Building contingency planning for closed‐loop supply chains with product recovery

Abstract Contingency planning is the first stage in developing a formal set of production planning and control activities for the reuse of products obtained via return flows in a closed‐loop supply chain. The paper takes a contingency approach to explore the factors that impact production planning and control for closed‐loop supply chains that incorporate product recovery. A series of three cases are presented, and a framework developed that shows the common activities required for all remanufacturing operations. To build on the similarities and illustrate and integrate the differences in closed‐loop supply chains, Hayes and Wheelwright’s product–process matrix is used as a foundation to examine the three cases representing Remanufacture‐to‐Stock (RMTS), Reassemble‐to‐Order (RATO), and Remanufacture‐to‐Order (RMTO). These three cases offer end‐points and an intermediate point for closed‐loop supply operations. Since they represent different positions on the matrix, characteristics such as returns volume, timing, quality, product complexity, test and evaluation complexity, and remanufacturing complexity are explored. With a contingency theory for closed‐loop supply chains that incorporate product recovery in place, past cases can now be reexamined and the potential for generalizability of the approach to similar types of other problems and applications can be assessed and determined.