Process innovation for green product in a closed loop supply chain with remanufacturing. (English) Zbl 1541.90045
Summary: The rapid development of green products, such as electric vehicle (EV) batteries, has brought about challenges in recycling and remanufacturing. To help tackle these challenges, in this research, we investigate how process innovation affects green product remanufacturing. Specifically, using game-theoretic models, we analyze process innovation strategies for green product remanufacturing in a closed-loop supply chain consisting of an upstream supplier and a downstream manufacturer. In these models, process innovation is implemented individually (i.e., non-cooperative mechanisms) by either the supplier or the manufacturer, or jointly (i.e., cooperative mechanism) by both firms. Our main findings are threefold. Firstly, process innovation can effectively improve remanufacturing performance while increasing the recovery rate of the manufacturer. Secondly, although the cooperative mechanism is always beneficial to the supplier, the supply chain and the environment, it may not be favourable by the manufacturer. Lastly, by extending the main models, we show that government subsidies can incentivise the manufacturer to adopt the cooperative mechanism, thereby achieving a win-win situation.
MSC:
| 90B06 | Transportation, logistics and supply chain management |
| 90B30 | Production models |
| 90B05 | Inventory, storage, reservoirs |
| 91A80 | Applications of game theory |
Keywords:
closed-loop supply chain; green product; process innovation strategy; EV battery; remanufacturingReferences:
| [1] | Agrawal, VV; Ferguson, M.; Toktay, LB; Thomas, VM, Is leasing greener than selling?, Management Science, 58, 3, 523-533, (2012) |
| [2] | Ai, N.; Zheng, J.; Chen, W-Q, US end-of-life electric vehicle batteries: Dynamic inventory modeling and spatial analysis for regional solutions, Resources Conservation and Recycling, 145, 208-219, (2019) |
| [3] | Akter, S., Michael, K., Uddin, M. R., McCarthy, G., & Rahman, M. (2020). Transforming business using digital innovations: The application of AI, blockchain, cloud and data analytics. Annals of Operations Research. |
| [4] | Akter, S.; Wamba, SF, Big data and disaster management: A systematic review and agenda for future research, Annals of Operations Research, 283, 1-2, 939-959, (2019) |
| [5] | Atasu, A.; Guide, VDR Jr; Van Wassenhove, LN, Product reuse economics in closed-loop supply chain research, Production and Operations Management, 17, 5, 483-496, (2008) |
| [6] | Atasu, A.; Souza, GC, How does product recovery affect quality choice?, Production and Operations Management, 22, 4, 991-1010, (2013) |
| [7] | Bernstein, F.; Koek, AG, Dynamic cost reduction through process improvement in assembly networks, Management Science, 55, 4, 552-567, (2009) · Zbl 1232.90172 |
| [8] | Bi, G.; Jin, M.; Ling, L.; Yang, F., Environmental subsidy and the choice of green technology in the presence of green consumers, Annals of Operations Research, 255, 1-2, 547-568, (2017) · Zbl 1380.90250 |
| [9] | Bian, J., Liao, Y., Wang, Y. Y., & Tao, F. (2020). Analysis of firm CSR strategies. European Journal of Operational Research. · Zbl 1487.90470 |
| [10] | Chakraborty, A., Kumar, R. R., & Bhaskar, K. (2020). A game-theoretic approach for electric vehicle adoption and policy decisions under different market structures. Journal of the Operational Research Society, 1-18. |
| [11] | Chen, CL, Design for the environment: A quality-based model for green product development, Management Science, 47, 2, 250-263, (2001) |
| [12] | Chen, X.; Wang, X.; Zhou, M., Firms’ green R&D cooperation behaviour in a supply chain: Technological spillover, power and coordination, International Journal of Production Economics, 218, 118-134, (2019) |
| [13] | Dai, R.; Zhang, J.; Tang, W., Cartelization or Cost-sharing? Comparison of cooperation modes in a green supply chain, Journal of Cleaner Production, 156, 159-173, (2017) |
| [14] | Diekmann, J.; Hanisch, C.; Froboese, L.; Schaelicke, G.; Loellhoeffel, T.; Foelster, A-S; Kwade, A., Ecological recycling of lithium-ion batteries from electric vehicles with focus on mechanical processes, Journal of the Electrochemical Society, 164, 1, A6184-A6191, (2017) |
| [15] | Ding, P.; Zhao, Z.; Li, X., Government subsidies in the power battery recycling industry, Industrial Management & Data Systems, 120, 6, 1059-1083, (2020) |
| [16] | Du, S.; Tang, W.; Zhao, J.; Nie, T., Sell to whom? Firm’s green production in competition facing market segmentation, Annals of Operations Research, 270, 1-2, 125-154, (2018) · Zbl 1411.90177 |
| [17] | Esenduran, G.; Kemahlioglu-Ziya, E.; Swaminathan, JM, Take-back legislation: Consequences for remanufacturing and environment, Decision Sciences, 47, 2, 219-256, (2016) |
| [18] | Fang, C.; You, Z.; Yang, Y.; Chen, D.; Mukhopadhyay, S., Is third-party remanufacturing necessarily harmful to the original equipment manufacturer?, Annals of Operations Research, 291, 1, 317-338, (2020) · Zbl 1448.90037 |
| [19] | Fan, E.; Li, L.; Wang, Z.; Lin, J.; Huang, Y.; Yao, Y.; Chen, R.; Wu, F., Sustainable recycling technology for Li-Ion batteries and beyond: challenges and future prospects, Chemical Reviews, 120, 14, 7020-7063, (2020) |
| [20] | Ferrer, G.; Swaminathan, JM, Managing new and remanufactured products, Management Science, 52, 1, 15-26, (2006) |
| [21] | Ferrer, G.; Swaminathan, JM, Managing new and differentiated remanufactured products, European Journal of Operational Research, 203, 2, 370-379, (2010) · Zbl 1177.90125 |
| [22] | Galbreth, MR; Boyaci, T.; Verter, V., Product reuse in innovative industries, Production and Operations Management, 22, 4, 1011-1033, (2013) |
| [23] | Ge, Z.; Hu, Q.; Xia, Y., Firms’ R& D cooperation behavior in a supply chain, Production and Operations Management, 23, 4, 599-609, (2014) |
| [24] | Gu, H.; Liu, Z.; Qing, Q., Optimal electric vehicle production strategy under subsidy and battery recycling, Energy Policy, 109, 579-589, (2017) |
| [25] | Gu, X.; Ieromonachou, P.; Zhou, L.; Tseng, M-L, Optimising quantity of manufacturing and remanufacturing in an electric vehicle battery closed-loop supply chain, Industrial Management & Data Systems, 118, 1, 283-302, (2018) |
| [26] | Hazen, BT; Skipper, JB; Boone, CA; Hill, RR, Back in business: Operations research in support of big data analytics for operations and supply chain management, Annals of Operations Research, 270, 1-2, 201-211, (2018) |
| [27] | Han, X.; Shen, Y.; Bian, Y., Optimal recovery strategy of manufacturers: Remanufacturing products or recycling materials?, Annals of Operations Research, 290, 1-2, 463-489, (2020) · Zbl 1447.90009 |
| [28] | Hong, X.; Xu, L.; Du, P.; Wang, W., Joint advertising, pricing and collection decisions in a closed-loop supply chain, International Journal of Production Economics, 167, 12-22, (2015) |
| [29] | Hong, Z.; Wang, H.; Gong, Y., Green product design considering functional-product reference, International Journal of Production Economics, 210, 155-168, (2019) |
| [30] | Hong, Z.; Wang, H.; Yu, Y., Green product pricing with non-green product reference, Transportation Research Part E-Logistics and Transportation Review, 115, 1-15, (2018) |
| [31] | Hu, J.; Hu, Q.; Xia, Y., Who should invest in cost reduction in supply chains?, International Journal of Production Economics, 207, 1-18, (2018) |
| [32] | Li, J.; Yi, L.; Shi, V.; Chen, X., Supplier encroachment strategy in the presence of retail strategic inventory: Centralization or decentralization?, Omega, (2020) · doi:10.1016/j.omega.2020.102213 |
| [33] | Jaguemont, J.; Boulon, L.; Dube, Y., A comprehensive review of lithium-ion batteries used in hybrid and electric vehicles at cold temperatures, Applied Energy, 164, 99-114, (2016) |
| [34] | Jamali, M-B; Rasti-Barzoki, M., A game theoretic approach for green and non-green product pricing in chain-to-chain competitive sustainable and regular dual-channel supply chains, Journal of Cleaner Production, 170, 1029-1043, (2018) |
| [35] | Kamble, SS; Gunasekaran, A., Big data-driven supply chain performance measurement system: A review and framework for implementation, International Journal of Production Research, 58, 1, 65-86, (2020) |
| [36] | Kerr, W.; Ryan, C., Eco-efficiency gains from remanufacturing: A case study of photocopier remanufacturing at Fuji Xerox Australia, Journal of Cleaner Production, 9, 1, 75-81, (2001) |
| [37] | Kim, S-H; Netessine, S., Collaborative cost reduction and component procurement under information asymmetry, Management Science, 59, 1, 189-206, (2013) |
| [38] | Kleber, R.; Reimann, M.; Souza, GC; Zhang, W., Two-sided competition with vertical differentiation in both acquisition and sales in remanufacturing, European Journal of Operational Research, 284, 2, 572-587, (2020) · Zbl 1441.90006 |
| [39] | Li, J., Ku, Y., Liu, C., & Zhou, Y. (2020). Dual credit policy: Promoting new energy vehicles with battery recycling in a competitive environment? Journal of Cleaner Production, 243. |
| [40] | Liu, Z.; Li, KW; Li, B-Y; Huang, J.; Tang, J., Impact of product-design strategies on the operations of a closed-loop supply chain, Transportation Research Part E-Logistics and Transportation Review, 124, 75-91, (2019) |
| [41] | Porter, ME; Linde, CVD, Green and competitive: Ending the stalemate, Harvard Business Review, 28, 6, 128-129122, (1995) |
| [42] | Qiang, Q., The closed-loop supply chain network with competition and design for remanufactureability, Journal of Cleaner Production, 105, 348-356, (2015) |
| [43] | Reimann, M.; Xiong, Y.; Zhou, Y., Managing a closed-loop supply chain with process innovation for remanufacturing, European Journal of Operational Research, 276, 2, 510-518, (2019) · Zbl 1430.90126 |
| [44] | Rui, D.; Zhang, J.; Tang, W., Cartelization or Cost-sharing? Comparison of cooperation modes in a green supply chain, Journal of Cleaner Production, 156, 159-173, (2017) |
| [45] | Sana, S. S. (2020). Price competition between green and non green products under corporate social responsible firm. Journal of Retailing and Consumer Services, 55. |
| [46] | Savaskan, RC; Bhattacharya, S.; Van Wassenhove, LN, Closed-loop supply chain models with product remanufacturing, Management Science, 50, 2, 239-252, (2004) · Zbl 1232.90119 |
| [47] | Savaskan, RC; Van Wassenhove, LN, Reverse channel design: The case of competing retailers, Management Science, 52, 1, 1-14, (2006) · Zbl 1232.90120 |
| [48] | Shao, L.; Yang, J.; Zhang, M., Subsidy scheme or price discount scheme? Mass adoption of electric vehicles under different market structures, European Journal of Operational Research, 262, 3, 1181-1195, (2017) · Zbl 1376.91095 |
| [49] | Shao, Y., Deng, X., Qing, Q., & Wang, Y. (2018). Optimal battery recycling strategy for electric vehicle under government subsidy in China. Sustainability, 10(12). |
| [50] | Shen, B.; Cao, Y.; Xu, X., Product line design and quality differentiation for green and non-green products in a supply chain, International Journal of Production Research, 58, 1, 148-164, (2020) |
| [51] | Shi, T.; Gu, W.; Chhajed, D.; Petruzzi, NC, Effects of remanufacturable product design on market segmentation and the environment, Decision Sciences, 47, 2, 298-332, (2016) |
| [52] | Tang, Y., Zhang, Q., Li, Y., Li, H., Pan, X., & McLellan, B. (2019). The social-economic-environmental impacts of recycling retired EV batteries under reward-penalty mechanism. Applied Energy, 251. |
| [53] | Tang, Y.; Zhang, Q.; Li, Y.; Wang, G.; Li, Y., Recycling mechanisms and policy suggestions for spent electric vehicles’ power battery—A case of Beijing, Journal of Cleaner Production, 186, 388-406, (2018) |
| [54] | Tong, S.; Fung, T.; Klein, MP; Weisbach, DA; Park, JW, Demonstration of reusing electric vehicle battery for solar energy storage and demand side management, Journal of Energy Storage, 11, 200-210, (2017) |
| [55] | Wu, X.; Zhou, Y., Does the entry of third-party remanufacturers always hurt original equipment manufacturers?, Decision Sciences, 47, 4, 762-780, (2016) |
| [56] | Wen, D., Xiao, T., & Dastani, M. (2020). Pricing and collection rate decisions in a closed-loop supply chain considering consumers’ environmental responsibility. Journal of Cleaner Production, 262. |
| [57] | Wu, X.; Zhou, Y., Buyer-specific versus uniform pricing in a closed-loop supply chain with third-party remanufacturing, European Journal of Operational Research, 273, 2, 548-560, (2019) · Zbl 1403.90185 |
| [58] | Zhang, Q.; Zhang, J.; Zaccour, G.; Tang, W., Strategic technology licensing in a supply chain, European Journal of Operational Research, 267, 1, 162-175, (2018) · Zbl 1403.90190 |
| [59] | Zhao, S.; Zhu, Q., Remanufacturing supply chain coordination under the stochastic remanufacturability rate and the random demand, Annals of Operations Research, 257, 1-2, 661-695, (2017) · Zbl 1401.90043 |
| [60] | Zheng, X.; Govindan, K.; Deng, Q.; Feng, L., Effects of design for the environment on firms’ production and remanufacturing strategies, International Journal of Production Economics, 213, 217-228, (2019) |
| [61] | Zhu, M.; Liu, Z.; Li, J.; Zhu, SX, Electric vehicle battery capacity allocation and recycling with downstream competition, European Journal of Operational Research, 283, 1, 365-379, (2020) · Zbl 1431.90030 |
| [62] | Zhu, Q.; Sarkis, J.; Lai, K-H, Supply chain-based barriers for truck-engine remanufacturing in China, Transportation Research Part E-Logistics and Transportation Review, 68, 103-117, (2014) |
| [63] | Zhu, W.; He, Y., Green product design in supply chains under competition, European Journal of Operational Research, 258, 1, 165-180, (2017) · Zbl 1380.90066 |
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. In some cases that data have been complemented/enhanced by data from zbMATH Open. This attempts to reflect the references listed in the original paper as accurately as possible without claiming completeness or a perfect matching.
