Evaluating component recycling strategies

Abstract

European environmental legislation aims at inciting manufacturers to close their supply chain by explicitly encouraging the reintegration of used components. Though this approach seems to be “ecologically correct”, the reluctance of several original equipment manufacturers (OEMs) and the low level of diffusion of remanufacturing activities indicate that component recycling does not always economically make sense. The purpose of this paper is twofold: identify critical factors for the success of recovery operations and hereby explaining OEMs’ behavior concerning component recycling strategies. In this context an optimization model is discussed taking into account parameters such as life cycle duration, reverse flow distribution, technical compatibility and customer expectations. Finally, we present two interesting insights gained by the application of the model.