IBM recently published a case study with the battery division of Johnson Controls. The supply chain for a battery is complicated because it is a closed loop. New batteries are shipped to the retailers. The retailers collect the used batteries and send them back back to the recycling center. The recycled batteries, along with new raw material, are then send back to the plants to make new batteries.
Although this closed-loop supply chain is complex, Johnson Controls still has to answer many typical network design questions such as:
- Which suppliers and facilities should be used to optimize transportation costs?
- How much capacity should be contracted with each supplier and facility?
- Which battery plant and distribution center should serve which customers?