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

19 Pages Posted: 18 Jan 2003

See all articles by Moritz Fleischmann

Moritz Fleischmann

University of Mannheim, Business School

J.A.E.E. van Nunen

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Erasmus Research Institute of Management (ERIM)

Philip Hans Franses

Erasmus University Rotterdam (EUR) - Department of Econometrics

Date Written: 25 2002, 11

Abstract

Ever more companies are recognizing the benefits of closed-loop supplychains that integrate product returns into business operations. IBMhas been among the pioneers seeking to unlock the value dormant inthese resources. We report on a project exploiting product returns asa source of spare parts. Key decisions include the choice of recoveryopportunities to use, the channel design, and the coordination ofalternative supply sources. We developed an analytic inventory controlmodel and a simulation model to address these issues. Our results showthat procurement cost savings largely outweigh reverse logistics costsand that information management is key to an efficient solution. Ourrecommendations provide a basis for significantly expanding the usageof the novel parts supply source, which allows for cutting procurementcosts.

Keywords: supply chain management, product recovery, reverse logistics, service management, inventory management

JEL Classification: M, M11, R4

Suggested Citation

Fleischmann, Moritz and van Nunen, Jo and Franses, Philip Hans, Integrating Closed-Loop Supply Chains and Spare Parts Management at Ibm (25 2002, 11). ERIM Report Series Reference No. ERS-2002-107-LIS. Available at SSRN: https://ssrn.com/abstract=371054

Moritz Fleischmann (Contact Author)

University of Mannheim, Business School ( email )

University of Mannheim
P.O. Box 10 34 62
Mannheim, 68131
Germany

Jo Van Nunen

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

HOME PAGE: http://people.fbk.eur.nl/jnunen/personal/

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Philip Hans Franses

Erasmus University Rotterdam (EUR) - Department of Econometrics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 1278 (Phone)
+31 10 408 9162 (Fax)

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