Applying SNA metrics to evaluate the closed loop supply chain

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16th Dec 2019 Dissertation Reference this

Tags: Supply Chain

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TABLE OF CONTENTS

Abstract

Dedication

Acknowledgments

List of Tables

List of Figures

Chapter 1: Introduction

chapter 2: literature review

Closed loop supply chain

Sustainable supply chain management (SSCM)

Green supply chain management (GSCM)

Comparing traditional SCM and GSM:

Closed loop supply chain (CLSC)

A proposed taxonomy tree of the green supply chain problems

Functional aspects of Reverse logistic and CLSC network design

Modeling in CLSC

Concluding remarks

Social network analysis (SNA)

Introduction to social networks and SNA metrics

Proposed taxonomy tree for SNA metrics

Applying of SNA metrics in the supply chain

Conclusion remarks

chapter 3: methodology

Introducing new metrics in CLSC

Case study for CLSC

chapter 4: Preliminary result

chapter 5: Conclusion and future work

List of Tables

Page

Table ‎2‑1  Comparing Traditional SCM and Green SCM adopted from (Sulistio & Rini, 2015)

Table ‎2‑2  Network models, adopted from (Pishvaee, et al., 2009)

Table ‎2‑3  Comparing reviewed model 1

Table ‎2‑4  Comparing reviewed model 2

List of Figures

Figure ‎2‑1  Number of publications (2007-2013) adopted from (Govindan, et al., 2015)

Figure ‎2‑3: A supply chain with forward and reverse logistics network, adopted from ( Melo et al. ,2009)

Figure ‎2‑4   CLSC network design, adopted from (Özceylan & Paksoy, 2013)

1.      Chapter 1: Introduction

A supply chain is a network consisting diverse components namely supplier, production or manufacturer centers, retailers, and transportation channels which are all structured to acquire raw materials in the network, produce new products, and distribute the finished products to the customers(Borland, 2009). To extend the scope of the supply chain network, the concept of reverse flows of the returned products has been added to the traditional supply chain design to support managing the lifecycle of the products. This new structure is named the closed-loop supply chain (CLSC) network (Özceylan & Paksoy, 2013).

On the other hand, a social network analysis (SNA) has been developed to analyze the patterns of ties in social networks(Kim, Choi, Yan, & Dooley, 2011) It is used as the theoretical framework for better understanding of social networks. Also, it presents useful information regarding entities as well as their interactions(Mahony et al. 2014).

Up to now, far too little attention has been paid to apply SNA metrics in the supply chain. Although some research has been carried out on the potential network mechanism of SNA in the supply chain, there is still very little scientific research to integrate the insight from SNA metrics and adoption of which in the supply chain. Also, the use of SNA metrics in CLSC has not been investigated.

The overall structure of the study takes the form of five chapters as follows. Chapter 1 presents the brief introduction. Chapter 2 reviews the literature on CLSC and SNA metrics. Chapter 3 describes our research methodology. In chapter 5, we provide preliminary results and discuss the conclusion as well as future works.

2.      chapter 2: literature review

The structural dimensions of this chapter of the study are classified into two main classes namely closed loop supply chain (CLSC), social network analysis (SNA). Furthermore, taxonomy on ….

Closed loop supply chain

Sustainable supply chain management (SSCM)

There is a significant rise toward the new concepts of sustainable supply chain management and green supply chain management (Seuring, 2013). As the result of this extensive literature review, it was concluded that the number of papers which were published in the sustainable and green supply chain has grown from 191 (in the period of 1190-2007) to 308 papers toward the end of 2010 (Seuring, 2013). The approach to have an SSCM is contemplating the criteria of economic, social and environmental performance in the supply chain, which can benefit the decision-making process in the companies (Caldelli & Parmigiani, 2004). According to Seuring( 2013), SSCM is define as “Sustainable SCM is the management of material, information, and capital flow as well as cooperation among companies along the supply chain while integrating goals from all three dimensions of sustainable development, i.e., economic, environmental and social, which are derived from customer and stakeholder requirements” (Seuring, 2013).

Green supply chain management (GSCM)

Wu & Pagell(( 2011) defined GSCM as an integrated approach in which environmental issues are focused in the Supply chain management procedure containing product design, material sourcing, manufacturing processes, delivery of the product, and end-of-life management. GSCM not only focuses on environmental issues but also economic aspects. As it is mentioned, integrating environmental concerns into SCM processes and activities are defined as a GSCM. Elbounjimi, et al. (2014) pointed out the difference between the design of the traditional supply chain and Green supply chain.  To design the traditional supply chain, it is needed to define the number, location, capacity of facilities, allocation of products, customers and suppliers to facilities, and decision regarding transportation modes and manufacturing technologies. However, the purpose of designing a green supply chain is to integrate closed-loop reverse logistics consisting of regulatory factors concerns, capacity utilization, carbon emissions, energy and materials resources (Elbounjimi et al., 2014).

Table ‎2‑1 shows the comparison between Traditional SCM and GSCM based on Sulistio & Rini (2015).

Table 2‑1

Comparing Traditional SCM and Green SCM adopted from (Sulistio & Rini, 2015)

Characteristic Traditional SCM Green SCM
 
Objective and values Economic Economic and ecological
Ecological optimization High ecological impact Integrated approach

Low ecological impacts

Supplier selection criteria Price switching suppliers quickly

Short-term relationship

Ecological aspect (and price)

Long-term relationship

Cost pressure and price High-cost pressure

Low prices

Cost pressure

High prices

Speed and flexibility High Low
 

In addition to the above differences, traditional and green supply chain are compared based on the two aspects of objectives and structure:

  • Objective: In the traditional supply chain economic objectives are mostly covered. These objectives are  cost/benefits, responsiveness as well as flexibility while Green supply chain
  • Structure: The traditional supply chain only has a forward flow to deliver products to the customer. However, the green supply chain is cyclic which makes a value-loop to integrate the product lifecycle stages by owing forward and reverse flow of material and information in both directions (Elbounjimi, et al., 2014).

Closed loop supply chain (CLSC)

Thus far, Closed-loop supply chain (CLSC) is the most interesting topic of researches in new aspects of supply chains. Figure ‎2‑1 confirms this by comparing a number of publications in this area with (i) Reverse logistic, (ii) sustainable and (iii) green logistics.

Figure ‎2‑1

Number of publications (2007-2013) adopted from (Govindan, et al., 2015)

Overall, there seems to be some evidence to indicate that CLSC is the special topic which has been carried out in the recent years (Sasikumar & Kannan, 2008b). Considering this, CLSC, which compromises two parts namely forward and reverses logistic, is the comprehensive structure to be investigated in the optimal network design problems (Akçalı, et al., 2009). Indeed, it consists of activities in reverse logistic with the target of improving waste management and resource allocation (Ghadge, et al., 2016).

A proposed taxonomy tree of the green supply chain problems

We proposed the taxonomy tree for green supply chain problems according to reviewed literature and it is shown in Figure ‎2‑2. In this section will discuss the taxonomy tree in three different layers:

Layer 1: Green supply chain problems are divided into three different terms namely green procurement, green manufacturing, and green logistic

Layer 2: In the green logistic area, we focused on the network design problems which are considered as the important decision-making problems owing to their noted role in the strategic planning process of each company (Pati, et al., 2013; Aravendan & Panneerselvam, 2014;). Within this layer, the network design problems have been divided into (i) forward logistics network, (ii) reverse logistics network, and (iii) CLSC network.

Layer 3: The different stages and activities of forward logistic, reverse logistic, and CLSC are presented.

Figure 2‑2

Proposed Taxonomy tree for green supply chain problems

Green procurement

According to Abdallah, et al (2010), green procurement is a vital element in GSCM. Focusing on green factors affecting the relation of suppliers and manufacturers is an essential step toward achieving a greener supply chain (Abdallah et al., 2010). In this regard, modeling in the green procurement of the supply chain can be divided into two different categories, (i) Carbon –sensitive models in the green procurement process, and (ii) Green supplier development.

  1. Carbon-sensitive models: These models are developed in the procurement process to reduce the cost of carbon emission in the procurement of the supply chain. Also, it is hypothesized that there are two main sources for carbon emissions including raw material of the supplier and delivery of the raw materials (Abdallah et al., 2010; Büyüközkan & Çifçi, 2012; Xu, Wang, & Li, 2017).
  2. Green supplier development: In this area, there are many studies that have been worked to model the selection of supplier in order to integrate environmental aspects into supplier selection processes (Bai & Sarkis, 2010; Igarashi, de Boer, & Fet, 2013 Hu, Rao, Zheng, & Huang, 2015).

Green manufacturing

According to Atlas, & Florida, (1998) the goal of green manufacturing is “To prevent pollution and save energy through the discovery and development of new knowledge that reduces and/or eliminates the use or generation of hazardous substances in the design, manufacture, and application of chemical products or processes.” In another word, it is basically a production process which applies materials with low environmental effects in order to generate low waste and population in the supply chain. Areas of applications of Green manufacturing are the production planning process, lean manufacturing, recycling materials as well as green product design (Atlas & Florida, 1998).

The studies on green manufacturing can be divided into two classes: (i) studies on the overall concept of green manufacturing (Burke & Gaughran, 2007; Deif, 2011; Wang & Lin, 2007), and (ii) studies dealing with analytical tools and models provided for green manufacturing at different levels ( Krishnan et al., 2004; Krishnan,et al., 2004; Hsu, et al., 2013; Jayal, et al., 2010).

Green logistic

Green logistic considers all aspects of traditional logistics containing transportation, warehousing, and inventories while addressing the environmental aspects in the supply chain. In most of the literature on green logistic, there are no significant differences between green logistics and GSCM. Whenever the focus of research is put on the transportation aspect, a wider supply chain perspective is taken (Dekker, et al., 2012).

Network design of green logistic

There are some physical drivers behind a supply chain including facility, transportation, and inventory. These drivers have different choices which can affect the environmental aspect of the supply chain in three decision phases including design, planning, and control (Dekker et al., 2012). In network design decision making phase, finding the potential locations for new facilities and their required capacities are considered as a first step (Melo, et al., 2009). Therefore, making a decision on the facility location is recognized as an important part of supply chain network design. The literature dedicated to green supply chain network can be divided into three different categories namely the forward network design (traditional supply chain design), the reverse network design, and the closed-loop supply chain network design. Pishvaee, et al. (2009) presented logistic network models based on these three categories as it is shown in  REF _Ref529200555 h Table ‎2‑2Table ‎2‑2.

  • Forward logistic network design

In the forward logistic network design problems, the configuration of a directed network from suppliers to customers, including production and distribution centers are mainly focused (Pishvaee, Jolai, & Razmi, 2009). Having efficient forward logistic for new products is mandatory for companies; however, they must consider quite different logistic if there is returned products in the network (Srivastava, 2007). In Figure 3, different types of facilities in forward and reverse logistics as well as the flow of material in each is shown. In the forward logistic network design, the studies are divided into two main stages: (i) production, and (ii) distribution.

Figure 23: A supply chain with forward and reverse logistics network, adopted from ( Melo et al. ,2009)

  • Revere logistic network design

Although forward network design is a well-known area in the supply chain, the target of which is distributing products from manufacturers to customers, many studies have been carried out on this area. With this in mind, the definition has to be extended by introducing the reverse network design. In the reverse network design, distributing of the returned product with the purpose of reprocessing containing recycling, reusing, remanufacturing has to be covered (Jayaraman, et al., 2003).

In different literature, reverse logistics is used with different terms such as return logistics, retro logistics, and sometimes reverse distribution. Reverse logistics with the main objective of returning products contain different types of activities such as recycle, reuse, and remanufacture/refurbish (Ghadge, et al., 2016). Generally, reverse logistics is considered to be environmentally friendly owing to offering some products which are retrieved from waste products and recycled materials instead of having to produce new products (Dekker et al., 2012). To highlight the importance of reverse logistic, US firms can be mentioned which spend $100 billion annually in the reverse logistics activities for product return process (Ghadge, et al., 2016). Furthermore, the highest percentage of return rates could be 50% in the retailer section (Ghadge, et al., 2016). The product return rate, which is contemplated as a characteristic of the reverse logistics network, depends on the trade-off between the probability of the company and customer satisfaction in the reverse logistics. Different types of returning products in reverse logistics are discussed more in (Amin & Zhang, 2012; Guide & Van Wassenhove, 2009).

  • End-of-use returns take place when a functional product is replaced by a technological upgrade. The majority of end-of-use products are remanufactured (Amin & Zhang, 2012). Also, it may be possible to get end-of-use products with sufficient quality to perform cost-effective remanufacturing. In this case, remanufacturing gets value from used products by replacing components or reprocessing used parts to convert the old product into the new ones (Guide & Van Wassenhove, 2009).
  • End-of-life returns which are often worn-out happen mostly when the product turns into the technically outdated product or it has no longer any value for the current user. Parts recovering and recycling are more appropriate in these returns (Amin & Zhang, 2012; Guide & Van Wassenhove, 2009).
  • Commercial returns are products which are returned by users within a certain period of time (for example 30 days after buying). These returned products often are repaired (Amin & Zhang, 2012). Commercial returns have been applied rarely and are best reintroduced to the market rapidly. These returns involve light repair operations such as cleaning and cosmetic (Guide & Van Wassenhove, 2009).

CLSC network design

It has been shown from this review that there is a lack of integrating the overall life cycle of products into a comprehensive procedure. Thus, incorporating reverse and closed-loop supply chain to achieve the optimum planning and reduction of costs is required in any supply chain planning. To extend the scope of the supply chain network, the concept of reverse flows of the returned products has been added to the traditional supply chain design to support managing the lifecycle of the products. This new structure is named the closed-loop supply chain (CLSC) network shown schematically in Figure ‎2‑4.

CLSC consist of two parts: (i) forward, and (ii) reverses logistics.  In the forward logistic the products deliver from suppliers or manufacture to the customers, while in the reverse logistic, the returned products move back from customers to the collection centers, recovery, disposal or even the reuse centers (Özceylan & Paksoy, 2013). Reverse logistics components are mainly factories, retailers, customers, collection-centers, disassembly-centers, refurbishing-centers, and/or disposal centers.

Figure ‎2‑4

CLSC network design, adopted from (Özceylan & Paksoy, 2013)

Although the CLSC network compromises forward and the reverse logistic, the main practice of green supply chain is provided in reverse logistics (Islam et al., 2017). Reverse logistics is the process to collect unused or defective products, sort and inspect them, afterward move collected products to recycling centers to reprocess waste, to refurbishing center to reuse, to recovery centers or remanufactures to reconditioning, or to disposal centers. Since, recollecting defective or unused products is carried out in the reverse logistic network, it leads to the environmentally friendly world (Islam, Karia, Fauzi, & Soliman, 2017).

Functional aspects of Reverse logistic and CLSC network design

For the network design of reverse logistics and CLSC, three main processes/stages can be considered including collection, inspection, and reprocessing. These processes are:

  • Collection stage

A collection is the first process in the product recovery of reveres logistic for returned products (Pati et al., 2013). Fleischmann, et.al (2000) defined the collection process as “All activities rendering used products available and physically moving them to some point where further treatment is taken care of” (Fleischmann, et .al, 2000).

  • Inspection/Separation stage

At Inspection/separation process, products are inspected first, and then decisions are made on the type of recycling including re-use, resale, or re-distribute of the returned products (Fleischmann et al., 2000; Pati et al., 2013).

  • Re-processing stage

The purpose of reprocessing is to transform the returned product into the usable product again (Fleischmann, et .al, 2000). The reprocessing stage has the following steps:

  1. Recover

In the network design, direct recovery includes re-use, re-sale, and re-distribution of recovered products. In the reusing process, the items possessing their useful life repeatedly use in their original forms after cleaning or minor maintenance (Holly Pui‐Yan Ho & Tsan‐Ming Choi, 2012). Bottles, pallets, and containers can be considered reusable products (Sasikumar & Kannan, 2008a). Re-distribution is a process that redirects re-usable products to potential customer zones (Fleischmann, et .al, 2000). Also, it can be defined as the process of sending the recovered product to new customers (Pati et al., 2013).

  1. Recycle

The recycling process is the collection of material from customers and saves their usable items which are potential to be used as raw materials for producing new products at manufactures. Chemical and physical features of materials might totally change (Holly Pui‐Yan Ho & Tsan‐Ming Choi, 2012). The recycling process includes disassembly, sorting, and reprocessing. Paper recycling, plastic recycling, and electronic product recycling are examples of this type of process (Sasikumar & Kannan, 2008a). If the products are rejected in the separation process or they don’t have the potential to satisfy the market, they would be directed to the disposal-center (Fleischmann, et .al, 2000).

  1. Remanufacture / Refurbish

Remanufacturing is the process to bring the returned products to an acceptable level of quality in the supply chain. The process contains disassembly, assembly, sorting, and refurbishing operations (Sasikumar & Kannan, 2008a).

Modeling in CLSC

We have classified the designing of CLSC networks into two different categories as follows:

  1. Separated forward and reverse logistics
  2. Integrated forward-reverse logistic

(Fleischmann, Krikke, Dekker, & Flapper, 2000) raised the question whether to integrate the reverse and forward logistic within the same distribution or separate both channels. Despite the fact that there are lots of researches used forward and reverse logistic separately in their network design, it has been shown that the integrated forward-reverse logistic is the better choice in comparison with separating design. However, it has been rarely studied in the literature (Lee & Dong, 2008).

In order to design the integrated network, having hybrid processing facilities (hybrid collection-distribution center structure) are more advantageous rather than separated distribution and collection centers. The reason is that utilizing hybrid facilities in the supply chain network can reduce cost and pollution as a result of sharing infrastructure and the equipment of material handling (Pishvaee, Jolai, & Razmi, 2009).However, in recent years there are few types of research have been published with the aim of developing model within the integrated network.

The summary of existing models in literature for the integrated forward-reverse logistic supply chain are summarized in Table 4 and 5. Comparing models in in the various terms including configurations of the supply chain, decision variables, and main common features of models are presented in Table 4; and sizes of models, types of mathematic programming, solution methods, and runtimes are compared in Table ‎2‑3 and Table ‎2‑4.

Table 2‑3

Comparing reviewed model 1

V: decision variable; E: Fixed location of centers                                        No.: Number is not reported in the model

S: Stochastic; D: Deterministic

P: Predefined rate; F: Fuzzy rate                                                               #: Number of potential or existing facilities in the model;

Table 2‑4

Comparing reviewed model 2

Concluding remarks

  • In most of the integrated forward and reverse logistic, hybrid facilities are used as collection and distribution centers (CDCS) which can deal with bi-directional forward and reverse flow simultaneously.
  • Locations of the hybrid facilities are considered as the main decisions variable in the location-allocation problems in the integrated forward-reveres logistics.
  • Transportation amount which means the amount of flows between facilities is the other variable to be reported in integrated forward and reverse logistic.
  • All the integrated forward-reverse logistics are assumed green supply chain network even if they have not considered carbon emission. However, the only study which focused on carbon emission as an environmental factor is the one proposed by Kang et al. (2017).
  • Deterministic modeling rather than stochastic modeling approach is mostly used in integrated forward-reverse logistic.
  • Return rates as an important factor in the integrated forward-reverse logistic are considered in four different categories including percent of demand, random, fuzzy and intervals. Applying predefined amount for return rate as a percent of demand is more common in the literature.
  • The number of potential locations for decision variables in the reviewed models on location-allocation problem is set at most 12 nodes.
  • Cost is the focus of all the objective functions; however, time and benefit are also considered in two of the reviewed models.
  • Mixed integer linear programming (MILP) is mostly used in math modeling of integrated reverse-forward logistic.
  • Different solution methods are used such as heuristics, branch and bound techniques in CPLEX, GAMS, Lingo, and Mosel to solve the problems.

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