In the following sections we document a number of diverse products that are presently being remanufactured and describe their supply chains. In this paper, we examine the legislative framework, the involved stakeholders and followed practices regarding closedloop supply chains for ict. Apple has pledged to build its iphone from entirely recycled materials. Apple aims for closedloop supply chain supply management. Closedloop supply chain ideally, a zerowaste supply chain that completely reuses, recycles, or composts all materials.
An introduction to creating a closedloop supply chain. Heres some food for thought before establishing yours. Based on the new definition, 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 dynamic recovery of. Closedloop supply chain network equilibrium model with. Closedloop supply chain clsc, as a driving force for sustainable. 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. More specifically, the sale of recovered outputs would boost revenues while the recovered outputs can be used as production inputs, thereby lowering raw material costs. Furthermore, closed loop supply chain may extend supply chain management after the point of consumption and examine how to extend the endofuse period through resell, refurbishment and recycling 15.
The model also results in a fact that with the implication of the extended supply chain, a. Finally, we discuss the management of each of the different supply chain systems, and identify the key research. Closedloop supply chain is the combination of forward and reverse flows of products and information in the supply chain that circulates an ongoing flow of products. Closed loop supply chain description the full technique overview is available for free. Smart management of closed loop supply chains means profitable recovery of value from these items products, functional components, materials or packaging. Pdf closed loop supply chain management and reverse.
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 2009. The critical factors for successful closedloop supply. 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. The critical factors for successful closedloop supply chains.
Request pdf fourlevel closed loop supply chain with remanufacturing this paper addresses the coordination of order quantities in a fourlevel closed loop supply chain clsc with remanufacturing. The retailer is often of less importance in terms of valueaddition in the supply chain, and is treated as an intermediary between the manufacturer and the end product consumers see e. Apple wants to stop mining and start making everything. Why you should aim for a closedloop supply chain articles. A three level framework for closedloop supply chain. Supply chain integration modeling, optimization, and applications sameer kumar, series advisor university of st. Innovative solutions for logistics and sustainable supply chain management in the context of industry 4. Closed loop supply chain clsc, as a driving force for sustainable. In recent years, sustainability concept has been introduced to many fields including management, technology, and supply chain.
How creating a closedloop supply chain can make businesses. Product returns may occur due to retailer overstocks and consumer dissatisfaction, extended producer responsibility legislation, or the potential profits. Elements including low carbon and environmental protection must be included in the entire logistics and supply chain to realize a. New developments to improve the sustainability of business practices mark e. 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. In the management of the closed loop supply chain, the recycling of waste products and decisionmaking on pricing often directly affect the supply and demand of products and the operation.
In a closed loop supply chain clsc network, forward flows satisfy demands for new products, while reverse flows represent collection and remanufacturing or recycling of returned products. Supply chain management scm has become an important competitive approach for organizations in this environment. A study of the closedloop supply chain coordination on. A closedloop supply chain is designed and managed in such a way as to combine both forward and reverse supply chains. 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. 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 finding secondary markets for their products, all while reducing their overall carbon footprint. Loops can be closed by several options, for example, by reusing the whole product, reusing the. Smart management of closedloop supply chains means profitable recovery of value from these items products, functional components, materials or packaging. Before we understand the difference, let us understand the two systems. Closed loop supply chains clsc in a closed loop supply chain clsc, there are, in addition to the forward physical flows described above, reverse physical flows of used products or components from customers to manufacturers and possibly.
The academic community has been able to determine corresponding author. Closed loop supply chain management clscm supply chain is a set of activities that includes purchasing, manufacturing, logistics, distribution, marketing, that perform the function of delivering value to end customer turan paksoy, 2011. The modularity of the computers and dells use of demand management techniques combines with. In the openloop supply chain, which is the traditional supply chain system, products do not return to the original producer. Closed loop supply chains can help companies reduce waste and maximize resources, which is why a growing number of businesses are combining traditional supply chains forward logistics with reverse logistics, business2community reports reverse logistics requires the manufacturer to encourage the products return either for repair or resale, or, if those scenarios arent viable, then. Closedloop supply chain network design with multiple. Closing the global supply chain loop supply chain 247. The trend is to establish closed loop supply chains, where previously discarded products circle back into the value chain and minimize waste. The term supply chain management evolved primarily out of logistics along with a number of other disciplines such as goods brokering, insurance, transportation, and ecommerce. Eindhoven university of technology master evaluating the. Cocacola european partners, for example, is collaborating with recyclers, packaging manufacturers and other firms across the supply chain to cut costs and materials used. 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. Closedloop supply chain models with product remanufacturing. Business aspects of closedloop supply chains editors.
Reverse supply chain is also part of 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. A closedloop supply chain essentially combines the traditional supply chain forward logistics with reverse logistics, considering the item after its served its original purpose. Unlike in the closedloop 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. Nov 04, 2010 logistics development award 2005 wyndham cramer closed loop supply chainclosed loop supply chain consists of a forward movement at the beginning of its life cycle retrieval and reprocessing at the end of its life reverse supply chain. Apple makes closed loop recycling pledge financial times. A remarkable and significant trend has been the recognition of the strategic importance of reverse logistics and closed loop supply chain clsc as a consequence of the directive on waste of electrical and electronic equipment. Closed loop supply chain management and reverse logistics. Closed loop supply chain, orderupto policy, advance notice, lead time, random yield acknowledgements this research was financially supported by the japan society for.
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. We develop an interfirm shipping pallet supply chain model and explore. 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 supplychain activities guide et al. Jan 31, 2017 many leading companies are already using closed loop approaches and achieving cost savings from these efforts. Managing closedloop supply chains simme douwe flapper. A study of the closedloop supply chain coordination on waste. Bicriteria network design model for a closed loop supply chain 111. The recycling of waste products can sharply save manufacturing cost and improve the economic efficiency and corporatereputation. 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. Reuse involves the reprocessing portion of reverse logistics activities, and is increasingly being considered to include both internal and external flows.
Introduction to management of reverse logistics and closed loop. While logistics activities involve material flow forward through the supply chain, reverse logistics addresses the return flows from the user and encompasses the reprocessing into a usable product fleischmann et al. May 28, 2014 dells supply chain brings closed loop recycling advantage. Even if raw materials are used, the goal of the closedloop supply chain is to reduce the number of raw materials needed, through reclaiming and reusing postconsumer materials. The integration of forward and reverse supply chains is termed as closed loop supply chains clsc. Closed loop supply chains give the opportunity to use more environmental friendly materials, and to use the postconsumer waste created. Applying environmental issues to scm is referred to as green supply chain management gscm 20. Materials are mined, manufactured as products and often end up in landfills after use.
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. 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 closedloop. A closed loop supply chain is designed and managed in such a way as to combine both forward and reverse supply chains. Ongoing economic volatility and the growing global focus on sustainability are placing more pressure on logistics managers to establish a strategic, alternative distribution network. Pdf management of a supply chain is a complex process to model and optimize.
In this paper, we examine the legislative framework, the involved stakeholders and followed practices regarding closed loop supply chains for ict. Closed loop supply chain management and reverse logistics a literature 157 3. 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. Specification and exploration of an agentbased model christopher s. Publications hamburg international conference of logistics. Sep 14, 2006 closed loop supply chain ideally, a zerowaste supply chain that completely reuses, recycles, or composts all materials. Completing the supply chain loop cognizant 2020 insights executive summary traditionally, businesses have concentrated on improving the forward supply chain for their products e. A sustainable future for closed loop supply chains. Retailerdriven closedloop supply chains with product. Therefore, closedloop supply chains have traditional forward supply chain activities and a set of.
The trend is to establish closedloop supply chains, where previously discarded products circle back into the value chain and minimize waste. The most accepted definition for sustainable supply chain management sscm would be one where all consumer products are created, used, and recycled or disposed of in the closed loop method. After each case, we summarize and discuss the distinguishing features of the supply chains. Apr 20, 2017 apple makes closed loop recycling pledge. Pfaffmannb adepartment of economics, lafayette college, 111 quad drive, easton pa 18042, usa. Therefore, closed loop supply chains have traditional forward supply chain activities and a set of. Each year we send the cdp supply chain survey to suppliers who represent approximately 80 percent of our total spend.
Traditional supply chains are linear, said the report. A supply chain is coordinated if all supply chain members adopt the actions that optimize the entire systems performance. 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. Reviewed 382 scientific papers on reverse logistics and closed loop supply chain.
Various businesses have begun implementing sustainability initiatives as a way to reduce waste, but also gain profit from both the forward and reverse supply chains, business 2 community wrote last week. Dells supply chain brings closedloop recycling advantage. In this paper, we analyse the transformation from an open loop supply chain to a closed loop supply chain. Supply chain management and closedloop supply chain management. 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. Mar 22, 2017 before we understand the difference, let us understand the two systems. Creating a secondary life cycle and repeating step 1 and 2. In the management of the closedloop supply chain, the recycling of waste products and decisionmaking on pricing often directly affect the supply and demand of products and the operation. How a closed loop supply chain can help reduce product waste.
Apple just needs to figure out how to make the closed loop supply chain scale. What is the difference between close loop supply chain and. One day wed like to be able to build new products with just recycled materials, including. 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. The need to understand the reverse logistics and closed loop supply chain has become. Firstly, a closedloop supply chain cuts production costs and improves a companys bottom line. Closedloop supply chain description the full technique overview is available for free.
A forward supply chain is all processes involved in the creation of new products from raw materials through to their distribution to consumers. Pdf there are numerous examples and cases available of products that are being reused via remanufacturing or recycling, or combinations. Pdf strategic alliance in a closedloop supply chain, a. Logistics development award 2005 wyndham cramer closed loop supply chainclosed loop supply chain consists of a forward movement at the beginning of its life cycle retrieval and reprocessing at the end of its life reverse supply chain. In the open loop supply chain, which is the traditional supply chain system, products do not return to the original producer. Closed loop supply chain management and reverse logistics a. Supply chain coordination is among the central issues in supply chain management.
Gaps of related research is identified and future research opportunities are identified. The use of supply chain partnerships allow for vendor managed inventory. Closed loop supply chain management clscm refers to all forward logistics in. The major difference between closed loop supply chains and traditional forward supply chains is for a forward supply chain the customer is at the end of the processes, and for a closed loop supply chain there is value to be recovered from the customer or enduser. Introduction many industries have experienced increasing globalization and a shifting focus to competition among networks of companies. Furthermore, closedloop supply chain may extend supply chain management after the point of consumption and examine how to extend the endofuse period through resell, refurbishment and recycling 15. Based on environmental, legal, social, and economic factors, reverse logistics and closed loop. Focus on sustainable development and green economics has. Materials are mined, manufactured as products and often end up in. The truth is supply chain management can be traced back all the way to. We know that the majority of our spending is with suppliers who track ghg emissions or have plans to do so. Strategic alliance in a closed loop supply chain, a case of manufacturer and econonprofit organization. A framework for closedloop supply chains of reusable articles. New developments to improve the sustainability of business practices supply chain integration modeling.
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