A critical asssment of motives for product recovery:the ca
of engine remanufacturing
Margarete A.Seitz *
Im Leintal 14,79427Eschbach,Germany Accepted 28May 2006
Available online 20September 2006
水墨画人物>塞内加尔世界杯Abstract
Over the past decade,there has been an increasing interest in product take-back,product recovery and the (re-)distribution of the products.The automotive ctor,in particular,has a strong history of product recovery operations,such as remanufacturing.Alongside this development,an academic interest in the management of re-u,recycling or remanufacturing has evolved and developed into the field of clod-loop supply chain management.Clod-loop supply chain management,however,is only characterid by a short rearch history,the earliest contributions can be found on rever logistics and were published in the early 1990s.Due to the novelty of the field there are still a large number of unsolved rearch problems.One of the is the question for the rationale behind product recovery ope
rations.This rearch is bad on in-depth ca studies within the remanufacturing facilities of a major European Vehicle Manufacturer.The article examines whether the ‘classic’motives for product recovery are applicable to automotive remanufacturing.It concludes with a summary of the contributions this rearch makes to theory,to industry and to future rearch in the field.Ó2006Elvier Ltd.All rights rerved.
Keywords:Remanufacturing;Clod-loop supply chain management;Profitability;Environmental legislation;Ethical and moral responsibility;Original Equip-ment Manufacturer (OEM);Ca study
1.Introduction
Over the past decade,the increasing interest in product return,recovery and the distribution of recovered products has led to a number of contributions in the areas of rever logistics,product recovery and clod-loop supply chain management.The earliest contributions can be found on rever logistics,such as Stock [1]and Pohlen and Farris [2].More recent publications include Mukhopadhyay and Setoputro [3].While the works have focud specifically on rever logistics,which is defined as the physical move-ment of goods ‘in rever’to the conventional forward distribution,the field of rever logistics has developed into the investigation of the whole supply chain for
晚上英语recovered goods;the clod-loop supply chain (e.g.Seitz and Peattie [4]).
This article focus on the motives for product recovery in the automotive industry.There are various product recovery operations in the automotive ctor,including recycling,repair,reconditioning and remanufacturing.This article only investigates remanufacturing,which is defined as the transfor-mation of an end-of-life product into a product with an ‘as good as new’condition.Remanufacturing as a product recov-ery operation is extensive and includes product disasmbly,cleaning and identification of parts,parts recovery and product re-asmbly.Material recycling only occurs when parts and components cannot be reworked.
The automotive ctor is one of the first industries to prac-tice remanufacturing,however,the historic rationale behind remanufacturing is manifold and does not originate from one particular source.Compared to the manufacturing and distri-bution of new vehicles,automotive remanufacturing has
*Tel.:þ4971150505865;fax:þ4971150505333.E-mail address:itzma@cardiff.ac.uk.
0959-6526/$-e front matter Ó2006Elvier Ltd.All rights rerved.
doi:10.1016/j.jclepro.2006.05.029
Journal of Cleaner Production 15(2007)1147e
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remained largely invisible[5].Only recently is remanufactur-ing gaining scientific significance in a variety of industry ctors,such as photocopier[6],cellular telephone[7]or single-u camera remanufacturing[8].Three main players can be identified in the automotive remanufacturing market. Firstly,there are the original producers of the product,the so-called Original Equipment Manufacturer(OEM),who un-dertakes remanufacturing operations.The OEM can be either a vehicle manufacturer(VM)or a supplier of the original equipment.Most commonly,the OEM collects the ud prod-ucts and distributes the remanufactured products through the own logistics channels.Secondly,there are independent re-manufacturers who are not related to the car or the original equipment in any way,but remanufacture parts produced by the OEM.Independent remanufacturers tend to be small and work in a competitive environment.There is also a wide range of quality levels among independents.Thirdly,there are sub-contracted remanufacturers who perform rvices for the OEM.
The aim of this paper is to identify whether the reasons the literature traditionally discuss as motiv
ations for product re-covery apply to automotive engine remanufacturing under-taken by OEMs.The motives include ethical and moral responsibility and environmental legislation as well as the di-rect economic motive(profitability of the remanufacturing op-eration).This rearch makes veral distinct contributions. Firstly,it examines whether this‘classic rationale’is applica-ble to the automotive ctor.Secondly,it develops a new ratio-nale by identifying new,additional motives for automotive remanufacturing.Thirdly,it outlines the impact thefindings have on theory and theory-building.Finally,the article sum-maris implications for industry and concludes with recom-mendations for future rearch.
This rearch does not only aim to feed back to the rema-nufacturing ctor,but may provide new insights for the auto-motive ctor and other industries in which clod-loop supply chains play a role.In addition,the understanding of the ratio-nale behind remanufacturing,such as the identification of the motives behind product recovery operations,may assist policy makers in influencing the automotive remanufacturing ctor or steering it towards sustainable behaviour.
2.Methodology
This paper is bad on a three-year rearch project on au-tomotive remanufacturing.The rearch
has taken a ca-study approach with more than one hundred and thirty interviews conducted acrossfive ca companies(locations):
Ca Company1:A German bad engine remanufacturing plant,owned by a Vehicle Manufacturer(VM).
Ca Company2:The VM’s Global Warehou.
Ca Company3:The VM’s Headquarters.
Ca Company4:A UK-bad subcontracted engine
remanufacturer(providing rvices to a cond VM).
Ca Company5:A German bad independent remanufacturer.
Interviews were mi-structured,structured and ranged(in duration)from twenty minutes to veral hours.Interviewees came from all functional levels,including executives(centre manager;head of department),middle management(planners; administrators)and workers(asmbly-line staff;warehou operators).Interview data was supplemented with(process) obrvation,business process mapping and condary data gathering.
The insights prented here derive from detailed ca study rearch focusing on the engine remanufacturing operation of a major vehicle manufacturer.Three levels of the ca study’s supply chain were investigated,the remanufacturing plant,the main distribution centre and the company’s headquarters(ad-ministrative centre).Within the remanufacturing plant,the re-arch focud on the analysis of operational process,while rearch at the headquarters and the logistics centre considered the whole supply chain for recovered engines.
3.Motives for product recovery and
remanufacturing e literature review
The necessity to identify the motives for remanufacturing began to unfold when,during thefirstfield visit(Ca Company1)at the remanufacturing plant,profitability was questioned as one of the main motives for the OEM remanu-facturer.As a result,further motives for remanufacturing were called into question.
3.1.Moral and ethical responsibility
Within the literature on clod-loop supply chain manage-ment and the environmental social science
s,moral and ethical responsibility has often been identified as a motivator for prod-uct take-back and recovery.Industrial ecology theory,for example,assumes that humanity eks to maintain(deliber-ately and rationally)a‘desirable carrying capacity’[9].The concept of corporate social responsibility adds that a company is(morally or ethically)responsible for the impacts of its Refs.[10,11]).Also,contributors from thefields of clod-loop supply chain management and rever logistics have outlined the role of‘corporate citizenship’as motive for product Ref.[12]).Contributors have listed ‘green consumerism’,the‘green marketplace’and competi-tion as the main reasons for being socially Refs.[13,14]).Literature on rever logistics and product re-covery has also noted the commitment to environmental issues and ethics,as well as producer responsibility as reasons for undertaking rever logistics and product Refs.[15e20]).The assumptions have been tested within this rearch in order to discover whether they are valid for the automotive engine remanufacturing undertaken by the OEM.
3.2.Environmental legislation
There has been extensive discussion throughout the literature with regard to end-of-life take-back Ref.[21]),
1148M.A.Seitz/Journal of Cleaner Production15(2007)1147e1157
compliances with governmental Ref.[22]),pre-empting Ref.[23])or transforming regulative pressures into a competitive Refs.[24,25]). However,this rearch investigated a potential relationship between environmental regulations and product recovery operations,which many contributors have assumed as a given Refs.[26e30]).The article examines whether the ca companies have established and maintained their remanu-facturing activities becau of environmental product take-back and recovery legislation(such as the European End-of-Life Vehicle Directive,for example;e Ref.[31]for further information).
3.3.Profitability
Profitability of rever logistics,product recovery and other so-called‘green’activities,has been questioned from various rearch Ref.[32]).Some Refs.[33e35])assume that clod-loop supply chains includ-ing product recovery create economic and environmental ben-efiRef.[36])e a‘win-win’scenario in the business jargon.Within this group of rearchers,some,even consider the question of profitability as‘obvious’,yet the only obvious thing about the profitability of rever logistics is the need for more rearch[37].This is exactly what this article prents.It evaluates whether a direct economic profitability or remanufacturing)is the reason for Original Equipment Manufacturers(OEMs)to undertake remanufacturing of auto-motiv
e parts and components.
4.Motives for OEM automotive remanufacturing e ca study results
In this ction,the reasons for remanufacturing which have been taken from academic literature are examined for their applicability to the automotive remanufacturing ctor.The product group under investigation(pasnger car engines) was lected due to the fact that it was among thefirst automo-tive products to be remanufactured.This rearch has found that thefirst rationale for engine remanufacturing within Ca Company1was very likely the high rate of engine break-downs among previous engine generations.Conquently the Vehicle Manufacturer needed to provide replacements.Rema-nufacturing was therefore initially defined as an operation that provided replacements in a short period of time,and at a rea-sonable price.However,as technology has improved,it is assumed that the original reason for engine remanufacturing has become less significant and other reasons for OEM engine remanufacturing have emerged.
清宫定理4.1.Ethical and moral responsibility
Carroll[38]has prented the pillars of corporate social re-sponsibility(CSR),or,the‘range of business responsibilities’. The include economic responsibility(‘be profitable’)as ba-sis of the four additional
responsibilities,the legal,ethical and philanthropic responsibility.This ction aims to outline what has been described as‘ethical responsibility’by Carroll.In other words,it examines to what extent standards,norms and expectations,which are en as‘fair’or‘just’by sumers,employees or shareholders)have influenced the establishment of OEM automotive remanufac-turing operations.Holliday, al.[39]argue that corporate social responsibility results in three key benefits; improved brand value and reputation,improvements in human capital,and revenue generation.This ction,however,does not examine the key benefits or results of CSR,but questions ethical responsibility as a motive for automotive companies to undertake remanufacturing.
Interviewees were asked via open,non-directive questions about their companies’motivations for engine remanufactur-ing.None of the interviewees mentioned‘ethics’,‘green con-sumerism’,the‘green marketplace’,‘pressure from society’, or‘environmental responsibility’as motives for OEM remanu-facturing.It was therefore assumed that motives which were not mentioned by interviewees could not be considered as very significant and‘real-world’motivators for OEM remanu-facturing.However,there were further reasons why ethical and moral responsibility was not perceived as motives for engine remanufacturing.Esntially,the‘green’or‘ethical’consumer group could not be identified:
Our main customer target group for remanufactured en-gines[pasnger cars and light commercial vehicles]com-pris taxi and shipping companies as well asfleet owners.
吃虾不能吃什么The police are a good ca in point,too.The customers have one thing in common:they wear out engines quickly.1 In addition,interviewees confirmed they do not perceive any pressure from society with regard to environmental re-sponsibility that would drive or support OEM remanufactur-ing.In fact,veral respondents claimed that generally little is known about remanufactured products among the broad mass of‘common car urs’.The Manager for Cleaning and Identification at the remanufacturing plant of Ca Company 1explains:
The important thing is to point out the advantages of rema-nufactured products to the customers.Hardly any‘normal’customer knows about remanufactured engines.But the truth is that subsidiaries rather ll a new car than a remanu-factured engine.2
Another interviewee confirms:
An environmental responsibility or an environmental ra-tionale has zero influence on our remanufacturing efforts.
OEM remanufacturing is also not undertaken becau of
1Quoted from the interview with the Manager for the Core Warehousing and Dismantling Process at Ca Company1,June2002,translated from German.
2Quoted from the interview with the Manager for the Cleaning and Identi-fication Process at Ca Company1,June2002,translated from German.
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the ELV Directive.As I have mentioned before,the most important drivers are spare parts supply and warranty.3 There have been further reasons why ethical or moral re-sponsibility could not be confirmed a sole motive for OEM automotive remanufacturing.The automotive industry has al-ways focud on the making and distribution of new prod-ucts.This is also true for the aftermarket,where new products are distributed for the purpo of replacement.As a result,the whole industry is structured to suit the needs of new parts production and distribution.The return and re-covery of ud products was not anticipated to be a part of this structure.Remanufacturing may be en as‘less glamor-ous’than the distribution of new cars and may even result in negative brand image.Chris Hancock,the editor and publisher of veral industry journals has even obrved a‘contr
a-remanufacturing’attitude from VMs towards the in-dependent ctor:
趣味活动
The attitude to remanufacturing has never been positive [.].The VMs and to a degree the OEMs prefer to produce non-remanufacturable products.The only problem is as technology advances with the original product so it does in the aftermarket.4
Ferrer and Guide[40]confirm that a pure ethical reason can never be the main motive for remanufacturing.They fur-thermore argue that companies need to focus on investing in their core-activities,rather than offering eco friendly prod-ucts as part of ethical responsibility.Ferrer and Guide there-fore claim that the decision-making process with regard to an engagement in recovery activities should be bad on a thor-ough costs and benefits analysis.
Concluding,ethical or moral responsibility could not be confirmed as a motive for automotive remanufacturing with regard to the specific ca companies and the specific product group that was investigated.However,it is likely that the rel-evance of an ethical or moral motivation for remanufacturing may differ within other industries or may be valid for other products within the automotive ctor.In addition,as one in-terviewee has outlined,ethical or moral responsibility may not have been of significance at the time of the rearch, but may increa in importance in future,given continuous environmental degradation,for example.
4.2.Product take-back and recovery legislation
The cond motive for product take-back and recovery that was taken from the literature and investigated with regard to its applicability to the automotive ctor was product take-back and recovery legislation.The End-of-Life Vehicle Directive(ELV Directive)was chon as an example to exam-ine the motive of‘environmental’legislation as a driver for re-manufacturing.The ELV Directive requires that car producers are responsible for the costs of recycling of vehicles put on the market after1July2002.From1January2007they will be liable for recycling all vehicles,without consideration of a ve-hicle’s age.The ELV Directive ts successive recycling re-quirements.By1January,2006,all ELVs must have85%of their materials re-ud and recovered and by1January, 2015,the percentage targets will increa to95%and 85%,respectively.However,the ELV Directive not only aims to improve the recovery of end-of-life vehicles,but also eks to implement strategies which prevent the genera-tion of waste by making producers responsible for the costs of the implementation[41].
With regard to the implementation of environmental poli-cies,the power of legislation has already been confirmed by Murphy and Poist[42].While it is a different discussion to what extent remanufacturing contributes to environmental prervation,the role of product take-back legislation h
保安的职责和工作内容as been identified as a major reason for product recovery opera-tions and remanufacturing by main contributors in thefield (e.g.Ref.[43]).
In the cour of the rearch veral aspects were discov-ered which indicated that legislation has never been a reason for OEMs to undertake their activities.In the US and Europe there were a variety of historical developments that em to have nurtured the growth of a remanufacturing ctor:the include material scarcity during the Depression and the Second World War and demands from the racing industry. As a result the remanufacturing ctor developed long before environmental degradation was perceived as a worldwide is-sue.In Europe,where remanufacturing activities emed to have emerged slightly later than in the US,thefirst indepen-dent engine remanufacturing company was established at least 60years before thefirst European automotive product take-back and recovery regulation.One interviewee confirms: Engine remanufacturing has been operating since before the Second World War and has been way ahead of its time in recycling.Just leaving the fast moving automotive industry and engines ud in other applications such as ma-rine,industry,agriculture,commercial vehicles,classic cars,etc.are kept going through remanufacturing almost indefinitely.5
In addition the ELV Directive fails to cover two factors that are relevant to this rearch.On the one h
and the Directive re-fers to the car as a whole;hence an environmental contribution which is made by the recovery of certain components during a car’s life cycle is neither covered by the Directive nor credited to the original producer or remanufacturer in any way.An enquiry with the European Commission did not
3Quoted from the interview with the Product Manager for Service and Parts (Car Life Cycle Management)at Ca Company2,September2002,translated from German.
拟定合同
4Quoted from personal communication(letter)with Chris Hancock,the editor and publisher of practitioner and industry journals such as Engine Re-pair and Remanufacture and Vehicle Electrics and Electronics:Diagnostics and Emissions,Rye,UK,January2004.
5Quoted from personal communication(letter)with Chris Hancock,the editor and publisher of practitioner and industry journals such as Engine Repair and Remanufacture and Vehicle Electrics and Electronics:Diagnostics and Emissions,Rye,UK,January2004.
1150M.A.Seitz/Journal of Cleaner Production15(2007)1147e1157
confirm that remanufacturing during a car’s life cycle is credited to any industry player.In fact,the ELV Directive only refers to‘whole’vehicles which have become‘waste’.
In addition,the original manufacturer is not credited for the environmental contribution made by remanufacturing activities:
I am not aware that vehicle manufacturers can‘score’[with
regard to environmental take-back legislation].Particularly, since cores[ud parts]do not necessarily return to the ve-hicle manufacturer and the remanufactured parts are not imperatively distributed by the original manufacturer.[.] for the rest,the remanufacturing of valuable ud parts is not a result of environmental considerations,but takes place becau there is a profitable market.6
It may therefore be assumed that there is no direct link be-tween the original manufacturer’s obligations to take back the products for product recovery and the environmental contribu-tion made by the remanufacturing ctor.Neither does there em to be an‘environmental balance sheet’in which the en-vironmental(and therefore legal)contribution of automotive remanufacturing is recorded and accredited.
The argument of legislation being a reason for remanufac-turing is again weakened by the fact that in the cour of this rearch further significant and predominant reasons for vehi-cle manufacturers to undertake engine remanufacturing were discovered,such as the curing of spare parts over the
whole car life cycle,as well as market share and brand protection.In-terviewees perceived the motives as the most dominant for engine remanufacturing.
Concluding,product take-back and recovery legislation, such as the ELV Directive,could not be confirmed as a reason for OEM automotive remanufacturing,for the specific ca companies and the product group under investigation (engines).However,it could be a motive for remanufacturing within other industry ctors or for other product groups. Future rearch also needs to further investigate thisfinding for the independent automotive remanufacturing ctor.
4.3.The direct economic motive(profitability of remanufacturing)
Rearch on clod-loop supply chains within operations management rearch has tended to assume that the profitabil-ity of product recovery has been sufficiently explored.In fact, this is not the ca,as Guide et al.[44]confirm.
Within remanufacturing there are veral specific aspects to consider.On the one hand,cores(the ud product)may in-deed be less expensive than a new part.On the other hand, their acquisition incorporates high uncertainties,such as com-petition for cores,high scrap rates or unavailability of older engine’s models.Further critical aspects that influence profit-ability of remanufacturing are disc
usd within this ction.
Due to a take-back network structure that stretches across veral supply chain echelons(retailer,cleaning/sorting r-vice provider,remanufacturing plant and distributor)and the time delays in the return process,the OEM takes a higherfi-nancial risk within core acquisition than a smaller independent player.This is also due to the fact that larger(OEM)engine remanufacturers tend not to asss the quality of the returned product instantly,particularly if the product exchange is con-ducted at the retail level when only a superficial asssment is undertaken.One interviewee confirms the difficulty of core asssment within OEM engine remanufacturing: The quality of returned cores is logically subject to strong variations,ranging from practically unusable to nearly un-damaged.Since a complex quality asssment would be too costly with regard to the vast amount of cores and may also not demonstrate the necessary accuracy,aflat valuation is permitted and has been arranged withfinancial auditors but is also allowed by law.7
Competition for cores further impacts on profitability of OEM remanufacturing.As this rearch has found,there is fierce competition for ud engines,and one can assume this competition leads to an increa of core prices.Several inter-viewees have stated that OEM remanufacturers aim at‘clean-ing the market’so that independents do not have access to cores.
The author therefore assumes that OEM remanufacturers are,compared to independent remanufacturers,less profitable with regard to core acquisition,due to the fact that one of their main motives is the exclusion of independents from access to cores.This also implies that OEMs need to pay higher prices for cores than other players in the market and that they will buy back any core.The factors have an impact on the prof-itability of OEM remanufacturing operations.
Overall,there emed to be a difference between inter-viewees stemming from the independent ctor or with strong links to the independent side of the ctor and interviewees taking and OEM perspective.The general connsus was the fact that remanufacturing operations performed by indepen-dents were more likely to be profitable and/or driven by the motive of profitability than operations undertaken by the Orig-inal Equipment Manufacturers.With regard to OEM remanu-facturing,interviewees have stated:
We hardly make any profit with remanufactured engines.
But why are we so interested in remanufacturing then?
Well,the reason is that we want to be quick.In some cas
a remanufactured engine is the only possibility to provide
a replacement in a short timeframe.8
6Quoted from personal communication(E-Mail)with Thomas Kobudzinski from Department for Public Relations at the Gesamtverband Autoteile-Handel e.V.(German reprentation of interests e independent parts distributors)in Ratingen,Germany,October2003,translated from German.
7Quoted from personal communication(E-Mail)with the Manager for Mar-keting and Sales at Ca Company3,October2003,translated from German. 8Quoted from the interview with the Manager for Customer Process Management at Ca Company2,September2002,translated from German.
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