Closedloop supply chain definition 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. Pdf the concept of closedloop supply chain management is a very popular direction of research and companies activities. Supply chain management clscm refers to all forward logistics in the chain like procurement of materials, production and distribution. How a closed loop supply chain can help reduce product waste. Traditional open loop forward supply chain what is it. The critical factors for successful closedloop supply.
The goal of this paper is to develop a detailed understanding of the implica tions that a manufacturers reverse channel choice has. An introduction to creating a closedloop supply chain. View closed loop supply chain research papers on academia. 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.
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. 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. Finally, we discuss the management of each of the different supply chain systems, and identify the key research. This article investigates closedloop supply chain clsc as a process flow. Closed loop supply chain is different from the traditional supply chain.
Mitra 5 addressed the inventory management issue in closedloop supply chains, and developed deterministic and stochastic models for a two. This dedication is evident by the vast number of publications in scientific. Research on closed loop supply chain with reference price. Reviewed 382 scientific papers on reverse logistics and closed loop supply chain. 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. Closedloop definition, of or relating to a processing system in which effluents are recycled, that is, treated and returned for reuse. These types of closedloop supply chains may hold the greatest promise due to the volume of products available for reuse, but at the same time these types of supply chains represent some of. Mar 22, 2017 before we understand the difference, let us understand the two systems.
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. The most accepted definition for sustainable supply chain management sscm is creating, using, and recycling or disposing of all consumer products in a. 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. Closed loop supply chain management is defined as the design, control and operation of a system to maximize value creation over the entire lifecycle of a. The use of supply chain partnerships allow for vendor managed inventory. In the open loop supply chain, which is the traditional supply chain system, products do not return to the original producer. To make rational decisions about the structure of a reverse supply chain, its best to divide the chain into its five key components and analyze options, costs, and benefits for each. Closed loop supply chain management clscm refers to all forward logistics in. Even if raw materials are used, the goal of the closedloop supply chain is to reduce the number of raw materials needed. Materials are mined, manufactured as products and often end up in. 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 value from different types and volumes of returns over time. He found that customers knowledge of a products carbon footprint can.
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. Supply chain management supply chain management managing complex and dynamic supply and demand networks. Strategic alliance in a closed loop supply chain, a case of manufacturer and econonprofit organization. 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. Therefore, closed loop supply chains have traditional forward supply chain activities and a set of additional activities required for the reverse supply chain. The modularity of the computers and dells use of demand management techniques combines with. 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. The most accepted definition for sustainable supply chain management sscm is creating, using, and recycling or disposing of all consumer products in a closed loop method 7. The arising product flows pose novel challenges for supply chain management.
There are a number of companies in a variety of industries which have begun to integrate closedloop networks into their business operations. Apple aims for closedloop supply chain supply management. Strategic closedloop supply chain management baptiste. Increasing the efficiency through reduction of waste and cost of.
We believe our goal should be a closedloop supply chain, where products are built using only renewable resources or recycled material. A system used for production planning and inventory control, with an information feedback feature that enables plans to be checked and adjusted. 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. Reverse supply chain reverse supply chain refers to the movement of goods from customer to vendor. 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. A closed loop supply chain and reusing products thus becomes more relevant. 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. Pdf strategic alliance in a closedloop supply chain, a. 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. This paper considers a closed loop supply chain with the manufacturer as the stackelberg leader. After each case, we summarize and discuss the distinguishing features of the supply chains. 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. How is closed loop supply chain management abbreviated.
Before we understand the difference, let us understand the two systems. Pdf closedloop supply chains clsc concept is response to a challenge that. In recent years, the management of closedloop supply chains has gained importance because of increased legislation on producer respon bility, requiring companies to take back. Closedloop supply chain ideally, a zerowaste supply chain that completely reuses, recycles, or composts all materials. 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. Managing closedloop supply chains simme douwe flapper. This process creates a closedloop supply chain clsc and has many benefits. 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. Its an ambitious goal that will require many years of collaboration across multiple apple teams, our suppliers and specialty recyclers but our work is already under way. In the following sections we document a number of diverse products that are presently being remanufactured and describe their supply chains. Supply chain integration modeling, optimization, and applications sameer kumar, series advisor university of st. Reverse logistics is the process of planning, implementing and controlling. Gaps of related research is identified and future research opportunities are identified.
Traditional open loop forward supply chain what is. Closedloop supply chain management listed as clscm. Closed loop supply chain management and reverse logistics a. The model also results in a fact that with the implication of the extended supply chain, a. The attention of strategy is shifting from disposing waste to recovery and reproduce by considering the recyclable waste as potential. This is the reverse of the traditional supply chain movement of goods from vendor to customer. In the openloop supply chain, which is the traditional supply chain system, products do not return to the original producer. New developments to improve the sustainability of business practices mark e. 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 landfills andel, 1997.
Closedloop supply chain management how is closedloop supply chain management abbreviated. The manufacturer faces three different reverse channels, i. The prospect of remanufacturing poses interesting questions with respect to the design and management of closed loop supply chains. Use this document as a guide in implementing work activities in your supply chain operations that have proven to increase efficiency, cost. Reverse logistics concerns the integration of used and obsolete products back into the supply chain as valuable resources. 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. Reverse logistics is a broader concept for overall supply chain optimization, which aims to support closedloop supply chains by the improvement of such activities as product design, supply chain design, and product recovery. The trend is to establish closedloop supply chains, where previously discarded products circle back into the. Materials are mined, manufactured as products and often end up in landfills after use. Supply chain best practices guide this guide details 25 high value best practices for supply chain management organized by function, including procurement, order management, manufacturing and more.
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. The major difference between closedloop 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 closedloop supply chain there is value to be recovered from the customer or enduser. To meet the current environmental challenges and sustainable development, closedloop supply chain clsc management has become increasingly important. How a closed loop supply chain can help reduce product. Closed loop definition is an automatic control system in which an operation, process, or mechanism is regulated by feedback. A forward supply chain is all processes involved in the creation of new products from raw materials through to their distribution to consumers. Closedloop supply chain management how is closedloop. Jan 31, 2017 many leading companies are already using closed loop approaches and achieving cost savings from these efforts. Closed loop definition of closed loop by merriamwebster.
Based on environmental, legal, social, and economic factors, reverse logistics and closed loop. Clscm is defined as closed loop supply chain management very rarely. In a lean supply chain, elimination of waste or nonadding elements will r educe the cost. Pdf closed loop supply chain management and reverse. Looking ahead manufacturing industry prospects to 2020, the u. Wielandwallenburg, 2011 supply chain management scm is the management of a network of interconnected businesses involved in the provision of product and service packages required by the end customers in a supply chain. Aug 27, 2014 this paper considers a closed loop supply chain with the manufacturer as the stackelberg leader.
Economic, marketing, and legislative drivers increasingly are leading companies to take back and recover their products after use. 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. 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. In recent years, the management of closed loop supply chains has gained importance because of increased legislation on producer respon bility, requiring companies to take back.
Sep 14, 2006 closed loop supply chain ideally, a zerowaste supply chain that completely reuses, recycles, or composts all materials. Figure 2 shows the definition for each type of the scnd. Closedloop supply chain is different from the traditional supply chain. 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. Clscm stands for closed loop supply chain management. 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. Pdf specifics of closed loop supply chain management in the. Dynamic models of closedloop supply chain and robust h. Based on game theory, we discuss the reference price effect on the performances across.
The remanufacturing reverse logistics management based on. Completing the supply chain loop cognizant 2020 insights executive summary traditionally, businesses have concentrated on improving the forward supply chain for their products e. Comparing to open loop recycling, closed loop recycling protects the quality loss for. A closedloop supply chain is designed and managed in such a way as to combine both forward and reverse supply chains. Therefore, closedloop supply chains have traditional forward supply chain activities and a set of additional activities required for the reverse supply chain. Closed loop supply chain management clscm refers to all forward logistics in the chain like procurement of materials, production and distribution as. Apple has pledged to build its iphone from entirely recycled materials. Closed loop supply chain management and reverse logisticsa. A closedloop supply chain clsc refers to a bidirectional supply chain between a sender and a receiver that aims to achieve both business and environmental benefits.
What is the difference between close loop supply chain and. Cocacola european partners, for example, is collaborating with recyclers, packaging manufacturers and other firms across the supply chain to cut costs and materials used. Traditional supply chains are linear, said the report. The integration of forward and reverse supply chains is termed as closed loop supply chains clsc.
Integrating plm and quality management in recent aberdeen research of over 500 manufacturers it was shown that 100% of bestinclass manufacturers having both a quality management solution and product life cycle management plm have created real time interoperability between these solutions. A previously discarded product can therefore be repaired, resold or even dismantled for parts. However, the term can also be used to refer to corporate takeback programs, where companies that. Closedloop supply chain models with product remanufacturing. 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. The reference price affects the purchase decision of consumers. Closedloop supply chains can substantially help cut back on these wastes. 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. Product acquisition management pram focuses on obtaining the used products. Pdf the concept of closedloop supply chain integration. Clscm closedloop supply chain management acronymfinder. Closed loop recycling can be defined as an essential waste management for environmental protection which is a production system with recycling process.
1315 1336 48 914 400 567 628 823 104 1411 1274 346 836 1277 29 935 100 942 482 548 758 1413 1242 567 391 1178 954 1343 1429