Proactive Product Acquisition Mechanisms in a Closed-Loop Supply Chain (CLSC)

Reverse Logistics and Closed-Loop Supply Chain (CLSC) concepts have received constant recognition in this decade due to inappropriate waste disposal and need to capture remaining value in used products. The growing number of environmental regulations, shortening of product lifecycles coupled with the need to acquire products to enable profitable remanufacturing highlights the need for firms to strategically rethink their acquisition systems. The move from a mere waste stream system to a more proactive acquisition system will not only create a sustainable environment, but will also yield significant economic and social benefits. To contribute to this field, this research is intentionally carried out to examine proactive product acquisition mechanisms best suited for three categories of products by critically investigating product characteristics and accompanying uncertainties in returns timing, quality and quantity. The research employs case studies to investigate current product acquisition mechanisms and examines economic models which highlight the benefits of proactive product acquisition. Using eighteen case studies, twelve products were reviewed to provide empirical evidence for the practice of product acquisition in CLSCs. Learning from the cases; the research proposes a comparative framework table which analyses and justifies the mechanisms adopted for each category of products. This framework table provides firms with attributes to consider in selecting proactive product mechanisms for their RL processes. Furthermore, the economic models provided a means to explore the economic attractiveness of operating a proactive strategy over a passive strategy. This was investigated under limited component durability, quantity and quality-based incentive approaches and they serve as ‘best practices’ to inform the cases studied. Finally, the analysis emphasized the importance of considering product characteristics when choosing acquisition mechanism and confirmed the influence of financial incentives on returns quality, quantity and timing