Harold Krikke

Concurrent product and closed-loop supply chain design with an application to refrigerators

Increased concern for the environment has lead to new techniques to design products and supply chains that are both economically and ecologically feasible. A literature study shows that many models exist to support product design and logistics separately. In our research, we develop quantitative modelling to support decision-making concerning both the design structure of a product, i.e. modularity, reparability and recyclability, and the design structure of the logistic network. Environmental impacts are measured by linear-energy and waste functions. Economic costs are modelled as linear functions of volumes with a fixed set-up component for facilities. This model is applied to a closed-loop supply chain design problem for refrigerators using real life R&D data of a Japanese consumer electronics company concerning its European operations. The model is run for different scenarios using different parameter settings such as centralized versus decentralized processing, alternative product designs, varying return quality and quantity, and potential environmental legislation based on producer responsibility.

ON A MEDIUM TERM PRODUCT RECOVERY AND DISPOSAL STRATEGY FOR DURABLE ASSEMBLY PRODUCTS

The introduction of extended producer responsibility makes original equipment manufacturers formally responsible for take-back, recovery and reuse of discarded products. One of their key problems is to determine to what extent return products must be disassembled and which recovery and disposal options should be applied. On a tactical management level, this involves anticipating problems like meeting (legislative) recovery targets, limited secondary end markets and investments in recycling infrastructure. In this paper, a comprehensive model is presented, which determines an optimal product recovery and disposal strategy for one product type. The objective function takes into account technical, commercial and ecological criteria as well as uncertainty on these criteria due to lack of information, in particular regarding the quality level. Optimization is done on overall net profit and occurs using a two-phased DPalgorithm. The applicability of the model is shown in a case study.

Strategic response to EEE returns:: Product eco-design or new recovery processes?

In this paper we study how industry should strategically respond to imposed producer responsibility by regulation such as the WEEE-directive. Product eco-design covers both Design for Disassembly and Recovery (DfX) and Product Data Management (PDM). On the process side, X-ray technologies and Post-shredder Separation Techniques (PST) can also improve the overall efficiency of recovery strategies. We revisit the Roteb case on monitors published in some of our previous work and add characteristics to make it up-to-date. We develop four scenarios with each three different information levels on the disassembly Bill Of Material (dBOM) and on return quality, namely perfect information, partial information, and a scenario with no information. For the three information scenarios, we deploy different decision support models, namely an integer program in case of perfect information, a number of decision rules in case of partial information, and a default strategy in case of no information. Within each scenario, we carry out a sensitivity analysis on those operational parameters affected by the strategic choices mentioned. We conclude with recommendations to OEMs on strategic response related to recovery and elaborate on future research using our modeling approach in the EEE and other types of industry.

REDESIGN OF A RECYCLING SYSTEM FOR LPG-TANKS

Abstract.This paper presents a case study that is performed at Auto Recycling Nederland (ARN), the organization for end-of-life vehicle recycling in the Netherlands. End-of-life vehicle recycling starts with the removal of dangerous materials, such as oil, fuel and LPG-tanks (Liquefied Petrol Gas). We consider the problem of redesigning the recycling system for LPG-tanks. Like in many reverse logistics network design questions, uncertainty in system behavior and difficulty in gathering reliable data are important characteristics of our case. Especially while the total costs consist for almost 50% of transportation costs, reliable transportation costs estimations are crucial. We use a vehicle routing model to solve this data problem and feed the estimations into a mathematical programming model. The system uncertainty is tackled with sensitivity analysis.

Extended Design Principles for Closed Loop Supply Chains: Optimising Economic, Logistic and Environmental Performance

Closed loop supply chains aim at closing goods flows thereby limiting emission and residual waste, but also providing customer service at low cost. In this paper we study design principles for closed loop supply chains, both from a theoretical perspective and a business case. Obvious improvements can be made by applying traditional ‘forward logistics’ principles. Also new, life cycle driven principles need to be applied. This can be supported by advanced management tools such as LCA and LCC.

Network Design in Reverse Logistics: A Quantitative Model

The introduction of (extended) producer responsibility forces Original Equipment Manufacturers to solve entirely new managerial problems. One of the issues concerns the physical design of the reverse logistic network, which is a problem that fits into the class of facility-location problems. Since handling return flows involves a lot of different processing steps, the physical system might consist of two or more echelons. In this paper, a MILP-model is presented that gives decision support in designing the physical network structure of a multi-echelon reverse logistic system. The model is applied to a case from the automotive industry. The general applicability of the model in logistic network design is discussed. Finally, subjects for further research are pointed out.

OR Models for Eco-eco Closed-loop Supply Chain Optimization

Growing concern for the environment has led to a range of new environmental policies for various industries in which the recovery of waste is an essential element. The formulation of waste policies is a complicated matter for a number of reasons. First, the determination of environmental impact of supply chain processes (including recovery) is complex and partly subjective in its interpretation. Second, and related to this, the relative environmental impact of waste recovery, as opposed to other supply chain processes, may vary strongly by type of industry. Third, environmentally friendly processing of waste is often costly, especially when taking an end-of-pipe perspective. Fourth, there may be unexpected side effects of waste policies, such as (illegal) trading.

Last Time Buy and control policies with phase-out returns: a case study in plant control systems

This research involves the combination of spare parts management and reverse logistics. At the end of the product life cycle, products in the field (so called installed base) can usually be serviced by either new parts, obtained from a Last Time Buy, or by repaired failed parts. This paper, however, introduces a third source: the phase-out returns obtained from customers that replace systems. These returned parts may serve other customers that do not replace the systems yet. Phase-out return flows represent higher volumes and higher repair yields than failed parts and are cheaper to get than new ones. This new phenomenon has been ignored in the literature thus far, but due to increased product replacements rates its relevance will grow. We present a generic model, applied in a case study with real-life data from ConRepair, a third-party service provider in plant control systems (mainframes). Volumes of demand for spares, defects returns and phase-out returns are interrelated, because the same installed base is involved. In contrast with the existing literature, this paper explicitly models the operational control of both failed- and phase-out returns, which proves far from trivial given the non-stationary nature of the problem. We have to consider subintervals within the total planning interval to optimize both Last Time Buy and control policies well. Given the novelty of the problem, we limit ourselves to a single customer, single-item approach. Our heuristic solution methods prove efficient and close to optimal when validated. The resulting control policies in the case-study are also counter-intuitive. Contrary to (management) expectations, exogenous variables prove to be more important to the repair firm (which we show by sensitivity analysis) and optimizing the endogenous control policy benefits the customers. Last Time Buy volume does not make the decisive difference; far more important is the disposal versus repair policy. PUSH control policy is outperformed by PULL, which exploits demand information and waits longer to decide between repair and disposal. The paper concludes by mapping a number of extensions for future research, as it represents a larger class of problems.

Collector Managed Inventory, a Proactive Planning Approach to the Collection of Liquids Coming from End-of-Life Vehicles

In this article we introduce Collector Managed Inventory (CMI) as the reverse logistics counter part of Vendor Managed Inventory (VMI).The collection company takes responsibility for the inventories of cores or materials to be recycled.Experience in forward supply chain management has shown the potential of VMI by bringing the coordination of transportation and inventory decisions to the same supply chain entity.Using information technology called telemetry, we are able to monitor inventory levels at distance.We introduce a proactive planning methodology based on two types of collection orders: must- and can-orders.Every collection period all must-orders have to be collected, while canorders are only collected if they can be combined beneficially with the must-orders.The routing problem is solved by a combination of route generation and set partitioning.The system is illustrated in a real-life case study for Auto Recycling Nederland on the collection of liquids coming from end-oflife vehicles, such as coolant and oil.In several scenarios the old reactive approach is compared to the proactive approach resulting in cost savings up to about 19%.

E-business and circular supply chains : Increased business opportunities by IT-based customer oriented return-flow management

This paper deals with the application of information technology (IT) in circular supply chains (CSCs). We consider information on the installed base critical, and present an illustrative example. Next we discuss a framework of different kinds of value contained in a return, and IT-applications useful in supporting its recovery or neutralisation in case of negative externalities. Also we show which kind of CSC is needed for which kind of return. We illustrate our work by three real life case studies