Beyond Waste Reduction: Creating Value with Information Systems in Closed-Loop Supply Chains

40 Pages Posted: 18 Nov 2011  

O. Koppius

Rotterdam School of Management, Erasmus University; Erasmus Research Institute of Management (ERIM)

Oznur Ozdemir

affiliation not provided to SSRN

E. van der Laan

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management; Erasmus Research Institute of Management (ERIM)

Date Written: November 17, 2011

Abstract

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.

Keywords: product recovery, closed-loop supply chains, business value, green IS, interorganizational systems

JEL Classification: M21, Q57, Q56, Q01, Q51, Q21

Suggested Citation

Koppius, O. and Ozdemir, Oznur and van der Laan, E., Beyond Waste Reduction: Creating Value with Information Systems in Closed-Loop Supply Chains (November 17, 2011). ERIM Report Series Reference No. ERS-2011-024-LIS. Available at SSRN: https://ssrn.com/abstract=1961468

Otto Koppius (Contact Author)

Rotterdam School of Management, Erasmus University ( email )

RSM Erasmus University
PO Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 2032 (Phone)
+31 10 408 9010 (Fax)

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Oznur Ozdemir

affiliation not provided to SSRN

Erwin A. Van der Laan

Erasmus University Rotterdam (EUR) - Department of Technology and Operations Management ( email )

RSM Erasmus University
PO Box 1738
3000 DR Rotterdam
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Paper statistics

Downloads
531
Rank
41,282
Abstract Views
1,403