Pascual Cortés-Pellicer¹, Faustino Alarcón² and David Pérez-Perales¹

¹ Department of Business Management, Universitat Politècnica de València, 46022, València.

² Research Centre on Production Management and Engineering (CIGIP), Universitat Politècnica de València, 46022, València (Spain).

pascorpe@omp.upv.es; faualva@omp.upv.es; dapepe@omp.upv.es

Keywords: Internet of things, Reverse Supply Chain, System Dynamics.

1. Introduction

The use of Internet of Things (IoT) is a great advance because it allows Reverse Supply Chain (RSC) to precisely manage the reverse flow of product and can become a crucial aspect for the development of the circular economy, especially in those sectors that manufacture products in which the incorporation and use of sensors is simple, such as the household appliances sector. This sector presents a series of characteristics that make it an ideal candidate for the use of IoT: a) the size and characteristics of most household appliances, favors the installation of sensors, which may be hidden from the customer view and not alter their functionality or design, b) the conditions and operation place of this type of products ensures the electrical supply to the sensors and allows their connection to the Internet, c) the impact of the placement of sensors on the final price of the product is very low in percentage terms and can be assumed by the market, and d) the household appliances sector is one of the generators of the highest amount of waste being these, in additionally, highly dangerous and polluting. Despite this, the works that study the specific household appliances RSC are scarce [1], as well as those that address the use of IoT in this sector.

The objective of this work is to analyze the impact of using IoT on the connected appliances RSC, through a simulation model based on System Dynamics (SD), comparing the performance of parameters such as inventory, service level and benefits, between a RSC with and without IoT.

2. Simulation

2.1 Description of the RSC to simulate

Three basic operations of the Reverse Logistics (RL) in the targeted household appliances RSC will be considered: product collection, inspection & sorting, and treatment or disposal. Based on these three operations, a three-stage RSC is defined, consisting of a product collection plant in the first stage, a plant for inspection and classification in the second stage, and three plants in the third stage, one for each of the most frequent appliance treatments in a circular economy context [2]: Reuse, Repair and Recycling.

2.2 Simulation objectives

This work aims to study the impact of IoT on a RSC, for which the performance of a RSC without IoT (scenario 1) will be compared to the same RSC with IoT (scenario 2), based on three traditional parameters used to measure the SC performance: 1) the inventory level, 2) the service level and 3) the benefit of the Recovery plant.

2.3 Simulation results

The simulation results indicate that, although the mean inventory values do not account for a significant difference for both scenarios (46.97 units for RSC with IoT vs 53.18 units for RSC without IoT), the first one (scenario 1) has fewer oscillations and less variability in recovery plant inventory levels than scenario 2.

In short, the simulation shows that the use of IoT in the RSC model increases the benefit  with respect to non-IoT-RSC.

3. Conclusions

One way to reduce the uncertainty regarding the quality, quantity and status of the products to be recovered in a RSC is through the information provided by IoT technologies. Despite the enormous potential for the use of IoT in the household appliances sector, and the importance it could have for reducing waste in one of the most polluting sectors in the world, the literature review indicates that the research that uses SD for RSC in this sector are practically non-existent. To fill this gap in the literature, this work has analyzed the impact of the use of IoT on RSC of household appliances through a simulation model based on SD. The results show that the use of IoT in RSC provides greater stability in the inventory, improves the level of service and increases the benefits of the Recovery Plant. Finally, some future research lines are suggested. On the one hand, to extend the analysis of the use of IoT to the rest of the household appliances RSC stages and, on the other hand, to deepen the study of the RSC behavior in this sector to improve the quality of the proposed models and, therefore, the obtained results.

References

1. W. Zhou, Y. Zheng, and W. Huang, “Competitive advantage of qualified WEEE recyclers through EPR legislation,” Eur. J. Oper. Res., vol. 257, no. 2, pp. 641–655, Mar. 2017.
2. A. Alcayaga, M. Wiener, and E. G. Hansen, “Towards a framework of smart-circular systems: An integrative literature review,” J. Clean. Prod., vol. 221, pp. 622–634, Jun. 2019.