Viability of remanufacturing practice: a strategic decision making framework for Chinese auto-parts companies

Abstract

Remanufacturing is a sustainable and proven profitable practice in the western world.Research on remanufacturing practices is relatively unexploited in China, despite being the "global factory" and both the world's largest automobile manufacturer and vehicle market.The increasing amount of automotive output and End-of-Life vehicles (ELVs) in China provides Chinese auto-parts companies with significant potential for environmentally conscious manufacturing and product recovery. Using case studies, we have investigated the status of remanufacturing practices, key determinants for strategic decision making to remanufacture in-house, outsource remanufacturing and/or not to engage in remanufacturing in Chinese auto parts firms using an analytical hierarchy process (AHP). This study suggests that Chinese firms are keen to adopt remanufacturing practice in-house compared to outsourcing despite a lack of technical and managerial capabilities.Key words: Remanufacturing, automotive, China, strategic decision making, analytical hierarchy process (AHP) INTRODUCTIONThe unprecedented and sometimes wasteful use of the environment as the natural provider of resources and sink for discarded end-of-life/end-of-use products and waste is proving to be unsustainable. There is increasing realization that manufacturing needs to produce more with less and different raw materials, to be ethical and sustainable. Achieving this will require materials wastage to be reduced and production to more closely match demand. This is why manufacturing firms, especially original equipment manufacturers (OEMs) and their suppliers, are under increasing pressure from stakeholders, including regulators, customers and employees to produce ethically, reuse/recycle, remanufacture, and/or to safely discard 3 their waste in accordance with the absorptive and regenerative capacity of the planet (Barker and Zabinsky, 2011).Of the many sustainable strategies, tools and techniques developed over the years aimed at improving productivity and economic longevity of manufacturing businesses, remanufacturing plays an important role. Remanufacturing has resulted in increased profits and market share for manufacturers in Western countries (Jayaraman and Luo, 2007;Giannetti, 2012). Remanufacturing further benefits businesses in terms of cost saving from reduced resource requirements, through assets recovery and reusing/recycling, cost savings from not using landfills, expanded product life cycle, increased employment rate and improved brand image (Sarkis, 2010;Kapetanopoulou and Tagaras, 2011;Zhang, et al., 2011).The automotive industry is one of the leading industries in remanufacturing and product recovery strategy, with 70% of all remanufacturing companies being in the automotive sector (Steinhilper, 2011;Zhang, et al., 2011). Furthermore, of all major products that are being The major motivation for this study is to (i) develop a remanufacturing decision-making framework for the Chinese auto-parts manufacturers' strategic decisions to either engage in the rem...

An examination of drivers and barriers to reducing carbon emissions in China’s manufacturing sector

“…Additionally, studies have empirically demonstrated that CEPs have a direct impact on firms' economic performance and their product redesign capability (Chan and Chan 2008;Lai et al, 2013). However, most of these studies associate or view the benefits from CEPs largely as by-products of external pressures to comply with environmental regulations, peer pressure, green trade barriers, amongst others (Stock, 2002, 2004Abdulrahman et al, 2015). These studies failed to examine how firms could be self-motivated toward CEPs implementation due to its strong attractiveness that outweighs its inherent barriers.…”

Analysis of the critical success factors of automotive engine remanufacturing in India

“…Technological innovation and upgradation are very much required in various steps in remanufacturing process. Abdulrahman et al (2015) developed a strategic decision-making framework for remanufacturing. Xiang and Ming (2011) described how remanufacturing policies like Extended Producer Responsibility (EPR) help in the remanufacturing of automotive parts.…”

“…For this classification, they used Grey Decision making method. Abdulrahman et al (2015) identified the key elements for strategic decision making in remanufacturing. They used AHP method for identification the key elements.…”

The interaction of clusters between manufacturing and producer services in China

“…There exist internal relationships between producer services and manufacturing (Abdulrahman, Subramanian, Chang, & Shu, 2015;Juleff-Tranter, 1996;Liu, Wan, & Zhou, 2014;Peter & Celine, 2009;Sue & Paul, 1994), e.g., logistics services contribute greatly to the development of manufacturing (Liu & Cui, 2009;Prem, Tim, & Brian, 2014), and economic transformation and upgrading require interactive development between them (Kumar, Kar, & Sanjay, 2007;Yang, Liang, & Cai, 2014). Many scholars have examined their interaction through national-level data.…”