Minimization of the Environmental Emissions of Closed-Loop Supply Chains A case study of returnable transport assets management

Eleonora Bottani, Giorgia Casella (University of Parma)

CHALLENGE - A closed-loop supply chain (CLSC) is a system where the forward and reverse flows of items occur and should be managed simultaneously​.  The proper management of a CLSC requires the design, control and operation of the system to maximize value creation over the entire life cycle of a product, with dynamic recovery of value from different types and volumes of returned items​. This aim of this research is to evaluate and minimize the environmental impact of an existing CLSC​.

SOLUTION - A simulation model is developed under Microsoft ExceL to reproduce the flow of returnable transport items (RTIs) in the CLSC and to compute the corresponding environmental impact. Multi-objective optimization, including some relevant environmental key performance indicators (KPIs), is then carried out exploiting the software modeFRONTIER to determine the settings that minimize emissions of the CLSC. As a last step, the Multi-Criteria Decision Making (MCDM) tool of modeFRONTIER was exploited to rank the feasible configurations on the basis of their score against the objectives set in the optimization.

BENEFITS - The multi-objective optimization targeted, in particular, the minimization of the CO2 emissions, coupled with the minimization of stock-out occurrence and the maximization of assets usage and rotation. As a result, the setting of the asset management process, in terms of OP and MPQ, which performed best against the objectives set was derived as a function of the relative importance assigned to each KPI.​