Abstract
In the era of global financial crisis, every penny counts. Thus, the exclusive use of virgin materials for production no longer makes economic sense. As a viable alternative to the use of virgin materials, recycling has become a popular business practice. Recycling, however, requires dramatic changes in business paradigms that include the coordination of both forward and reverse logistics flows, the substitution of disposal for salvage, and the tracing of products throughout their entire life cycles. These changes are often preceded by cultural changes across the supply chain. To embark on the successful change in reverse logistics activities, this paper proposes a Theory of Constraints (TOC) that can map necessary changes in the supply chain and guide those changes within various system constraints. The usefulness of TOC is validated by applying it to the recycling processes of automobile tyres in the burgeoning Chinese automobile industry.
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