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Product recovery optimization in closed-loop supply chain to improve sustainability in manufacturing

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  • Kannan Govindan
  • P.C. Jha
  • Kiran Garg

Abstract

When business practices shift from a traditional open supply chain to a closed loop instead, the environmental and societal issues are efficiently integrated in business development. However, even an efficiently integrated shift introduces a number of trade-offs due to the contradictory goals that emerge from that business’s economical, environmental and social dimensions. In this paper, we propose a multi-objective mixed integer mathematical problem for a generic closed-loop supply chain (CLSC) network to rationalise how a system’s product recovery helps to improve manufacturing sustainability. The CLSC network proposed in this study consists of a hybrid manufacturing facility, warehouse, distribution centres, collection centres and a hybrid recovery facility (HRF). The proposed model determines the best location for the HRF and optimal flow of products, recovered parts and material in the network while it simultaneously maximises profit, saves activity costs, helps to decrease the harmful effects of the manufacturing process and makes a positive impact on societal development. To validate the model, a numerical illustration with the help of a case study from an electrical manufacturing industry is offered. The results authenticate the approach of the model towards the fulfilment of various environmental regulations. A sensitivity analysis, completed on demand, and the return rate also assists decision-makers to manage their decisions with a broader insight towards manufacturing sustainability.

Suggested Citation

  • Kannan Govindan & P.C. Jha & Kiran Garg, 2016. "Product recovery optimization in closed-loop supply chain to improve sustainability in manufacturing," International Journal of Production Research, Taylor & Francis Journals, vol. 54(5), pages 1463-1486, March.
    • Handle: RePEc:taf:tprsxx:v:54:y:2016:i:5:p:1463-1486
    DOI: 10.1080/00207543.2015.1083625
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    1. World Commission on Environment and Development,, 1987. "Our Common Future," OUP Catalogue, Oxford University Press, number 9780192820808.
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    Cited by:

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    2. Ismail I. Almaraj & Theodore B. Trafalis, 2022. "A robust optimization approach in a multi-objective closed-loop supply chain model under imperfect quality production," Annals of Operations Research, Springer, vol. 319(2), pages 1479-1505, December.
    3. Hsieh, Chung-Chi & Lathifah, Artya, 2022. "Ordering and waste reuse decisions in a make-to-order system under demand uncertainty," European Journal of Operational Research, Elsevier, vol. 303(3), pages 1290-1303.
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    8. Aijun Liu & Yan Zhang & Senhao Luo & Jie Miao, 2020. "Dual-Channel Global Closed-Loop Supply Chain Network Optimization Based on Random Demand and Recovery Rate," IJERPH, MDPI, vol. 17(23), pages 1-32, November.
    9. Carlos A. Moreno-Camacho & Jairo R. Montoya-Torres & Anicia Jaegler, 2023. "Sustainable supply chain network design: a study of the Colombian dairy sector," Annals of Operations Research, Springer, vol. 324(1), pages 573-599, May.
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    11. Luthra, Sunil & Mangla, Sachin Kumar & Xu, Lei & Diabat, Ali, 2016. "Using AHP to evaluate barriers in adopting sustainable consumption and production initiatives in a supply chain," International Journal of Production Economics, Elsevier, vol. 181(PB), pages 342-349.
    12. Abid Haleem & Shahbaz Khan & Sunil Luthra & Harshit Varshney & Musaib Alam & Mohd Imran Khan, 2021. "Supplier evaluation in the context of circular economy: A forward step for resilient business and environment concern," Business Strategy and the Environment, Wiley Blackwell, vol. 30(4), pages 2119-2146, May.
    13. Lukas Messmann & Lars Wietschel & Andrea Thorenz & Axel Tuma, 2023. "Assessing the social dimension in strategic network optimization for a sustainable development: The case of bioethanol production in the EU," Journal of Industrial Ecology, Yale University, vol. 27(3), pages 760-776, June.
    14. Fakheri, Sajjad & Bahrami-Bidoni, Zeynab & Makui, Ahmad & Pishvaee, Mir Saman & Santibanez Gonzalez, Ernesto DR., 2022. "A sustainable competitive supply chain network design for a green product under uncertainty: A case study of Iranian leather industry," Socio-Economic Planning Sciences, Elsevier, vol. 84(C).
    15. Ahn, Yuchan & Han, Jeehoon, 2018. "Economic optimization of integrated network for utility supply and carbon dioxide mitigation with multi-site and multi-period demand uncertainties," Applied Energy, Elsevier, vol. 220(C), pages 723-734.
    16. Navid Zarbakhshnia & Devika Kannan & Reza Kiani Mavi & Hamed Soleimani, 2020. "A novel sustainable multi-objective optimization model for forward and reverse logistics system under demand uncertainty," Annals of Operations Research, Springer, vol. 295(2), pages 843-880, December.
    17. Meng, Kai & Cao, Ying & Peng, Xianghui & Prybutok, Victor & Gupta, Varun, 2020. "Demand-dependent recovery decision-making of a batch of products for sustainability," International Journal of Production Economics, Elsevier, vol. 224(C).
    18. Muneeb, Syed Mohd & Asim, Zainab & Hajiaghaei-Keshteli, Mostafa & Abbas, Haidar, 2023. "A multi-objective integrated supplier selection-production-distribution model for re-furbished products: Towards a circular economy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 175(C).
    19. Weisheng Deng, 2019. "Does Remanufacturing Always Benefit the Manufacturer and Hurt the Supplier?," Sustainability, MDPI, vol. 11(6), pages 1-13, March.
    20. Jahani, Hamed & Abbasi, Babak & Sheu, Jiuh-Biing & Klibi, Walid, 2024. "Supply chain network design with financial considerations: A comprehensive review," European Journal of Operational Research, Elsevier, vol. 312(3), pages 799-839.
    21. Jyoti Dhingra Darbari & Devika Kannan & Vernika Agarwal & P. C. Jha, 2019. "Fuzzy criteria programming approach for optimising the TBL performance of closed loop supply chain network design problem," Annals of Operations Research, Springer, vol. 273(1), pages 693-738, February.
    22. Luttiely Santos Oliveira & Ricardo Luiz Machado, 2021. "Application of optimization methods in the closed-loop supply chain: a literature review," Journal of Combinatorial Optimization, Springer, vol. 41(2), pages 357-400, February.
    23. Eleonora Bottani & Giorgia Casella, 2018. "Minimization of the Environmental Emissions of Closed-Loop Supply Chains: A Case Study of Returnable Transport Assets Management," Sustainability, MDPI, vol. 10(2), pages 1-20, January.
    24. Alexis Ioannidis & Konstantinos J. Chalvatzis & Leonidas C. Leonidou & Zhiteng Feng, 2021. "Applying the reduce, reuse, and recycle principle in the hospitality sector: Its antecedents and performance implications," Business Strategy and the Environment, Wiley Blackwell, vol. 30(7), pages 3394-3410, November.
    25. Ahmad A. A. Khanfar & Mohammad Iranmanesh & Morteza Ghobakhloo & Madugoda Gunaratnege Senali & Masood Fathi, 2021. "Applications of Blockchain Technology in Sustainable Manufacturing and Supply Chain Management: A Systematic Review," Sustainability, MDPI, vol. 13(14), pages 1-20, July.

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