Closed-loop Supply Chain Systems Research Articles

A coordination model for closed-loop supply chain systems with a single manufacturer and retailer

This paper develops a coordination model for a closed-loop supply chain (CLSC) system consisting of a single manufacturer and retailer where market demand depends on the green technology level, retailer’s selling price, and promotional efforts. The manufacturer manufactures products from raw materials to finished products and adapts them for sale to meet key market demands. Used products from consumers will be returned to the retailer to be processed by remanufacturing under a technology license, and the rest will be returned to the manufacturer for remanufacturing, refurbishing, recycling, or waste disposal. The models are formulated mathematically and constructed under three scenarios – centralized, decentralized, and a Stackelberg game led by the manufacturer. Numerical examples are given to illustrate the results of the developed model. The result suggests that both types of investment can assist the closed-loop supply chain in enhancing its financial and environmental performance. It also suggests that lowering emissions levels through green technology might increase product selling prices, hence increasing sales volume.

Goal programming and multi-criteria methods in remanufacturing and reverse logistics: Systematic literature review and survey

Environmental concerns, largely caused by a linear take-make-dispose model of manufacturing, have raised the need to incorporate the flow of used products to capture their residual value, thus shifting the traditional linear model to a more circular one. Remanufacturing is considered a key element in achieving circularity goals, as it offers greater environmental and economic benefits than other existing used product recovery options. The incorporation of used products in the supply chain poses challenging problems in which it is often necessary to consider trade-offs between different conflicting objectives, where multi-criteria decision-making methods, such as goal programming (GP), are mostly used. Since the last known review of the literature about these topics considers publications up to the year 2017, and it is observed that the number of publications has been growing significantly in recent years, it seems appropriate to carry out a more up-to-date review. This paper presents a review of the recent literature on GP and other multi-criteria methods applied to closed-loop supply chain systems, with focus on reverse logistics and remanufacturing as one of the most frequently recovery option used in the industry. The review was carried out in a systematic manner, using four of the most recognized scientific document repositories and a period of time for publications ranging from 2011 to 2021. After a detailed filtering process of almost 150 documents initially found, a final database of 38 documents was obtained for an in-depth review. The 38 documents were classified in three categories: supply chain management and design, strategic decisions in circular economy, and production planning. Half of the documents reviewed fall into the category of production planning, with a particular interest in disassembly planning issues and the advantages offered by technological advances such as the Internet of Things (IoT). It was observed that most of the investigations consider the economic and environmental dimensions, leaving aside the social dimension. This confirms a trend previously observed in the literature. In addition, a global analysis of the collected documents was carried out to determine which are the most used decision-making criteria for closed-loop systems with product recovery. Legal, production planning and life cycle assessment aspects that deserve further study in the future are also suggested.

Analysis of Green Closed-Loop Supply Chain Efficiency under Generalized Stochastic Petri Nets

In this paper, we aim to explore the operational performance of a green closed-loop supply chain under random events. A green closed-loop supply chain model based on generalized stochastic Petri nets (GSPN) is built using the Petri nets theory. According to the isomorphic relationship between GSPN and continuous-time Markov chains, the relevant Markov model is converted from GSPN, and the steady-state probability of the model is then calculated. Finally, the model is analyzed from the aspects of time performance and operation efficiency of each link. Compared to previous studies, this paper finds that: when the whole green closed-loop supply chain system reaches a dynamic equilibrium state, the product has a steady-state probability at all stages, and thus the overall operational performance of the system can be obtained; compared with the recycling of waste products, the green product takes a longer time in the production and distribution stages; since marketing, packaging processing, market feedback, and market demand formulation account for a high level of utilization throughout the life cycle of green products, decision makers need to focus on the supervision and management of these links. Managers of green closed-loop supply chain systems need to adjust their decision-making strategies in a timely manner according to the performance level of the system in the steady state to realize the efficient operation of the system. This paper not only provides theoretical support for the improvement of the operational efficiency of green closed-loop supply chain system, but also provides new ideas for the research of green closed-loop supply chain operation mode.

Switching Control of Closed-Loop Supply Chain Systems with Markov Jump Parameters

The switching system model of a closed-loop supply chain with Markov jump parameters is established. The system is modeled as a switching system with Markov jump parameters, taking into account the uncertainties of the process and the inventory decay factors. The Markov switching idea is applied to the controller design and performance analysis of the system to effectively suppress the bullwhip effect while ensuring the stability of the closed-loop supply chain system. Simulation examples are presented to illustrate the validity of the results obtained.

Leveraging the circular economy with a closed-loop supply chain and a reverse omnichannel using blockchain technology and incentives

PurposeThis paper aims to analyze the benefits of the blockchain to the circular economy (CE), which is composed of both closed-loop supply chain (CLSC) systems and reverse omnichannel solutions. By ensuring transparency, traceability, visibility and security, the blockchain allows firms to acquire operational capabilities through a CLSC and service capabilities through a reverse omnichannel, which can boost business performance considerably. The related network of relationships can be reinforced by establishing incentives, which entail both smart contracts in the blockchain and active return approaches in CE.Design/methodology/approachAfter identifying the boundaries of the theoretical framework, several research hypotheses are developed according to the literature review and emerging gaps. These gaps link to the impact of the blockchain on CE systems (CLSC and reverse omnichannel), as well as the influence on business performance. The hypotheses are then tested using structural equation modeling and adopting a partial least squares-path modeling technique on a dataset composed of 157 firms. Finally, multigroup analysis is used to test the impact of incentives on the research hypotheses.FindingsThe blockchain facilitates a more efficient CE system, although reverse omnichannel solutions seldom bring any benefits to performance. The shift from a passive to an active return approach must be carefully evaluated. The CLSC network can benefit from an active return approach by developing appealing incentives for collectors and enhancing the positive effects of the blockchain. In contrast, consumer incentives can have detrimental effects on the blockchain. Various combinations of incentives can only bring a few business performance increases, while collector incentives are vital to reinforce the CE system's operational and service capabilities.Originality/valueThis paper takes a new approach toward the study of CE, which considers a dual circular system composed of a CLSC and a reverse omnichannel. The research explores whether the adoption of blockchain technology enables better return processes by improving the operations in CLSC and services in reverse omnichannel. Finally, this is the first empirical work to evaluate the benefits emerging from incentives, which can activate smart contracts in the blockchain and enable active return approaches in CE.

Environmental sustainability EOQ model for closed-loop supply chain under market uncertainty: A case study of printer remanufacturing

The traditional economic order quantity (EOQ) model determines the optimal ordering strategy based on the premise that the market demand is constant, which leads to obvious deviations under uncertain circumstances. This work relaxes the limitations of the classical EOQ model and extends the application to closed-loop supply chain (CLSC) systems. First, through stochastic analysis, this revised model quantifies the impacts of market uncertainty on remanufacturing and operations processes. Then, by converting all the production indexes into carbon equivalent emissions, it conducts a comparative analysis of environmental efficiency under different acquisition scenarios. More importantly, based on the quantitative relationship between market uncertainty and production indexes, we devise an optimal ordering strategy for the maximization of environmental benefits under an arbitrary distribution of demand from the perspective of the entire CLSC. Finally, validated by numerical experiments and grounded with the data of printer remanufacturing, we demonstrate that the extended EOQ method can greatly reduce carbon equivalent emissions and improve environmental efficiency. This work provides a theoretical foundation for remanufacturers to formulate optimal ordering strategies under market uncertainty conditions while being more environmentally efficient without significantly increasing production input.

The Pricing Strategy of Dual Recycling Channels for Power Batteries of New Energy Vehicles under Government Subsidies

The vigorous development of the new energy automobile industry has highlighted the issue of efficient recycling of power batteries. Using a Stackelberg game, the pricing mechanism of dual-channel power battery recycling models under different government subsidies is investigated. Consequently, sensitivity analysis and comparison analysis are conducted, providing the pricing decision and the optimal profit of closed-loop supply chain (CLSC) systems. Finally, the effects of recycling efforts, power battery greenness levels, service levels, and consumer green recycling awareness on prices of power batteries and profits are determined through numerical simulations, and the optimal prices under different strategies are compared. The results indicate that recycling prices of each party in the manufacturer subsidy model are relatively high, and consumers’ green awareness and the green levels of power batteries are directly proportional to the recycling prices offered by recycling parties. Automobile 4S stores and recycling networks should pay attention to the balance between the increase in the cost and the quantity of government subsidies for their recycling efforts. For recycling enterprises, maintaining an appropriate service level can maximize their profits and positively motivate the development of them.

Reverse supply chain management in manufacturing industry: a systematic review

PurposeIn a quest to meet increasing pressure to incorporate environmental and sustainability factors due to the legislations and growing public awareness, companies are rethinking of strategizing their supply chain network to take control of the reverse flow of products as well. This growing interest has also led to tremendous growth in publications occurring in several reputed journals in the last few years. In this context, the purpose of this article is to perform a systematic literature survey of recent and state-of-the-art papers in order to draw insights and highlight the future directions.Design/methodology/approachThis paper has selected and reviewed 204 papers published from the year 2002–2017. The papers were collected from the web of science and Google scholar database which have the DOI number. The selected papers were then categorized into main five core areas of RSC management namely reverse supply chain (RSC), Reverse Logistics (RL), Remanufacturing, Closed-Loop Supply Chain (CLSC) and Product Recovery Systems (PRS) and then analyzed with great detail. Finally, the research gaps that were identified from the study have been highlighted for future research opportunities.FindingsThis paper would serve as a roadmap to the managers who wish to align their forward and reverse supply chains for overall growth and development. It provides an in-depth knowledge on RSC to the researchers working in this domain. The scholars would be able to identify the areas of RSC which have been already addressed and the areas which remain unaddressed.Originality/valueThis paper presents a systematic literature survey of state-of-the-art papers that was published in the reputed journal in the area of RSC. Total 204 numbers of papers which were published in the reputed journals between 2002 and 2017 are reviewed, categorized and analysed to draw the opportunities and future research direction in the area of RSC.

Research on the Pricing Strategy of “Internet +” Recycling Platforms in a Two-Sided Network Environment

“Internet +” platform recycling is an emerging business model with two-sided market characteristics. How to meet the needs of consumers and manufacturers and how to formulate a reasonable two-sided pricing structure have become challenges faced by recycling trading platforms. Based on the theory of a two-sided market, the pricing mechanism of a monopoly platform and a model of competing platforms are studied. Consequently, a sensitivity analysis and comparison analysis are conducted, giving a pricing decision and the optimal profit of closed-loop supply chain systems. Finally, through a numerical simulation analysis, the impacts of the inter-group network externalities, service differentiation, and the matching efficiency on e-waste recycling prices and profits are obtained. The result indicates that the influences of inter-group network externalities on monopoly platforms and competing platforms are different; thus, platforms should choose pricing strategies according to their own market position. The pricing of the two types of platform is inversely proportional to the time-sensitive coefficient of the two platforms, while it is directly proportional to the matching efficiency. The improvement of the differentiation of service will increase the pricing of the platform for single-homing manufacturers without affecting the multi-homing consumers, and profits will increase accordingly.

Necessary conditions for coordination of dual-channel closed-loop supply chain

In order to eliminate profit loss caused by decentralized decision-making in closed-loop supply chain systems, this paper adopts the method of optimization analysis and game theory to analyze the necessary conditions for manufacturers, retailers and third-party online recyclers to achieve interest coordination under equilibrium conditions. In addition, the robustness of the results is verified by numerical analysis. The results show that in order to make the total profit of decentralized decision-making equivalent to that of centralized decision-making, the recycling cost of retailers and third-party recyclers must be the same; new products must be shipped at zero profit, re-manufactured products shall be sold at the difference between the residual value of the recovered product and the cost of recovery, and the manufacturer's recycling price shall be determined by the cost of recycling and residual value. It implies that multi-channel recycling must be carried out under the premise of uniform recycling costs. At the same time as the elimination of the product price increase, the manufacturer's income must be guaranteed through agreements and other forms. The government can realize the recovery price in the direction of benefiting consumers by improving the residual value of used products and easing channel competition.

Screening Contract Excitation Models Involving Closed-Loop Supply Chains Under Asymmetric Information Games: A Case Study with New Energy Vehicle Power Battery

In closed-loop supply chain systems for power battery remanufacturing, recycling and dismantling tasks will be relegated to third-party recyclers. This has significant disadvantages, inasmuch as the asymmetric exchange of information regarding the level of recycling capacity and effort after signing a contract fiscal risks to the manufacturers. The purpose of this paper is to study the “adverse selection” of recyclers and “moral hazards” hidden in their purported effort levels, based on Information Screening Models in the principal-agent theory. Our information screening model for revenue sharing will be presented, and subsequently verified using numerical simulation to demonstrate the impact of the screening contract on the expected returns of both parties. Our results show that the sharing coefficient of the remanufacturing revenue for low-capability recyclers is distorted downwards, and only truthful reporting can retain profits. High-capacity recyclers will obtain additional information while retaining profit. At the same time, as the proportion of high-capacity recyclers in the market increases, the expected return of the entrusting party increases. One critical area where this will impact the Chinese economy is in the area of new energy vehicles. We investigate a case study of our approach in new energy vehicles, which are being used to reduced CO 2 emissions, but have environmentally hazardous batteries that must be recycled safely and economically.

Maintenance and remanufacturing strategy: using sensors to predict the status of wind turbines

The costs associated with inspecting wind turbines are high due to their size and complexity. One potential method by which such costs can be reduced, is through the development of robust systems that can monitor the conditions of wind turbines remotely. This study proposes embedding sensors into wind turbines to monitor the conditions of the wind turbines throughout their life cycles. The information retrieved from these sensors could be helpful in two ways: It could facilitate the provision of predictive maintenance for the turbines and enhance the performance of end-of-life (EOL) processing operations. During the maintenance phase, sensors can help to predict failures before they occur because they provide condition information about the products. During the EOL processing phase, they help to improve disassembly and inspection operations. Therefore, the use of embedded sensors in wind turbines could potentially reduce maintenance costs and increase EOL profit. This study compares regular and sensor-embedded wind turbine systems, which are modeled using discrete event simulation. A design of experiments study was carried out on the models. During the experimental stage, while conducting experiments, key variables, such as maintenance cost, disassembly cost, inspection cost, and EOL profit, were monitored. At the analysis stage, pairwise t-tests were performed to determine the statistical significance of the results. The results stage revealed that sensors can provide significant benefits to closed-loop supply chain systems when they are embedded into wind turbines.

The Effect of Marketing Effort on Dual-Channel Closed-Loop Supply Chain Systems

This paper explores a dual-channel closed-loop supply chain (CLSC) system consisting of a manufacturer and a retailer. The manufacturer is the CLSC Stackelberg leader. We investigate the effect of exerting marketing effort on the optimal decisions and profits of supply chain members by considering several marketing effort supported models, namely the models when the manufacturer is the investor, the retailer is the investor, and the centralized CLSC system, respectively. We propose a two-part tariff contract for coordinating the CLSC. We analytically reveal that the two-part tariff contract can coordinate the CLSC when the manufacturer is the investor but unable to coordinate supply chain when the retailer is the investor. Finally, we present the numerical analysis to uncover insights on how the consumers' preference toward the direct channel affects the optimal decisions in the dual-channel CLSC system.

Evaluation of Maintenance and EOL Operation Performance of Sensor-Embedded Laptops

Sensors are commonly employed to monitor products during their life cycles and to remotely and continuously track their usage patterns. Installing sensors into products can help generate useful data related to the conditions of products and their components, and this information can subsequently be used to inform EOL decision-making. As such, embedded sensors can enhance the performance of EOL product processing operations. The information collected by the sensors can also be used to estimate and predict product failures, thereby helping to improve maintenance operations. This paper describes a study in which system maintenance and EOL processes were combined and closed-loop supply chain systems were constructed to analyze the financial contribution that sensors can make to these procedures by using discrete event simulation to model and compare regular systems and sensor-embedded systems. The factors that had an impact on the performance measures, such as disassembly cost, maintenance cost, inspection cost, sales revenues, and profitability, were determined and a design of experiments study was carried out. The experiment results were compared, and pairwise t-tests were executed. The results reveal that sensor-embedded systems are significantly superior to regular systems in terms of the identified performance measures.

Impact of government incentive on price competition of closed-loop supply chain systems

ABSTRACTConsidering the adverse impact of used products in the environment, government has come forward to provide incentive to encourage remanufacturing. However, the importance of government incentives in remanufacturing systems has not received adequate attention in the literature. This paper focuses on how government incentives can affect business decisions of a three echelon remanufacturing system under price competition. For the analysis, we develop mathematical models for the remanufacturing configurations of decentralized and integrated systems. These models are illustrated through a numerical case study and the results show that the return rate and channel profit increases as the government incentive increases under perfect competition. By comparing various models, it is observed that an integrated system can increase the collection of the used products compared to the other systems. Finally, this paper presents a detailed comparative analysis of these systems and provides managerial insights for the management of remanufacturing systems.

Supplier selection and order allocation in closed-loop supply chain systems using hybrid Monte Carlo simulation and goal programming

Supplier selection is an important strategic design decision in closed-loop supply chain systems. In addition, and after identifying the candidate suppliers, optimal order allocations are also considered as crucial tactical decisions. This research presents a multi-objective optimisation model to select the best suppliers and configure manufacturing and refurbishing facilities with the optimal number of parts and products in a closed-loop supply chain network. The objective functions in this research are formulated as total profit, total defective parts, total late delivered parts and economic risk factors of the candidate suppliers. The proposed multi-objective model is solved by hybrid Monte Carlo simulation integrated with three different variants of goal programming method. The effectiveness of the mathematical model and the proposed solution algorithms in obtaining Pareto-optimal solutions is demonstrated in a numerical example adopted from a real case study.

System dynamics model for optimizing the recycling and collection of waste material in a closed-loop supply chain

To meet the immediate environmental challenges and sustainable development, Closed-loop Supply Chain (CLSC) management has become increasingly important and urgent. This is in lieu with some severe problems such as global ecological damage, resource wastages and shortages and pollution of the environment, and discretionary exploitation of natural resources. On the other hand, re-manufacturing of used merchandise and bringing them back to the market provides environmental and customer benefits to Original Equipment Manufacturers (OEMs), in addition to cutting back their production cost. This paper aims at evaluating the system behavior of an electrical manufacturing company as a case of study, by using System Dynamics (SD) simulating of Closed-loop Supply Chain (CLSC). VENSIM PLE software developed the simulation model. Based on the initial result, customer satisfaction and Green Image Factor (GIF) are lacking in the system. Therefore, to tackle this issue, an improvement model with a collection center was proposed. Results derived from the improved model presented a data of which the demand backlog level fell by 21.19%. Furthermore, the customer satisfaction in the system rose by 21.6%. In addition, as a result of an increase in GIF level from 14.80% to 48.1%, the return products rate rose from 184 items to 614. The method in this research can be used to investigate a variety of CLSC systems and their effects before implementing them in real life.