Circular Supply Chain Design for Refurbishing Modular Products

Circular supply chains are key enablers to implement the circular economy (CE), however they are yet to be established in industries with significant environmental impacts. Refurbishing is ranked high among circular strategies as it extends the lifespan of products and preserves product functionality across multiple lifecyles. Nevertheless, it requires a challenging coordination of forward and reverse supply chains. This work investigates the optimal circular supply chain re-design for the refurbishment of modular products under three scenarios: (i) cost minimisation, (ii) CO2e emissions minimisation, (iii) cost and CO2e emissions minimisation in an eco-efficient configuration. A mixed-integer linear programming model was developed and applied to a case study of a three-tiers global mining equipment supply chain, contextually determining the location of the refurbishment facilities. Findings highlight that supplier selection has a significant impact on the overall supply chain re-design, while locating the facilities in customers’ proximity yields environmental benefits. This work contributes to the CE literature by designing optimal circular supply chains, which integrate a high-R imperative, such as refurbishing, while simultaneously considering product modularity, multi-modal transportation, economic and environmental objectives. The model could further support practitioners aiming to re-design circular supply chains based on the refurbishment of modular products.