Chapter 1:

INTRODUCTION TO CLOSED LOOP SUPPLY

CHAINS AND REVERSE LOGISTICS
Ph.D Nguyen Duc Duy
RL AND CLSC SERVICE
Reasons REVERSE LOGISTICS:
▪ Products and goods at the end of the supply chain are no longer wanted or
needed or have little value.
▪ A requirement for disposal, which deals with specific questions involving solid
waste, liquid waste, and hazardous materials.
▪ Products and materials have value that could be recovered through repair,
disposition, and recycling, such that it may not be efficient to simply throw
them away.

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RL AND CLSC SERVICE
Products and materials have value that could be recovered:
• Products in the field that have failed and need to be repaired or properly
disposed
• Parts and subassemblies of products that can be reused, either because
they are perfectly good (no trouble found), or that can be repaired or
reworked
• Products that are perfectly good but have, nevertheless, been returned by
the purchaser, as well as products sitting on retailer’s shelves that have not
been sold

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RL AND CLSC SERVICE
Products and materials have value that could be recovered: (Conts)
• Products and materials that have been recalled or are obsolete, but still
have a useful life
• Products, materials, and goods that have been thrown away, but can be
recycled and reused
• Products at end of lease, but not at the end of life

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 Singapore’s overall waste management
strategy:
▪ Step 1: The waste we dispose of is collected and
sent to Waste-to-Energy plants for incineration.
▪ Step 2: The waste is incinerated and turned into
incineration ash.
▪ Step 3: The ash is transported to the Semakau
landfill in barges, which are covered to shield the
ash from wind and seawater.
▪ Step 4: The ash is then transported via truck to
designated sites for final disposal.

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 OVERVIEW OF RL & CLSC MODELS
▪ Full CLSC includes:
• Forward logistics and direct supply chain management
• Reverse logistics
• Depot repair, processing, diagnostics, and disposal

Diagnostics: Chẩn đoán. Disposal: loại bỏ

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RL and CLSC Models
▪ Independent reverse logistics processes.

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RL and CLSC Models
▪ CLSC, involving integrated direct and RL and repair service cycle for high tech
products

Original equipment
manufacturer (OEM)

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RL and CLSC Models
▪ CLSC, involving independent direct and RL and repair service cycle for standard
low tech products

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RL and CLSC Models
▪ Consumer-oriented CLSC

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PRODUCT VS. PARTS RETURNS
▪ The difference in flow can be observed more clearly in terms of:
• Parts and subassemblies
• Consumables and materials
• Whole unit equipment and products

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STRATEGIC ISSUES IN CLSC
▪ Effects:
• Reducing cost of returns
• Increasing the value of the salvage merchandise
• Capturing vital information and reliability, maintainability, and dependability
of products supported
• Reducing transportation and warehousing expenses and time
• including the partial or full elimination of small package shipments
• Automate and fully control the total returns process

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STRATEGIC ISSUES IN CLSC
▪ Maximization of inventory value through:
• Rapid returns to the manufacturer for reuse
• Ability to liquate products, parts, and subassemblies with value in
secondary markets
• Controlled recycling or disposition within environmental and other legal
requirements
• Ability to efficiently process returns back into the original direct supply
chain

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STRATEGIC ISSUES IN CLSC
▪ Additional efficiencies and results to the firm:
• Simplifying processes of retail and wholesale return, reducing labor
cost
• Reducing undesirable shrinkage and damage from returns
• Increasing recovery of value from secondary suppliers and dealers
• Improving the database and visibility of products throughout their life
cycle
• Reducing disposition cycle times, thereby, increasing cash flow

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STRATEGIC ISSUES IN CLSC
▪ Other benefits:
• Pushing the resolution of the returns “upstream” through centralization
and overall control of the full returns process.
• Centralizing the management of the returns process decisions, with respect
to repair, refurbishment, disposition, and secondary market, sales can
be made more efficiently.
• Reduces transportation and time costs through multiple touch points and
eliminates long cycle times in resupply, thus reducing the levels of service
inventory investment requirements.
• Return cycle times under a typical RL process, as compared to a high tech
closed loop supply system, demonstrate the real operational value in
terms of reduced time and cost of moving to a full CLSC system.

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End of chapter 1- Part 2
▪ Read chapter 1: Introduction to Closed Loop Supply Chains and Reverse
Logistics
▪ Book: Introduction to Management of Reverse Logistics and Closed Loop Supply
Chain Processes

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