A system dynamics model for improving the reverse supply chain using the IoT in the household appliances sector

The Internet of Things (IoT) is a global platform of Internet-connected smart devices that allows manufacturers to sensorize marketed products. Such products can provide manufacturers with feedback about relevant information, such as their status, use and location, which contributes to significantly reduce uncertainty in the time, quantity and quality of the products recovered during the reverse logistics (RL) process. This sensorization is especially simple in connected appliances given the ease of installing sensors inside. This work shows the convenience of using the IoT in the RL process of the household appliances sector by analyzing the impact on recovery management. To do so, it proposes a simulation model based on system dynamics. The main findings indicate that the IoT permits more reverse supply chains' inventory by significantly increasing collected products' average value. This, in turn, allows for more backorder demand to be met and improves the client service level. In light of all this, we conclude that the average RL process profit made with an IoT model is significantly better than the RL process without such a model. With this simulation model, it should also be noted that interoperability and communication improve throughout the supply chain, which allows better decision making.