Closed-loop Supply Chain Design Research Articles

Product Modularity and the Design of Closed-Loop Supply Chains

While companies spend much effort on the design, analysis, and management of their forward supply chains, they need to pay the same attention to their reverse supply chain. Pioneering firms have learned that making product returns profitable relies on good design of the reverse chains' business processes, including integration with the forward chain. Product modularity offers new possibilities for supply chain design. Optimal closed-loop supply chain management requires three things. First, the type of return needs to be matched with the appropriate closed-loop supply chain. Second, through modular reuse, optimal value can be regained in closed-loop applications. Third, the value of reuse information may in some cases be higher than the value of the returns themselves.

Concurrent product and closed-loop supply chain design with an application to refrigerators

Increased concern for the environment has lead to new techniques to design products and supply chains that are both economically and ecologically feasible. A literature study shows that many models exist to support product design and logistics separately. In our research, we develop quantitative modelling to support decision-making concerning both the design structure of a product, i.e. modularity, reparability and recyclability, and the design structure of the logistic network. Environmental impacts are measured by linear-energy and waste functions. Economic costs are modelled as linear functions of volumes with a fixed set-up component for facilities. This model is applied to a closed-loop supply chain design problem for refrigerators using real life R&D data of a Japanese consumer electronics company concerning its European operations. The model is run for different scenarios using different parameter settings such as centralized versus decentralized processing, alternative product designs, varying return quality and quantity, and potential environmental legislation based on producer responsibility.