Beyond Waste Reduction: Creating Value with Information Systems in Closed-Loop Supply Chains
Rotterdam School of Management, Erasmus University; Erasmus Research Institute of Management (ERIM)
affiliation not provided to SSRN
E. Van der Laan
Erasmus University Rotterdam (EUR) - Department of Decision and Information Sciences; Erasmus Research Institute of Management (ERIM)
November 17, 2011
ERIM Report Series Reference No. ERS-2011-024-LIS
We study the role of information systems in enabling closed-loop supply chains. Past research in green IS and closed-loop supply chains has shown that it can result in substantial cost savings and waste reduction. We complement this research by showing that the effects are more than that: using information systems can also create business value for a firm in closed-loop supply chains. We make a novel distinction between four types of value: sourcing value, environmental value, customer value and informational value. Particularly the last two types have not been recognized in past research. We then analyze 8 cases (2 for each of the 4 value types) to highlight the role that information systems play in enabling this value creation and find three key results. First, we find that IS is an essential enabler for all four value types. Second, while sourcing value and to some extent environmental value, can be created with IS that are internal to the firm, the novel types of value (customer value and informational value) can only be created with information systems that are extraorganizational, i.e. aimed at customers and supply chain partners. Third, the value created by extraorganizational systems can only be created if the appropriate intraorganizational systems are in place. Overall, our results show that substantial value can be gained from implementing green IS in closed-loop supply chains, but that collaboration between all stakeholders in the supply chain is necessary in order to reap the full value.
Number of Pages in PDF File: 40
Keywords: product recovery, closed-loop supply chains, business value, green IS, interorganizational systems
JEL Classification: M21, Q57, Q56, Q01, Q51, Q21
Date posted: November 18, 2011
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