Publications

Journal Article

The circular economy is often presented as a solution for companies to increase the sustainability of their business. In many situations where suppliers produce subassemblies or modules for OEMs in a B2B context, dependency on their clients limits their options for profitable closed-loop supply chains.

In this paper, the authors develop a simple tool suppliers can use to quickly assess whether remanufacturing is economic and environmentally attractive compared to producing new components.They derive optimal acquisition and reuse quantities that minimise total costs. Based on the their analysis with a supplier in the automotive industry, the authors find that used core prices and remanufacturing yield rates have a large impact while an optimised design for remanufacturing can only marginally improve the situation.

The tool is applicable to a wide variety of suppliers and industries that remanufacture their modules or subassemblies, or are exploring the option to engage in remanufacturing operations.