Value Cycles

Today, ecologically-effective and economically-efficient added value is key to sustainable business management. In an ideal situation, a product is designed in such a way so that it is not disposed of as waste after when its life is over. Instead, the raw materials it contains are fully recovered in their original quality. At Fraunhofer IPA, we not only implement this concept for products but also extend it to include production and organization processes. These material cycles are also known as closed-loop supply chains.

In our projects, we consider value cycles from a holistic point of view: we find out if and how products can be cost-effectively returned to existing production processes.

The aim is to reuse resources again and again in the economic cycle at the same level of value, recycling products, subassemblies or even just components. The more resources that are reused, the less dependent economic growth becomes on the consumption of raw materials.

Challenges of value cycles

Companies wanting to close the gaps in their value chain are typically faced with the following challenges:

  • Added complexity due to the expansion of the supply chain by product returns
  • Intensified customer integration into the value chain
  • The existence of planning uncertainties due to product returns

If a conventional value chain is extended by a value cycle, product and information flows become much more complex. These have to be organized, planned, regulated and monitored. Material and information flows responsible for the supply, redistribution and reshaping of products are therefore core features of a value cycle.

Advantages of a closed-loop economy

Both industry and the environment benefit from sustainable value cycles: the capacity of industrial machines increases, material costs are lowered, less waste is generated and manufacturers are able to comply with the rising number of environmental requirements. Companies with closed-loop systems use resources sustainably, improve material efficiency and conserve the environment.


Fraunhofer IPA helps companies organize, plan and control their logistics and production processes under the general framework of a closed loop supply chain. We implement state-of-the-art planning and control methods and tools that we have developed in the course of various research projects.