Abstract
Among the many components of material delivery operations, packaging is one of the foundations of secure and cost-efficient on-time delivery. Current environmental concerns have increased the popularity of returnable packaging over disposable packaging. This study considers a supply chain in the automotive industry where a single supplier adopts returnable packages for delivery operations to a single recipient. If a returnable package is not available, then an expendable package will be used as a more expensive alternative. Thus, an investment decision on the number of returnable packages must be made prior to launching a returnable packaging system. Using the actual data from an automotive supply chain, this study conducts simulated experiments, under the uncertainty of future demand and required lead time of reverse logistics, to identify the optimal quantity of returnable packages. Sensitivity analysis is then performed by varying the assumptions on operation duration, demand variability, and lead time variability. In general, the results indicate that a greater initial purchase of returnable packages is desirable for longer operation duration, higher demand variability, and higher lead time variability. However, if operation duration is short and the uncertainty is high, then there may be little benefit in using reusable packages. These results generalize the findings from previous studies. This approach and solution can enhance reliable and efficient supply chain operations in the automotive industry and may be applied to other industries where packaging is important and expensive.
Highlights
A closed-loop supply chain (CLSC) refers to a bi-directional supply chain between a sender and a receiver that aims to achieve both business and environmental benefits
This study focuses on the most important and variable factors, return time and demand, size, they are not applicable to the most prevalent switch-pool system in automotive supply chains, when deciding on the level of initial investment for returnable transport items (RTIs) in automotive supply chains
This study considers a CLSC consisting of one supplier and one assembler
Summary
A closed-loop supply chain (CLSC) refers to a bi-directional supply chain between a sender and a receiver that aims to achieve both business and environmental benefits. It has gained attention from both industry and academics, due to growing interest in sustainability and the green economy [1,2,3,4]. Customized packaging reduces overall costs and improves reliability and productivity in the assembly line. For these reasons, along with long supply chain lifetimes and Sustainability 2019, 11, 6579; doi:10.3390/su11236579 www.mdpi.com/journal/sustainability
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