Towards a Unified Understanding and Management of Closed Loop Operations

Abstract

In recent years, companies have been emphasizing several initiatives to address environmental concerns that have given rise to regulatory risks, natural resource constraints and climate change which have negatively affected the business prospects. Among the initiatives, closed loop operation is the most comprehensive one because of its potential to accomplish the lofty goal of “cradle to cradle” in which material resources used in a business cycle are returned back to their original states for reuse in the next cycle. In light of four interconnected studies, this chapter identifies the key elements of closed loop operations, analyzes their significance in business and environmental performance and suggests models and considerations for managing the operations cost-effectively. Specifically, the chapter articulates the significance of remanufacturing and reuse of used products as the corner stone of closed loop operations, recognizes the criticality of acquisition of high quality used products in adequate quantity for cost-effective remanufacturing, establishes the need for appropriate incentives to motivate consumers for timely return products, and highlights the significance of intense communication with internal and external stakeholders for effective integration for environmental operations. The exposition aims to aid in developing a unified understanding of closed loop operations and suggests directions for future research to address additional challenging issues.