Effects of network structures on the production planning in closed-loop supply chains – A case study based analysis for lithium-ion batteries in Europe

Abstract

The increasing demand for electric vehicles and related lithium-ion batteries leads to the implementation of battery production in Europe. Recently, legal obligations, high material prices, and supply risk of battery materials induced OEMs to set up recycling facilities or cooperate with battery recyclers. Different network structures emerged in this process. However, it remains unclear how the network structures influence the performance in the short-term. Therefore, a novel multi-stage, multi-product, multi-period production planning approach for closed-loop supply chains of lithium-ion batteries is developed. The model considers a spatial distribution of collection, recycling, repurposing, and production. Furthermore, the facilities of the OEM and suppliers a considered simultaneously. The collection is further divided into cost-free take-back of spent batteries and purchase of additional batteries. This approach enables the stakeholders of the closed-loop supply chain to counteract material shortages or price fluctuations. Subsequently, the effects of different network structures are analyzed based on a case study for closed-loop supply chains of lithium-ion batteries in Europe. The results indicate that centralized and decentralized networks can achieve adequate performance. In this context, the transformation toward closed-loop supply chains is beneficial for all network structures. Furthermore, circular factories outperform all network structures in the short term due to the in-house production of batteries and short transportation distances.