Integrating Closed-Loop Supply Chains and Spare-Parts Management at IBM

Authors:
Moritz Fleischmann;Jo A. E. E. van Nunen;Ben Gräve
Affiliations:
-;-;-
Venue:
Interfaces
Year:
2003

Citing 0
Cited 3

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Information-Knowledge-Systems Management
OR FORUM---The Evolution of Closed-Loop Supply Chain Research

Operations Research
The application of discrete event simulation and system dynamics in the logistics and supply chain context

Decision Support Systems

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Abstract

IBM is among the pioneers recognizing the benefits of closed-loop supply chains that integrate product returns into business operations. We worked on a project exploiting product returns as a source of spare parts. Key decisions concern what recovery opportunities to use, the channel design, and coordinating alternative supply sources. Our analytic inventory-control model and a simulation model showed that procurement-cost savings largely outweigh reverse logistics costs and that information management is essential. These findings provide a basis for significantly expanding the usage of the novel parts supply source, thereby cutting procurement costs.