The Challenge of Closed-Loop Supply Chains

TLDR

Closed‑loop supply chains differ markedly from forward chains, yet their complexities—especially product returns—remain poorly understood, limiting progress and prompting growing interest driven by profitability prospects and regulatory pressure. The study calls for joint industry‑academia efforts to develop life‑cycle business models for closed‑loop supply chains.

Abstract

Closed-loop supply chains differ significantly from forward supply chains in many aspects. These differences are not well understood in many contexts, and the situation is complicated by many types of product returns. Progress is slow since closed-loop supply chains are rarely considered as value-creating systems, and much of the focus is on the operational aspects, rather than the larger strategic issues. Interest is growing in the US because of the potential profitability and in the European Union because of legislation. New business models need to be developed by joint cooperation between industry and academia that take a life-cycle approach to products.