Manufacturer-remanufacturing vs supplier-remanufacturing in a closed-loop supply chain

TLDR

Remanufacturing at the component level can be performed by either a manufacturer or a supplier. The study compares manufacturer‑ and supplier‑remanufacturing performance in a decentralized closed‑loop supply chain from multiple stakeholder viewpoints. The authors model a decentralized closed‑loop supply chain and evaluate remanufacturing strategies using stakeholder‑centric performance metrics. Results show that when remanufacturing costs are high, manufacturers and consumers favor manufacturer‑remanufacturing while suppliers and the environment favor supplier‑remanufacturing; otherwise, all parties prefer supplier‑remanufacturing, with the environment’s preference depending on the environmental discount, and a roadmap is provided to guide remanufacturing development.

Abstract

Remanufacturing at the component level could be performed by either a manufacturer or a supplier. In this paper, we analyze the performance of manufacturer-remanufacturing and supplier-remanufacturing in a decentralized closed-loop supply chain, and examine their desirability from different stakeholder perspectives. We find that the manufacturer may engage in remanufacturing of used components even if remanufacturing is costlier than traditional manufacturing; given remanufacturing is costlier, the manufacturer may forgo remanufacturing due to a marginal increase in consumer willingness-to-pay for the remanufactured product. If the unit remanufacturing cost is high enough, the manufacturer and consumers prefer manufacturer-remanufacturing, while the supplier and the environment prefer supplier-remanufacturing; otherwise, the manufacturer, the supplier, and consumers prefer supplier-remanufacturing, while the environment׳s preference is contingent on the environmental impact discount for the remanufactured product. Finally, the key findings are distilled into a roadmap to guide the development of remanufacturing.