Designing a omnichannel closed loop green supply chain network adapting preferences of rational customers

Abstract

The manufacturing industry in India started moving towards multi channel supply chain for delivering products to the customer by his preferred channel of purchasing. But firms are far behind to achieve a goal of omnichannel where there exists better interface between various channels which increases their customer range and customer comfort. Also, today consumer awareness had increased with respect to environmental protection while at the other end the government rules and regulations also force firms to go with adopting sustainability concepts like green and recycling processes in supply chains. This work deals with this major issue faced by the firms in India that how to integrate multiples channels in designing their supply chain network considering economic and environmental sustainability simultaneously. This paper presents a mathematical model for an integrated multi channel closed loop supply chain network problem, the modeling decisions that include the selection of the entity that will fulfill the demands of the omni channel customer during different time periods and the supplier selection process integrated with the production amounts, inventory levels, stockouts and shipment quantities. The aim of the model is to minimize the total cost incurred to the customer, total cost incurred in running the supply chain and minimize the total pollution emissions from all the transportations of the products between the different stages of the supply chain. It is a mixed integer programming problem considered for a leading kitchenware company in southern part of India and solved using IBM CPLEX optimizer. The result shows that how the dynamics of omni channel customer options affects the optimal supply chain structure.

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