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

Author

Listed:
  • Moritz Fleischmann

    (Rotterdam School of Management/Faculteit Bedrijfskunde, Erasmus University Rotterdam, PO Box 1738, 3000 DR Rotterdam, The Netherlands)

  • Jo A. E. E. van Nunen

    (Rotterdam School of Management/Faculteit Bedrijfskunde, Erasmus University Rotterdam, PO Box 1738, 3000 DR Rotterdam, The Netherlands)

  • Ben Gräve

    (Global Service Logistics, ITS, IBM Nederland N.V., Johan Huizingalaan 761, 1066 VH Amsterdam, The Netherlands)

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.

Suggested Citation

  • Moritz Fleischmann & Jo A. E. E. van Nunen & Ben Gräve, 2003. "Integrating Closed-Loop Supply Chains and Spare-Parts Management at IBM," Interfaces, INFORMS, vol. 33(6), pages 44-56, December.
    • Handle: RePEc:inm:orinte:v:33:y:2003:i:6:p:44-56
    DOI: 10.1287/inte.33.6.44.25189
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    References listed on IDEAS

    as
    1. Craig C. Sherbrooke, 1968. "Metric: A Multi-Echelon Technique for Recoverable Item Control," Operations Research, INFORMS, vol. 16(1), pages 122-141, February.
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    4. Kamran Moinzadeh & Steven Nahmias, 1988. "A Continuous Review Model for an Inventory System with Two Supply Modes," Management Science, INFORMS, vol. 34(6), pages 761-773, June.
    5. Teunter, Ruud H. & Vlachos, Dimitrios, 2002. "On the necessity of a disposal option for returned items that can be remanufactured," International Journal of Production Economics, Elsevier, vol. 75(3), pages 257-266, February.
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    More about this item

    Keywords

    Industries: computer; electronic. Inventory; production: policies;
    All these keywords.

    JEL classification:

    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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