Integrating closed-loop supply chains and spare-parts management at IBM

Integrating closed-loop supply chains and spare-parts management at IBM

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Article ID: iaor20042958
Country: United States
Volume: 33
Issue: 6
Start Page Number: 44
End Page Number: 56
Publication Date: Nov 2003
Journal: Interfaces
Authors: , ,
Keywords: computers, production
Abstract:

IBM is among the pioneers recognizing the benefits of closed-loop supply chains that integrate product returns into business operations. We worked on a project exploiting product returns as a source of spare parts. Key decisions concern what recovery opportunities to use, the channel design, and coordinating alternative supply sources. Our analytic inventory-control model and a simulation model showed that procurement-cost savings largely outweigh reverse logistics costs and that information management is essential. These findings provide a basis for significantly expanding the usage of the novel parts supply source, thereby cutting procurement costs.

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