Simultaneous optimisation of forward and reverse distribution processes with multiple types of reuse within an industrial tool supply chain

Abstract

In this article, we present a quantitative approach for the simultaneous coordination of forward and reverse material flows which is motivated by a real-life case of an international supply chain network in the industrial tool industry. The objective is to optimise the quantitative supply chain network processes related to procurement, production and transportation. Moreover, we consider multiple types of reuse, including remanufacturing and recycling processes, in a medium-term planning horizon. To model the three echelon production-distribution network, mixed integer linear programming is used as it offers a modular modelling technique. The implementation of a quantitative plan in a complex business network structure requires a big-bucket model solution to grant the plan's stability via sufficient time buffers. The main contribution of the paper can be found in the combined remanufacturing and recycling in a quantitative planning model, when the interdependencies between new and used products are relevant and significant.