Managing closedloop supply chains simme douwe flapper. Reviewed 382 scientific papers on reverse logistics and closed loop supply chain. In the openloop supply chain, which is the traditional supply chain system, products do not return to the original producer. The manufacturer faces three different reverse channels, i.
The integration of forward and reverse supply chains is termed as closed loop supply chains clsc. Closedloop supply chain models with product remanufacturing. These product returns can be recovered and reentered in the forward supply chain. Gaps of related research is identified and future research opportunities are identified. Closed loop supply chains can help companies reduce waste and maximize resources, which is why a growing number of businesses are combining traditional supply.
Even if raw materials are used, the goal of the closed loop supply chain is to reduce the number of raw materials needed, through reclaiming and reusing postconsumer materials. Research on closed loop supply chain with reference price. Unlike in the closed loop or reverse supply chain, here the products are either recovered by other parties willing and able to reuse the materials or products, or are disposed in landfills andel, 1997. Firstly, a closedloop supply chain cuts production costs and improves a companys bottom line. From conceptual to an action oriented framework on core acquisition jighyasu gaur a, ramesh subramoniam b, kannan govindan c, donald huisingh d. The supply chain encompasses all activities associated with the flow and transformation of goods from raw materials stage extraction, through to the end user, as well as the associated. How a closed loop supply chain can help reduce product waste.
The problem with most current closed loop supply chains is that they are productspecific. Applying a stochasticpossibilistic programming method to cope with the uncertainty. They proposed different design options for a closed loop supply chain concentrating on the handling the reverse material flows to reintegrate them into their genuine supply chains. The key themes that came out of the literature are. W hile conventional supply chains seek to efficiently move products in a linear fashion from raw materials to end consumers, a circular or closedloop supply chain is one that is also dependent on feeding used products back as raw materials. In the open loop supply chain, which is the traditional supply chain system, products do not return to the original producer. View closed loop supply chain research papers on academia. An introduction to creating a closedloop supply chain. When planning and operating a supply chain, not only the technical part has to be considered but also how to achieve efficiency and effectiveness of the supply chain, the regulatory setting, value proposition, profitability and supply chain design tummala, phillips, johnson, 2006. The company closing the supply chain may be the original equipment manuf turer oem, a distribution partner or a third party not involved in the f ward distribution. Material and information flow both up and down the supply chain. Case study research in supply chains an outline and three. Materials are mined, manufactured as products and often end up in landfills after use. A closed loop supply chain and reusing products thus becomes more relevant.
Multistage stochastic and robust optimization for closed. Therefore, closed loop supply chains have traditional forward supply chain activities and a set of additional activities required for the reverse supply chain. However, the term can also be used to refer to corporate takeback programs, where companies that produce a good are also responsible for its disposal. Krikke studied the impact of a copier manufacturers supply chain on the total carbon footprint of the product and in the handling of endoflife vehicles. Importance of closed loop supply chain in the product. Optimal production policy for a closedloop supply chain.
Traditional supply chains are linear, said the report. Apr 21, 2017 in its latest sustainability report apple said it was aiming for a closedloop supply chain that would eliminate the need for mining, though it has set no date for achieving this. What is the difference between close loop supply chain and. Smart management of closedloop supply chains means profitable recovery of value from these items products, functional components, materials or packaging. Aug 27, 2014 this paper considers a closed loop supply chain with the manufacturer as the stackelberg leader. Traditional open loop forward supply chain definition. Apple aims for closedloop supply chain supply management. New developments to improve the sustainability of business practices mark e.
Jan 31, 2017 many leading companies are already using closed loop approaches and achieving cost savings from these efforts. Regarding the recent definition of a closedloop supply chain, we should mention the elevated description of clsc based on current requirements found in guide and van wassenhove. Closed loop supply chain is when you recover a product from a customer in exchange for value and recycle the product for profit and gain by putting it through quality check an. Integrating such reverse supply chains with traditional forward supply chains, covering all processes and actors from raw material extraction to the final end customer, results in closed loop. Traditional open loop forward supply chain what is it. Finally, we discuss the management of each of the different supply chain systems, and identify the key research. Ideally, a virgin input enters the system only once and is recycled forever. Closedloop supply chain ideally, a zerowaste supply chain that completely reuses, recycles, or composts all materials. After each case, we summarize and discuss the distinguishing features of the supply chains.
Closedloop supply chain activities such as remanufacturing, recycling, dismantling for spare parts, and reverse logistics have helped many companies tap into new revenue streams by. The modularity of the computers and dells use of demand management techniques combines with. The term closed loop supply chain is applied to a chain that consists of both reverse and forward supply. The model also results in a fact that with the implication of the extended supply chain, a. A system used for production planning and inventory control, with an information feedback feature that enables plans to be checked and adjusted. The supply chain encompasses all activities associated with the flow and transformation of goods from raw materials stage extraction, through to the end user, as well as the associated information flows. This paperproposes a multiobjective, multistage programming model to design a sustainable closed loop supply chain network considering financial decisions. The reference price affects the purchase decision of consumers. Closed loop supply chain description the full technique overview is available for free. When a closed loop supply chain is designed, the product must be designed so that it can easily be recycled back into the supply chain. The use of supply chain partnerships allow for vendor managed inventory. A previously discarded product can therefore be repaired, resold or even dismantled for parts. Apple has pledged to build its iphone from entirely recycled materials.
Based on environmental, legal, social, and economic factors, reverse logistics and closed loop. A forward supply chain is all processes involved in the creation of new products from raw materials through to their distribution to consumers. Traditional also known as open loop or forward supply chain is a system whose constituent parts include material suppliers. Apple wants to stop mining and start making everything. Unlike in the closedloop or reverse supply chain, here the products are.
Closed loop supply chain management and reverse logistics a literature 157 3. In return evaluation stage, possible decisions on return products are made. Why you should aim for a closedloop supply chain articles. A closedloop supply chain is designed and managed in such a way as to combine both forward and reverse supply chains. Completing the supply chain loop cognizant 2020 insights executive summary traditionally, businesses have concentrated on improving the forward supply chain. Business aspects of closedloop supply chains editors. On behalf of the manufacturer, the retailer collects the used items.
Some of the key results of this paper demonstrate that in a closed loop supply chain, the retailer has an important dual role due to his proximity to the market. In its latest sustainability report apple said it was aiming for a closedloop supply chain that would. This paperproposes a multiobjective, multistage programming model to design a sustainable closedloop supply chain network considering financial decisions. Another illustration of a generic form of closed loop supply chain is found in beamon, 1999. Closedloop supply chains clsc are supply chain networks that include the returns processes and the manufacturer has the intent of capturing additional value and further integrating all. Mar 22, 2017 before we understand the difference, let us understand the two systems. Smart management of closed loop supply chains means profitable recovery of value from these items products, functional components, materials or packaging. Closed loop supply chain is when you recover a product from a customer in exchange for value and. In the following sections we document a number of diverse products that are presently being remanufactured and describe their supply chains. Extant literature on core acquisition management suggests that researchers have not considered behavioral aspect of consumers. Sep 14, 2006 closed loop supply chain ideally, a zerowaste supply chain that completely reuses, recycles, or composts all materials. A closed loop supply chain is designed and managed in such a way as to combine both forward and reverse supply chains. Closed loop supply chain clsc focuses on acquiring the coresproduct returns from consumers, recovering their residual value, and remarketing them. A multiproduct, sustainable closed loop plastic supply chain network design problem which encompasses economic, environmental and social objectives is modeled in a mathematical manner.
Krikke studied the impact of a copier manufacturers supply chain on. This paper considers a closedloop supply chain with one manufacturer and one retailer for trading a single product. Closed loop supply chain management and reverse logistics a. A forward supply chain is all processes involved in the. Logistical model for closed loop recycling of textile. Wassenhove 5 closedloop supply chain management is the design, control and operation of a system to maximize value creation over the entire life cycle of a product with. Closed loop supply chain activities such as remanufacturing, recycling, dismantling for spare parts, and reverse logistics have helped many companies tap into new revenue streams by finding secondary markets for their products, all while reducing their overall carbon footprint. Designing a novel sustainable closed loop supply chain with routing and inventory.
Developing a new hybrid metaheuristic algorithm to efficiently solve the problem. Based on game theory, we discuss the reference price effect on the performances across. Integrating such reverse supply chains with traditional forward supply chains, covering all processes and actors from raw material extraction to the final end customer, results in closed. Before we understand the difference, let us understand the two systems. Traditional also known as open loop or forward supply chain is a system whose constituent parts include material suppliers, production facilities, distribution services and customers linked together by the feed forward flow of materials and feedback flow of information stevens, 1989. He found that customers knowledge of a products carbon footprint can. When planning and operating a supply chain, not only the technical part has to be considered but also how to achieve efficiency and effectiveness of the. Closed loop supply chains clsc are supply chain networks that include the returns processes and the manufacturer has the intent of capturing additional value and further integrating all supplychain activities guide et al. The uncertainties associated with this application include forward demands, the quantity and quality of used products to be collected, and the carbon tax rate. Jan 30, 2017 the trend is to establish closed loop supply chains, where previously discarded products circle back into the value chain and minimize waste. W hile conventional supply chains seek to efficiently move products in a linear fashion from raw. Cocacola european partners, for example, is collaborating with recyclers, packaging manufacturers and other firms across the supply chain to cut costs and materials used.
Apple just needs to figure out how to make the closed loop supply chain scale. Supply chain integration modeling, optimization, and applications sameer kumar, series advisor university of st. Traditional open loop forward supply chain what is. This paper considers a closed loop supply chain with the manufacturer as the stackelberg leader. A multistage stochastic programming model for sustainable. Various businesses have begun implementing sustainability initiatives as a way to reduce waste, but also gain profit from both. The traditional definition of supply chain management scm is a process of planning, implementing and controlling the operations from a supplier to a set of customers. Pdf closedloop supply chain management is the extension of forward supply chains with a reverse supply chain reverse logistics and is concerned.
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