Sustainability in electrical and electronic equipment closed-loop supply chains: A System Dynamics approach

https://doi.org/10.1016/j.jclepro.2008.04.019Get rights and content

Abstract

In this paper we examine the impact of ecological motivation and technological innovations on the long-term behavior of a closed-loop supply chain with recycling activities. Ecological motivation manifests through legislation and green image factor, whereas technological innovations manifest through design for environment. We adopt System Dynamics methodology applied to many environmental systems seeking long-term gains. The developed model is implemented to a real-world supply chain of electrical equipment in Greece. Numerical analysis illustrates the factors concerned, like the delay of the legislation enforcement, to achieve a sustainable future through non-renewable resources and landfill preservation.

Introduction

Nowadays mass consumption and indiscriminate disposal habits have revealed our planet's limitations [1], [2]. In this context the members of World Business Council for Sustainable Development, located in Geneva [3], believe that earth's ability to provide materials and absorb waste is limited [4]. Therefore, unsustainability is recognized as reality of our time [5], [6], [7], [8].

Industrial economies have generated tremendous amounts of waste; available landfills are filling up and new one cannot be located [6]. Environmentally conscious practices are continuously growing up, especially in countries with limited geographical area and natural resources [9].

Moreover, sustainable supply chain management is an area of growing attention in industry as its economic impact has been becoming increasingly evident. Simultaneously, more closed-loop supply chains develop recycling activities to conserve natural resources and landfill availability.

This paper deals with sustainability through the management of natural resources usage and landfill availability. Specifically, we develop a dynamic model based on System Dynamics (SD) methodology to evaluate the impact of ecological motivation and technological innovations on the long-term behavior of a system encountered on a variety of real-world cases, namely that of a single producer, single product closed-loop supply chain with recycling activities. Ecological motivation manifests through environmental legislation and green consumerism, whereas technological innovations manifest through Design for Environment (DfE). Fiksel defines DfE as a systematic consideration of design performance concerning environmental, health and safety objectives over the full product and process life cycle [10]. Using a closed-loop supply chain in Greece as a real-world case we study the impact of various regulatory measures through take-back obligations (TB) and lower limits of recycling (LL), green consumerism through green image factor (GIF) and technological performances through design for environment on non-renewable resources and landfill preservation.

The next section presents a literature review. Section 3 presents the structural elements of “ecological motivation” and DfE, while Section 4 presents the comprehensive SD model. In Section 5 the model is tested empirically by implementing it to a real closed-loop supply chain application of electronic and electrical equipment in Greece. Numerical analyses reveal the ability of the closed-loop supply chain to fulfill the regulatory targets (Section 6). In Section 7 sensitivity analyses investigate the dependency of non-renewable resources conservation and landfill preservation on GIF, environmental legislation and the time delay in the products' design process according to the DfE practices. Finally, in Section 8 we present a summary and our conclusions.

Section snippets

Literature review

System Dynamics is a powerful methodology for obtaining insights into problems of dynamic complexity and policy resistance. Forrester introduced SD in the 1960s as a modeling and simulation methodology in dynamic management problems [11]. Sterman mentioned that “if the system to be optimized is static and free of feedback, optimization may well be the best technique to use” [12]. The latter conditions are rarely satisfied for systems in Environmental Management [13]. The system under study in

The system under study

Fig. 1 shows the system under study that incorporates the following activities: procurement of natural resources (non-renewable materials), production, distribution, product use, and collection of used products, dismantling, sorting, recycling and disposal.

The forward supply chain comprises two echelons: producer and distributor. The producer's demand for raw materials is satisfied with a mix of non-renewable materials, provided by external suppliers, and recycled materials deriving from the

Model structure

In this section we present our SD model. Section 4.1 maps the generic causal-loop diagram of the closed-loop supply chain. Because of their importance in our model, the causal-loop diagrams of Legislation and GIF are presented separately in Sections 4.2 and 4.3, respectively. Finally, we present the mathematical formulation of the model in Section 4.4. In Appendix 2 we present a glossary of all variable and parameter names and the values of parameters.

Empirical testing

Although the proposed model describes relationships already known, a full exploration of all interactions has yet to be published. To build confidence in the model, it is necessary to assess whether the individual relationships can operate among each other simultaneously [11].

Firstly, we tested the model against a particular real-world application, that of a closed-loop supply chain of electronic and electrical equipment in Greece (Section 5.1). We used data from a Greek municipality named

Compliance of Kozani with the Directive's Requirements

In this section we examine Kozani's ability to comply with the requirements of Directive on WEEE.

For simplification we assume that all stocks in the beginning of the planning horizon are equal to zero except for Non_Renewable_Materials, which we assume to suffice for 180 years if their usage rate is 10,000 items/week, Collected_Products, which are three items, and the inventory of recycled materials, which are 100 items.

We assume, according to the Directive on WEEE, that Legislation1 = 80%,

Sensitivity analysis and discussion

In this section we demonstrate the conduct of variables' sensitivity analyses along with few interesting insights.

A complete numerical investigation of the model's behavior requires the study of a large number of problem instances with various levels of system parameters; such a detailed experimental design is practically impossible concerning the large number of model parameters. Hence, firstly we concentrate on the effects of Legislation1, Legislation2 and Legislation3 on

Conclusions

In this manuscript we presented the development of an SD model for a single producer, single product closed-loop supply chain with recycling activities applied to a real-world application. It can be used to understand the long-term system behavior under various environmental issues that lead to “ecological motivation”. The numerical examples provided insights according to the environmental policies expected to perform best.

The developed model can further be used as a methodological tool for the

Acknowledgments

The authors would like to thank the staff of the municipality of Kozani for the supply of valuable data. The second author would like to thank the Greek State Scholarships Foundation for making this research possible.

Patroklos Georgiadis (Tel.: +30 2310 996046; fax: 30 2310 996018, e-mail: [email protected]) is Associate Professor at the Department of Mechanical Engineering at the Aristotle University of Thessaloniki (A.U.Th.). He received the Diploma in Mechanical Engineering and Ph.D. in System Dynamics from A.U.Th. He teaches production and operations management, production planning and control and system dynamics. His research interests are in industrial management and system dynamics applications. He is a

References (48)

  • E. Van der Laan et al.

    An investigation of lead-time effects in manufacturing/remanufacturing systems under simple push and pull control strategies

    European Journal of Operational Research

    (1999)
  • L.C. Angell et al.

    Integrating environmental issues into the mainstream: an agenda for research in operations management

    Journal of Operations Management

    (1999)
  • M.C. Gupta

    Environmental management and its impact on the operations function

    International Journal of Operations & Production Management

    (1995)
  • Y. Umeda et al.

    Study on life-cycle design for the post mass production paradigm

    Artificial Intelligence for Engineering Design, Analysis and Manufacturing

    (2000)
  • ...
  • W.R. Newman et al.

    An empirical exploration of the relationship between manufacturing strategy and environmental management

    International Journal of Operations & Production Management

    (1996)
  • G. Azzone et al.

    Identifying effective PMSs for the deployment of “green” manufacturing strategies

    International Journal of Operations & Production Management

    (1998)
  • A. Wils

    End-use or extraction efficiency in natural resource utilization: which is better?

    System Dynamics Review

    (1998)
  • J. Fiksel

    Design for environment: creating eco-efficient products and processes

    (1996)
  • J.W. Forrester

    Industrial dynamics

    (1961)
  • J.D. Sterman

    A skeptic's guide to computer models

  • S.L. Hart

    Beyond greening: strategies for a sustainable world

    Harvard Business Review

    (1997)
  • R.Y. Cavana et al.

    Environmental and resource systems: Editors' introduction

    System Dynamics Review

    (2004)
  • J.W. Forrester

    World dynamics

    (1971)
  • Cited by (197)

    View all citing articles on Scopus

    Patroklos Georgiadis (Tel.: +30 2310 996046; fax: 30 2310 996018, e-mail: [email protected]) is Associate Professor at the Department of Mechanical Engineering at the Aristotle University of Thessaloniki (A.U.Th.). He received the Diploma in Mechanical Engineering and Ph.D. in System Dynamics from A.U.Th. He teaches production and operations management, production planning and control and system dynamics. His research interests are in industrial management and system dynamics applications. He is a member of the System Dynamics Society, the Hellenic Chapter of System Dynamics Society, the Hellenic Operational Research Society and the Technical Chamber of Greece.

    Maria Besiou (Tel.: +30 2310 995986; fax: +30 2310 996018, e-mail: [email protected]) received the Diploma in Mechanical Engineering from A.U.Th. As a Greek State Scholarships Foundation scholar, she is a Ph.D. student in the Industrial Management Division of A.U.Th. studying sustainable development using the System Dynamics Methodology. She is a member of the Technical Chamber of Greece.

    View full text