chapter  4
26 Pages

Reverse and Closed-Loop Supply Chain Design

In traditional manufacturing, manufacturers establish supply chains to obtain required manufacturing resources (raw material, components, etc.) as well as to distribute €nished products to their customers. In remanufacturing, the need for the collection of used products from customers requires the construction of reverse supply chains in addition to forward supply chains. A reverse supply chain involves all the activities associated with the collection and either recovery (remanufacturing or recycling) or disposal of used products. In a reverse supply chain designed for remanufacturing, there are at least three parties:

• Collection centers where customers return used products • Remanufacturing facilities • Demand centers where customers buy remanufactured products

A manufacturer dealing with remanufacturing activities has to administer its reverse supply chain together with its forward supply chain. The combination of forward and reverse supply chains is called a closed-loop supply chain.