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Initiating Original Equipment Manufacturer Remanufacturing
Linköping University, Department of Management and Engineering, Environmental Technology and Management. Linköping University, Faculty of Science & Engineering.
2022 (English)Licentiate thesis, comprehensive summary (Other academic)
Abstract [en]

Remanufacturing is an industrial process in which a core – a used, discarded, or broken product – is transformed into a product whose specification and condition are new-like. However, to this date, remanufacturing activities on the market are few in comparison to manufacturing. There are several types of remanufacturers; the least common type is the original equipment remanufacturer, an original equipment manufacturer that not only manufactures new products but also remanufactures cores of its own products. The potential for remanufacturing to become a more widely used industrial process for original equipment manufacturers is therefore high. Increased remanufacturing activities can positively contribute to the environment by transforming cores into a new-like condition instead of manufacturing new ones. The contribution comes from a reduction of raw material and energy consumption compared to manufacturing. Therefore, remanufacturing has the potential to decouple environmental impact from economic growth, thus contributing to more sustainable societies. However, assessing the benefits of remanufacturing does not directly correlate to growth within the remanufacturing industry. To encapsulate the environmental, social, and economic benefits of remanufacturing, manufacturers need to be aware of how remanufacturing can be initiated and implemented in practice with positive economic effects. The aim of this licentiate thesis, therefore is, to explore how original equipment manufacturers can initiate profitable remanufacturing. 

This research takes a stand in a single case study where the prospect of profitable remanufacturing is studied at an original equipment manufacturer. The applied case study developed knowledge of how remanufacturing could be incorporated into existing operations at an original equipment manufacturer. In parallel, analytical economic assessment models based on cost-benefit analysis were built to measure how well the case company could perform remanufacturing. There were seven primary remanufacturing scenarios developed, ranging from centralised remanufacturing performed by the original equipment manufacturer to decentralised performed at multiple locations using a retail network. Which scenario is preferable depends on, for example, risk-consciousness, cooperation between actors, and volume targets. However, given ideal circumstances, remanufacturing in-house in a centralised scenario was the most beneficial for the original equipment manufacturer since the fewer middle hands and economies of scale also enable lower costs. 

The modelled remanufacturing scenarios were based on a set of eight prerequisite factors for original equipment manufacturer remanufacturing that were derived during this research. These factors are divided into essential and supporting prerequisite factors and are illustrated through a framework called the remanufacturing rocket. The essential factors highlight fundamental requirements to perform remanufacturing. Should one of the four factors be missing, remanufacturing cannot be successfully initiated. The supporting factors can be neglected to a larger extent but are valuable to enhance the effectiveness and efficiency of the process, such as by streamlined operations, organisational change, or information exchange. Hence, to reach the fullest potential of remanufacturing, both the essential and the supporting factors are needed. 

Conclusively, as an answer to the thesis aim, it is proposed to apply the prerequisite factors together with an economic assessment in an iterative manner to investigate the profitability of initiating remanufacturing at original equipment manufacturers. The essential prerequisite factors influence the first iteration of the economic assessment, which then contributes to refinements of how the essential factors should be aligned in an economically preferable way. Once satisfactory, another iterative process could be initiated between the supporting prerequisite factors and the economic assessment. By using the proposed approach, the prospects of profitable remanufacturing could be thoroughly investigated before attempting to initiate a process in practice, thus reducing the number of resources spent in vain. Additionally, the iterative process was integrated into a five-step approach for initiating remanufacturing (5AFIR) to guide original equipment manufacturers towards initiating profitable remanufacturing. Through applying this approach, it was shown that the case company could initiate profitable remanufacturing.

Abstract [sv]

Återtillverkning är en industriell process där en stomme – en använd, uttjänt, eller trasig produkt – omformas till en produkt vars specifikation och kvalitet motsvarar nyskick. Men återtillverkning utgör endast en liten del av den totala tillverkningsindustrin. Inom återtillverkning finns det flera typer av återtillverkare; den ovanligaste är originaltillverkande återtillverkare, det vill säga, ett tillverkande företag som även återtillverkar sina egna produkter. Genom att det idag är en låg grad av återtillverkning bland originaltillverkare finns det utrymme för att verka för en ökning. Ökade återtillverkningsaktiviteter kan bidra till miljömässiga fördelar genom att nya produkter ersätts med återtillverkade motsvarigheter. Detta bidrag uppstår genom en reduktion av mängden råmaterial och energi som konsumeras i förhållande till nytillverkning. Det finns därför en möjlighet för återtillverkning att bidra till en frikoppling av miljömässig påverkan från ekonomisk tillväxt, vilket i sin tur bidrar till ett mer hållbart samhälle. Fast att endast värdera nyttan av återtillverkning leder inte direkt till en tillväxt inom återtillverkningsindustrin. För att omfamna de miljömässiga, sociala, och ekonomiska nyttor som återtillverkning kan bidra med måste originaltillverkare vara medvetna om hur återtillverkning kan initieras och implementeras i praktiken på ett ekonomiskt lönsamt sätt. Syftet med denna licentiatavhandling är därför att utforska hur originaltillverkare kan initiera lönsam återtillverkning.

Denna forskning utgår från en fallstudie vid en originaltillverkare där möjligheterna för lönsam återtillverkning studeras. Den tillämpade fallstudien bidrog till att utveckla kunskap om hur återtillverkning kan integreras i en originaltillverkares befintliga försörjningskedja. Parallellt med fallstudien utvecklades analytiska ekonomiska värderingsmodeller för att tillhandahålla ett mått på hur väl fallföretaget skulle kunna utföra återtillverkning. I samband med detta utvecklades sju återtillverkningsscenarion. Dessa innefattar centraliserad återtillverkning som utförs av originaltillverkaren och decentraliserad återtillverkning som utförs vid flertalet platser inom ett återförsäljarnätverk. Vilket scenario som är mest fördelaktigt beror exempelvis på riskmedvetenhet, samarbete mellan aktörer, och tillverkningsvolym. Men givet ideala förhållanden visades det att centraliserad återtillverkning är mest fördelaktigt för originaltillverkaren, eftersom färre mellanhänder och skalfördelar möjliggör lägre kostnader.

De sju återtillverkningsscenariona baserades på åtta förutsättningsfaktorer som utvecklades för att forma krav för hur originaltillverkare kan initiera återtillverkning. Dessa faktorer delas upp i grundläggande och stödjande förutsättningsfaktorer, och de bygger tillsammans upp ett ramverk benämnt återtillverkningsraketen. De grundläggande faktorerna lyfter fram elementära krav vid utförandet av återtillverkning. Om en av de fyra grundläggande faktorerna skulle saknas kan återtillverkning inte utföras på ett framgångsrikt sätt. De stödjande faktorerna kan i större utsträckning utelämnas, men de är av värde för att förbättra återtillverkningseffektiviteten genom exempelvis bekymmersfritt utförande av processer, organisationsförändringar, eller informationsutbyten. Därigenom, för att nå den fulla potentialen av återtillverkning, behövs både de grundläggande och de stödjande förutsättningsfaktorerna.

Slutligen, som ett svar på avhandlingens syfte, föreslås det att tillämpa de framtagna förutsättningsfaktorerna tillsammans med en ekonomisk värdering genom att iterativt undersöka möjligheterna för hur återtillverkning kan initieras för originaltillverkare. De grundläggande förutsättningsfaktorerna influerar upplägget för den första iterationen av den ekonomiska värderingen, vilken i sin tur nyttjas för att förfina hur de grundläggande faktorerna kan läggas samman på ett ekonomiskt fördelaktigt sätt. När en godtagbar nivå uppnåtts kan ytterligare en iterativ process utföras mellan de stödjande förutsättningsfaktorerna och den ekonomiska värderingen. Genom att tillämpa det föreslagna tillvägagångssättet kan möjligheterna för återtillverkning undersökas på en detaljerad nivå innan initieringsförsök i praktiken, och således kan mängden resurser reduceras som annars hade konsumerats förgäves. Utöver detta integrerades det iterativa tillvägagångssättet med en femstegsansats för initiering av återtillverkning (5AFIR) för att vägleda originaltillverkare mot lönsam initiering av återtillverkning. Genom att tillämpa denna ansats visades det att fallföretaget skulle kunna initiera lönsam återtillverkning.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2022. , p. 87
Series
Linköping Studies in Science and Technology. Licentiate Thesis, ISSN 0280-7971 ; 1934
Keywords [en]
Remanufacturing, Circular economy, Value-retention process, Economic assessment, Initiation, Prerequisite.
Keywords [sv]
Återtillverkning, Cirkulär ekonomi, Värdebevarande process, Ekonomisk värdering, Initiering, Förutsättning.
National Category
Production Engineering, Human Work Science and Ergonomics
Identifiers
URN: urn:nbn:se:liu:diva-184798DOI: 10.3384/9789179293208ISBN: 9789179293192 (print)ISBN: 9789179293208 (electronic)OAI: oai:DiVA.org:liu-184798DiVA, id: diva2:1656437
Presentation
2022-06-02, ACAS, A-building, Campus Valla, Linköping, 09:00 (English)
Opponent
Supervisors
Note

Funding agencies: The VINNOVA Challenge-driven innovation initiative and the project ElevatoRe: Elevate remanufacturing to EEE manufacturers’ strategy towards circular economy (dnr: 2018-00330). 

The Swedish Energy Agency through the “Remometer” project, dnr 2019-021532, within the strategic innovation program RE:Source. 

The Mistra REES (Resource Efficient and Effective Solutions) program (No. 2014/16), funded by Mistra (The Swedish Foundation for Strategic Environmental Research). 

Available from: 2022-05-06 Created: 2022-05-06 Last updated: 2022-05-06Bibliographically approved
List of papers
1. Prerequisite factors for original equipment manufacturer remanufacturing
Open this publication in new window or tab >>Prerequisite factors for original equipment manufacturer remanufacturing
2020 (English)In: Journal of Cleaner Production, ISSN 0959-6526, E-ISSN 1879-1786, Vol. 270, p. 1-11, article id 122309Article in journal (Refereed) Published
Abstract [en]

Natural resources are being depleted at an alarming rate, also resulting in increased emissions and pollution. The call for a circular economy and sustainable strategies is now louder than ever. Remanufacturing can alleviate our environmental impact while still providing opportunities for profitable business. However, there is a need for a framework detailing the necessary steps for a successful remanufacturing start-up. This paper aims to identify the essential and supportive factors an original equipment manufacturer (OEM) must consider when transitioning part of its business to remanufacturing. Such factors could aid both current actors in the industrial setting as well as make way for further investigations and more advanced frameworks from the scientific field. The task is carried out through a novel combination of prior research on production development and remanufacturing, with support from a case study performed at an electrical and electronic equipment (EEE) manufacturer. This paper concludes that the first essential factors to be addressed when switching orientation towards remanufacturing can be contained in four categories: core acquisition and reverse logistics, labor skill and availability, remanufacturing facilities, and remanufacturing process and technology. Secondary supporting factors include design for remanufacturing and information feedback, remanufacturing process improvements, remanufacturing market knowledge, and organization, planning and control.

Place, publisher, year, edition, pages
Elsevier, 2020
Keywords
Remanufacturing, Remanufacturing transition, Production development, Production system, Circular economy
National Category
Production Engineering, Human Work Science and Ergonomics
Identifiers
urn:nbn:se:liu:diva-168127 (URN)10.1016/j.jclepro.2020.122309 (DOI)000579071300041 ()2-s2.0-85087109075 (Scopus ID)
Funder
Vinnova, 2018-00330
Note

Funding agencies: case company, Husqvarna AB; VINNOVA Challenge-driven innovation initiativeVinnova; project ElevatoRe: Elevate remanufacturing to EEE manufacturers strategy towards circular economy [2018-00330]

Available from: 2020-08-17 Created: 2020-08-17 Last updated: 2024-04-29Bibliographically approved
2. Economic evaluation of potential locations for remanufacturing in an extended supply chain: a case study on robotic lawn mowers
Open this publication in new window or tab >>Economic evaluation of potential locations for remanufacturing in an extended supply chain: a case study on robotic lawn mowers
2020 (English)In: / [ed] Brissaud D., Zwolinski P., Paris H., Riel A., Elsevier, 2020, Vol. 90, p. 14-18Conference paper, Published paper (Refereed)
Abstract [en]

As environmental issues attract more concern, shifting towards sustainable manufacturing that includes remanufacturing has become a strategic solution to enable a profitable business while improving environmental performance. The aim of this paper is to investigate the economic feasibility of remanufacturing at different supply chain locations for a robotic lawn mower manufacturer attempting to expand their business. Through a case study, five potential location categories were identified, of which two were deemed economically feasible: spare parts warehouse (OEM) and decentralized (dealers). The other three alternatives were deemed inferior in comparison, or only plausible, but identified as risky through a sensitivity analysis.

Place, publisher, year, edition, pages
Elsevier, 2020
Series
Procedia CIRP, ISSN 2212-8271
Keywords
Remanufacturing, Economic evaluation, Facility location, Closed-loop supply chain
National Category
Production Engineering, Human Work Science and Ergonomics
Identifiers
urn:nbn:se:liu:diva-168132 (URN)10.1016/j.procir.2020.01.087 (DOI)2-s2.0-85092434378 (Scopus ID)
Conference
27th CIRP Life Cycle Engineering (LCE) Conference, Grenoble, France, May 13-15, 2020
Funder
Vinnova, 2018-00330
Available from: 2020-08-17 Created: 2020-08-17 Last updated: 2022-05-06Bibliographically approved
3. Assessing an EEE manufacturer's economic benefit with remanufacturing
Open this publication in new window or tab >>Assessing an EEE manufacturer's economic benefit with remanufacturing
2021 (English)Conference paper, Published paper (Refereed)
Abstract [en]

An integration of remanufacturing into an original equipment manufacturer’s (OEM) value chain can enhance circularity. In order to realize a transition towards circularity, it must be economically beneficial. This paper aims to compare and economically evaluate several remanufacturing scenarios with varied retailer involvement, to identify how an electrical and electronic equipment (EEE) manufacturer can perform remanufacturing profitably. To meet the aim of this paper, data was gathered through more than 50 semi-structured and unstructured interviews, including workshops with a robotic lawn mower manufacturer and eight of its retailers in Sweden, and through a literature review in the fields of remanufacturing, acquisition of cores (used products), and sales of remanufactured products. The scenarios consist of a decentralized, with minor or no involvement of an OEM, and six centralized, where an OEM manages remanufacturing. Here, looking at a case of the centralized scenario, the remanufacturing process is performed at the OEM manufacturing plant in a European low-wage country, while cores are acquired in Sweden. This research concludes that the OEM’s economic benefits are greater in remanufacturing scenarios with low involvement of retailers. However, succeeding with acquisition and sales without retailers requires establishing new retail channels, which also leads to uncertainties.

Place, publisher, year, edition, pages
Elsevier, 2021
Series
Procedia CIRP, ISSN 2212-8271 ; 98
Keywords
Remanufacturing, Economic benefit, Circular economy, Product life-cycle, Product-service system, Value-retention process
National Category
Mechanical Engineering Economics and Business
Identifiers
urn:nbn:se:liu:diva-174334 (URN)10.1016/j.procir.2021.01.013 (DOI)001491497900018 ()2-s2.0-85102646308 (Scopus ID)
Conference
28th CIRP Conference on Life Cycle Engineering, Jaipur, India, March 10-12, 2021
Funder
Swedish Energy Agency, 2019-021532
Available from: 2021-03-19 Created: 2021-03-19 Last updated: 2025-10-10Bibliographically approved

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