considered independently. Industrial Ecology and Industrial Symbiosis offer systematic thinking for companies to integrate key elements of these approaches into their supply chain environmental sustainability development. This study aims to develop a conceptual framework to embrace the integration and identify opportunities for companies to work collaboratively. The initial framework was proposed based on the review of the literature associated with environmentally sustainability supply chain management, Industrial Ecology, and Industrial Symbiosis. The initial framework is improved by corroborating the case study company's experience, a large UK distributor. Different hierarchies in waste management have also been considered when developing the framework. The paper emphasises the importance of prevention and reduction methods. The developed framework illustrates the areas and opportunities for supply chain parties to work collaboratively towards environmentally friendly activities. The developed framework contributes to the environmentally sustainable supply chain management literature and encourages companies to apply Industrial Ecology and Industrial Symbiosis to develop their environmentally sustainable supply chains