Strategic Capacity Planning in Closed-loop Remanufacturing Networks

Abstract

Managing closed-loop remanufacturing networks within a highly dynamic environment is becoming increasingly complex. In particular, remanufacturing network operations face continually and rapidly changing product demand coupled with an ever increasing number of product offerings with reduced lifecycles. A key issue for the long-term profitability of such networks is the development of efficient strategic capacity planning policies. However, the decision making process faces additional complex issues due to special features of reverse channel such as uncertainty in actual demand, sales patterns, product usage time, and the quality and timing of end-of-use product returns. 
We summarize the up-to-date research results regarding demand-driven strategic capacity planning policies for collection and remanufacturing facilities in the reverse channel of closed-loop remanufacturing networks using System Dynamics (SD) methodology. Firstly, we present the SD modelling approach to reveal policies that maximize the total supply chain profit. Secondly, we provide a synthesis of key findings regarding the impact of product lifecycle considerations on the optimal solutions. Thirdly, we discuss suitable capacity planning practices for various remanufacturable product types that differ in both lifecycle and return characteristics. Finally, we propose flexible policies of low volume but more frequent capacity expansions as efficient practices to avoid overinvestment phenomena in the reverse channel and also to cope with the investments’ turnover risk, especially when the management faces high capacity acquisition unit-cost and increased uncertainty in the operational environment.

About the Presenter

Patroklos Georgiadis is Professor for Production Operations Management, Production Planning and Control and System Dynamics (SD) at the Department of Mechanical Engineering of the Aristotle University of Thessaloniki (A.U.Th.). He obtained a Diploma in Mechanical and Electrical Engineering and a Ph.D. in Industrial Management both from A.U.Th. He is the leader of the SD Research Group focusing on the systems thinking and modelling for the environmental and economical sustainability of production systems, dynamic strategic decision making in closed-loop supply chains, product life-cycle management, capacity planning and production planning and control. He has published research articles in a variety of academic journals including Production and Operations Management, European Journal of Operational Research, Computers & Operations Research, Journal of Cleaner Production and he has authored a book on System Dynamics with Applications in Designing, Operating and Controlling the Production Systems in Greek (2006). He has participated in a large number of funded research projects for the industry, the Hellenic General Secretariat for Research and Technology and various public and private organizations.
more information about Prof. Georgiadis

About the Seminar

The KLU research seminar series is a regular meeting of PhD students, Post-Docs and professors who conduct research in the field of logistics and supply chain management. The research seminar is open to the public and we happily welcome guests.