Finally, we discuss the management of each of the different supply chain systems, and identify the key research. Smart management of closedloop supply chains means profitable recovery of value from these items products, functional components, materials or packaging. 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. A closed loop supply chain is designed and managed in such a way as to combine both forward and reverse supply chains. 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. Why you should aim for a closedloop supply chain articles. A study of the closedloop supply chain coordination on. Closedloop supply chain clsc, as a driving force for sustainable. 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. Based on environmental, legal, social, and economic factors, reverse logistics and closed loop. Gaps of related research is identified and future research opportunities are identified. Publications hamburg international conference of logistics.
The critical factors for successful closedloop supply. Firstly, a closedloop supply chain cuts production costs and improves a companys bottom line. Eindhoven university of technology master evaluating the. May 28, 2014 dells supply chain brings closed loop recycling advantage. Supply chain management and closedloop supply chain management. Heres some food for thought before establishing yours.
New developments to improve the sustainability of business practices mark e. The need to understand the reverse logistics and closed loop supply chain has become. Reuse involves the reprocessing portion of reverse logistics activities, and is increasingly being considered to include both internal and external flows. 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. Closed loop supply chain description the full technique overview is available for free. The use of supply chain partnerships allow for vendor managed inventory. Reviewed 382 scientific papers on reverse logistics and closed loop supply chain. A study of the closedloop supply chain coordination on waste. 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. Closed loop supply chain management clscm refers to all forward logistics in. Cocacola european partners, for example, is collaborating with recyclers, packaging manufacturers and other firms across the supply chain to cut costs and materials used. 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. Apple makes closed loop recycling pledge financial times.
Creating a secondary life cycle and repeating step 1 and 2. The trend is to establish closed loop supply chains, where previously discarded products circle back into the value chain and minimize waste. Rl is assumed to be the nucleus of closed loop supply chain clsc. Loops can be closed by several options, for example, by reusing the whole product, reusing the. Therefore, closed loop supply chains have traditional forward supply chain activities and a set of. The critical factors for successful closedloop supply chains. 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. 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. Jan 31, 2017 many leading companies are already using closed loop approaches and achieving cost savings from these efforts. Innovative solutions for logistics and sustainable supply chain management in the context of industry 4. A forward supply chain is all processes involved in the creation of new products from raw materials through to their distribution to consumers. Ongoing economic volatility and the growing global focus on sustainability are placing more pressure on logistics managers to establish a strategic, alternative distribution network.
Apple just needs to figure out how to make the closed loop supply chain scale. Closed loop supply chain management and reverse logistics a literature 157 3. Introduction closing supply chains refers to taking care of items once they are no longer desired or can no longer be used by their user. 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. Business aspects of closedloop supply chains editors. Closed loop supply chain clsc, as a driving force for sustainable.
The model also results in a fact that with the implication of the extended supply chain, a. 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. Therefore, closedloop supply chains have traditional forward supply chain activities and a set of. Strategic alliance in a closed loop supply chain, a case of manufacturer and econonprofit organization. Closedloop supply chain ideally, a zerowaste supply chain that completely reuses, recycles, or composts all materials. 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. Materials are mined, manufactured as products and often end up in. Pfaffmannb adepartment of economics, lafayette college, 111 quad drive, easton pa 18042, usa. 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. Once the item has been manufactured, shipped, and distributed through a reseller. Apple aims for closedloop supply chain supply management. In recent years, sustainability concept has been introduced to many fields including management, technology, and supply chain. Closing the global supply chain loop supply chain 247.
Each year we send the cdp supply chain survey to suppliers who represent approximately 80 percent of our total spend. 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. 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. A closedloop supply chain essentially combines the traditional supply chain forward logistics with reverse logistics, considering the item after its served its original purpose. Smart management of closed loop supply chains means profitable recovery of value from these items products, functional components, materials or packaging. An introduction to creating a closedloop supply chain. A sustainable future for closed loop supply chains. Sep 14, 2006 closed loop supply chain ideally, a zerowaste supply chain that completely reuses, recycles, or composts all materials. 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. Reverse logistics rl and its natural extension, closedloop supply chains clsc, are still in their infancy as academic disciplines, especially when compared with the enormous amount of scientic literature focusing on the forward supply chain. In this paper, we examine the legislative framework, the involved stakeholders and followed practices regarding closedloop supply chains for ict.
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. In the open loop supply chain, which is the traditional supply chain system, products do not return to the original producer. Pdf closed loop supply chain management and reverse. 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. 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. One day wed like to be able to build new products with just recycled materials, including. What is the difference between close loop supply chain and. Pdf management of a supply chain is a complex process to model and optimize. 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. Supply chain coordination is among the central issues in supply chain management. Pdf strategic alliance in a closedloop supply chain, a. Managing closedloop supply chains simme douwe flapper. The academic community has been able to determine corresponding author. Apple has pledged to build its iphone from entirely recycled 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. 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. In order to maximize this possible benefit, this project evaluated the co 2 emissions, energy use and the cost impact created by transportation and recycling. Closedloop supply chains clsc in a closedloop 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. A three level framework for closedloop supply chain. 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. Materials are mined, manufactured as products and often end up in landfills after use. Specification and exploration of an agentbased model christopher s. 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 description the full technique overview is available for free. In the following sections we document a number of diverse products that are presently being remanufactured and describe their supply chains.
The trend is to establish closedloop supply chains, where previously discarded products circle back into the value chain and minimize waste. 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. 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 modularity of the computers and dells use of demand management techniques combines with.
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. Closedloop supply chain models with product remanufacturing. Supply chain integration modeling, optimization, and applications sameer kumar, series advisor university of st. We know that the majority of our spending is with suppliers who track ghg emissions or have plans to do so. Closed loop supply chains give the opportunity to use more environmental friendly materials, and to use the postconsumer waste created. In this paper, we analyse the transformation from an open loop supply chain to a closed loop supply chain. The recycling of waste products can sharply save manufacturing cost and improve the economic efficiency and corporatereputation. How a closed loop supply chain can help reduce product waste. In the openloop supply chain, which is the traditional supply chain system, products do not return to the original producer. 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.
Applying environmental issues to scm is referred to as green supply chain management gscm 20. 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. Fourlevel closed loop supply chain with remanufacturing. It also has a great effect on the environment and resources protection. The integration of forward and reverse supply chains is termed as closed loop supply chains clsc. How creating a closedloop supply chain can make businesses. Dells supply chain brings closedloop recycling advantage. Closedloop supply chain network design with multiple. 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. Product returns may occur due to retailer overstocks and consumer dissatisfaction, extended producer responsibility legislation, or the potential profits. Jan 30, 2017 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. 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 supply chain integration modeling. Closed loop supply chain, orderupto policy, advance notice, lead time, random yield acknowledgements this research was financially supported by the japan society for.
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. 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. Apple wants to stop mining and start making everything. Retailerdriven closedloop supply chains with product.
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. A closedloop supply chain is designed and managed in such a way as to combine both forward and reverse supply chains. Apr 20, 2017 apple makes closed loop recycling pledge. Before we understand the difference, let us understand the two systems. 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. Traditional supply chains are linear, said the report.
We develop an interfirm shipping pallet supply chain model and explore. 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. 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. 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. Introduction to management of reverse logistics and closed loop. 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.
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. Mar 22, 2017 before we understand the difference, let us understand the two systems. Closed loop supply chain management and reverse logistics. Supply chain management scm has become an important competitive approach for organizations in this environment. A framework for closedloop supply chains of reusable articles. Closedloop supply chain network equilibrium model with.
Closed loop supply chain management and reverse logistics a. A supply chain is coordinated if all supply chain members adopt the actions that optimize the entire systems performance. 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. Introduction many industries have experienced increasing globalization and a shifting focus to competition among networks of companies. Bicriteria network design model for a closed loop supply chain 111. New developments to improve the sustainability of business practices supply chain integration modeling, optimization and application ferguson, mark e. After each case, we summarize and discuss the distinguishing features of the supply chains. Focus on sustainable development and green economics has. Pdf there are numerous examples and cases available of products that are being reused via remanufacturing or recycling, or combinations. The truth is supply chain management can be traced back all the way to. 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. In this paper, we examine the legislative framework, the involved stakeholders and followed practices regarding closed loop supply chains for ict.
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