Assessing an EEE manufacturer’s economic benefit with remanufacturing

Abstract

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.