ReCiPSS D4.1 - Circular Supply/Value Chains Development Report

The purpose of this deliverable is to analyse best practices in industry and state-of-the-art supply chain design methodologies (task 4.1) and develop circular supply network design and optimization of multiple reverse flows and re-distribution for both demonstrators (task 4.2).  

Firstly, an overview of the state-of-the-art in supply chain design methodologies that can contribute to the definition, development, and implementation of circular supply chains is presented. Conventional approach of closed-loop systems typically addresses reuse, remanufacturing, or recycling only when products reach their end of life (i.e. reactive approach). In the ReCiPSS context, circular supply chains refer to closing the loop intentionally by design in a systemic manner where the forward and reverse flows are integrated and optimized for multiple product lifecycles (i.e. proactive approach). 

Secondly, industrial best practices in closed-loop supply chains are identified to enhance the understanding and knowledge about practical aspects of circular supply/value chains and to benchmark the current state of the supply chains of the ReCiPSS demonstrators against the best practices. Prominent examples include companies like Ricoh, Hewlett-Packard, IBM, Caterpillar, Xerox, Renault and Komatsu. These companies are OEMs that have full control of their product throughout the entire lifecycle including design, manufacturing, forward supply chain, customer use phase, reverse supply chain, recovery activities and re-distribution. 

Thirdly, a baseline analysis is conducted through field visits and interviews with the company representatives to understand critical success factors for circular supply chain design and development. For white goods demonstrator the purpose is to understand the preconditions in terms of supply chain when transitioning from a product sales business model to a product as a service business model whereas for the automotive spare parts demonstrator, the focus is to understand the current logistics set-up, how is it designed and operated for the current business. However, the potential critical success factors for both the demonstrators converge around the aspects of geographical locations of facilities, lead times for delivery or collection of products as well as the logistical network design.  

Building upon the learnings of the analysis of the state-of-the-art, industrial best practices and baseline of the two demonstrators, simulation models of the demonstrators supply chains are developed and what-if analysis is performed to explore the aspect of centralized and decentralized supply chains scenarios while keeping the aspect of economic and environmental performance in focus. Based on the simulation modelling results, trade-off analysis has been created for both demonstrators to aid in decision making for implementation of circular supply chains in line with the business model and product design.