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

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

Location, inventory and testing decisions in closed-loop supply chains: a multimedia company

Our partnering firm is a Chinese manufacturer of multimedia products that needs guidance developing its imminent Closed-Loop Supply Chain (CLSC). To study this problem, we take into account location, inventory, and testing decisions in a CLSC setting with stochastic demands of new and time-sensitive returned products. Our analysis pays particular attention to the different roles assigned to the reverse Distribution Centers (DCs) and how each option affects the optimal CLSC design. The roles considered are collection and consolidation, additional testing tasks, and direct shipments with no reverse DCs. The problem concerning our partnering firm is formulated as a scenario-based chance-constrained mixed-integer program and it is reformulated to a conic quadratic mixed-integer program that can be solved efficiently via commercial optimization packages. The completeness of the model proposed allows us to develop a decision support tool for the firm and to offer several useful managerial insights. These insights are inferred from our computational experiments using data from the Chinese firm and a second data set based on the U.S. geography. Particularly interesting insights are related to how changes in the reverse flows can impact the forward supply chain and the inventory dynamics concerning the joint DCs.This research is partially supported by the National Natural Science Foundation of China under grants 71771135, 71371106 and 71332005

The impact of information sharing, random yield, correlation, and lead times in closed loop supply chains

This is the author accepted manuscript. The final version is available from Elsevier via the DOI in this recordWe investigate the impact of advance notice of product returns on the performance of a decentralised closed loop supply chain. The market demands and the product returns are stochastic and are correlated with each other. The returned products are converted into "as-good-as-new" products and used, together with new products, to satisfy the market demand. The remanufacturing process takes time and is subject to a random yield. We investigate the benefit of the manufacturer obtaining advance notice of product returns from the remanufacturer. We demonstrate that lead times, random yields and the parameters describing the returns play a significant role in the benefit of the advance notice scheme. Our mathematical results offer insights into the benefits of lead time reduction and the adoption of information sharing schemes.Japan Society for the Promotion of Scienc

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

Modelling an End to End Supply Chain system Using Simulation

Within the current uncertain environment industries are predominantly faced with various challenges resulting in greater need for skilled management and adequate technique as well as tools to manage Supply Chains (SC) efficiently. Derived from this observation is the need to develop a generic/reusable modelling framework that would allow firms to analyse their operational performance over time (Mackulak and Lawrence 1998, Beamon and Chen 2001, Petrovic 2001, Lau et al. 2008, Khilwani et al. 2011, Cigollini et al. 2014). However for this to be effectively managed the simulation modelling efforts should be directed towards identifying the scope of the SC and the key processes performed between players. Purpose: The research attempts to analyse trends in the field of supply chain modelling using simulation and provide directions for future research by reviewing existing Operations Research/Operations Management (OR/OM) literature. Structural and operational complexities as well as different business processes within various industries are often limiting factors during modelling efforts. Successively, this calls for the end to end (E2E) SC modelling framework where the generic processes, related policies and techniques could be captured and supported by the powerful capabilities of simulation. Research Approach: Following Mitroff’s (1974) scientific inquiry model and Sargent (2011) this research will adopt simulation methodology and focus on systematic literature review in order to establish generic OR processes and differentiate them from those which are specific to certain industries. The aim of the research is provide a clear and informed overview of the existing literature in the area of supply chain simulation. Therefore through a profound examination of the selected studies a conceptual model will be design based on the selection of the most commonly used SC Processes and simulation techniques used within those processes. The description of individual elements that make up SC processes (Hermann and Pundoor 2006) will be defined using building blocks, which are also known as Process Categories. Findings and Originality: This paper presents an E2E SC simulation conceptual model realised through means of systematic literature review. Practitioners have adopted the term E2E SC while this is not extensively featured within academic literature. The existing SC studies lack generality in regards to capturing the entire SC within one methodological framework, which this study aims to address. Research Impact: A systematic review of the supply chain and simulation literature takes an integrated and holistic assessment of an E2E SC, from market-demand scenarios through order management and planning processes, and on to manufacturing and physical distribution. Thus by providing significant advances in understanding of the theory, methods used and applicability of supply chain simulation, this paper will further develop a body of knowledge within this subject area. Practical Impact: The paper will empower practitioners’ knowledge and understanding of the supply chain processes characteristics that can be modelled using simulation. Moreover it will facilitate a selection of specific data required for the simulation in accordance to the individual needs of the industry

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