A decomposition algorithm for robust lot sizing problem with remanufacturing option

In this paper, we propose a decomposition procedure for constructing robust optimal production plans for reverse inventory systems. Our method is motivated by the need of overcoming the excessive computational time requirements, as well as the inaccuracies caused by imprecise representations of problem parameters. The method is based on a min-max formulation that avoids the excessive conservatism of the dualization technique employed by Wei et al. (2011). We perform a computational study using our decomposition framework on several classes of computer generated test instances and we report our experience. Bienstock and Özbay (2008) computed optimal base stock levels for the traditional lot sizing problem when the production cost is linear and we extend this work here by considering return inventories and setup costs for production. We use the approach of Bertsimas and Sim (2004) to model the uncertainties in the input

The manufacturer's value chain as a service - the case of remanufacturing

Manufacturing enterprises globally have already largely adopted the product-service strategy into their operations. However, due to gradual commoditization of services, manufacturing enterprises will have to further extend this strategy. One possibility is for manufacturers to servitize, not only their final products, but also a part of their value chain, with the aim of increasing their long-term competitive advantage. In this article, the application of servitization to remanufacturing, as a set of operational and business competences and processes, is conceptualized. By offering remanufacturing as a service, manufacturers will create an additional revenue stream. The synergies created from integrating remanufacturing into an enterprise with a product-service system are scrutinized. The impact of offering remanufacturing as a service (servitizing) is then assessed from the perspective of the competitive advantage of both, the provider and the consumer of the service. Three main sets of implications are identified. The first is that the integration of remanufacturing into a product-service system could increase customer satisfaction through a larger service scope and higher service quality, while decreasing operational costs. Furthermore, it is shown that the higher the level of servitization, the stronger is the positive impact of remanufacturing. The second set of results shows that servitizing remanufacturing can substantially increase the competitive advantage of both the provider and the consumer. While the first two sets of results have industrially oriented implications, the third set constitutes a theoretical contribution through the proposal and conceptual validation of extension of the application of servitization theory. Finally, while the reasoning is of a conceptual nature, it is based on established theories and includes remanufacturing-related industrial cases as a basis for assessment

Closed-Loop supply chains in circular economy business models

With the emergence of the circular economy (CE) approach into business models, there is need for deeper understanding of resource loops activities and how current supply chains can support the development of emerging CE business models. However, there is still limited research addressing the conceptualization of closed loops in the supply chain literature. This work addresses this research gap and proposes a typology for closed loops that is independent from the type of product under concern. Our findings suggest that there are two types of closed-loop supply chains in circular business models. Further work is envisaged to understand how companies can effectively develop their closed-loop supply chains as part of their transformation towards a more circular business model

Scenario-Driven Supply Chain Charaterization Using a Multi-Dimensional Approach

Extreme disruptive events, such as the volcano eruption in Iceland, the Japanese tsunami, and the COVID-19 pandemic, as well as constant changes in customers’ needs and expectations, have forced supply chains to continuously adapt to new environments. Consequently, it is paramount to understand the supply chain characteristics for possible future scenarios, in order to know how to respond to threats and take advantage of the opportunities that the next years will bring. This chapter focuses on describing the characteristics of the supply chain in each of the six macro-scenarios presented in Sardesai et al. (2020b), as final stage of the scenario building methodology. Supply chains for each scenario are characterized in eight dimensions: Products and Services, Supply Chain Paradigm, Sourcing and Distribution, Technology Level, Supply Chain Configuration, Manufacturing Systems, Sales Channel, and Sustainability