A structural framework for closed‐loop supply chains

Abstract

PurposeThe concept of the customer order decoupling point (CODP) has been used in many different contexts as an important structural concept for the traditional forward supply chain. The CODP is rarely explicitly applied in reverse supply chain management and the purpose of this paper is to show that the CODP can be an important corner stone of a framework for analysis of the closed‐loop supply chain containing both forward and reverse material flows.Design/methodology/approachConceptual similarities are identified using analogies between forward and reverse supply chains. First, the concepts are discussed in their original context of forward flows and thereafter the concepts are applied on reverse flows. Finally, a holistic closed‐loop model is established.FindingsThe conventional CODP framework for forward flow supply chains can be extended to cover also reverse material flows and therefore providing a foundation for a more comprehensive discussion of closed‐loop supply chains useful in both education, research, and industrial applications. Using the suggested extended framework it is possible to identify nine fundamental supply chain configurations.Practical implicationsDifferentiating between demand driven and forecast driven activities plays a critical role in practical supply chain management and this paper highlights that this approach also can be applied to closed‐loop supply chains and therefore extending the reach of the toolbox previously developed for the forward supply chain.Originality/valueThe concept CODP has not previously been comprehensively treated for the closed‐loop supply chain and this paper provides a foundation for establishing a strategic structural framework for discussing issues such as lean vs agile and balancing efficiency and responsiveness in a more comprehensive context involving also reverse material flows.