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Business Strategies for Competition and Collaboration for Remanufacturing of Production Equipment

  • Genis hf, Siglufjordur, Iceland

Abstract and Figures

Companies and organizations must cope with the challenge of a demanded sustainability. Collaboration and competition represent a promising approach. The objective of this work is to develop strategies for competition and collaboration which enable increased economical benefit while boosting sustainability issues. The research is focused on value creation strategies, competition, collaboration and their impact as drivers for technological progress. Analysis based on scenarios and forecast reports about value creation in the remanufacturing area of production equipment are carried out. The target is to collect and rank criteria for an evaluation of business strategy regarding sustainability. Existing business strategies for industrial value creation are transferred to the field of remanufacturing analyzed as well as characterized regarding the gathered criteria to support sustainable acting between partners in value creation networks for remanufacturing of production equipment. KeywordsCollaboration-competition-strategies-production equipment
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Business Strategies for Competition and Collaboration
for Remanufacturing of Production Equipment
Steffen Heyer1, Pinar Bilge1, Jón Garðar Steingrímsson1, Günther Seliger1.
1Department for Machine Tools and Factory Management, Berlin University of Technology, Germany
Companies and organizations must cope with the challenge of a demanded sustainability. Collaboration and
competition represent a promising approach. The objective of this work is to develop strategies for competition
and collaboration which enable increased economical benefit while boosting sustainability issues. The
research is focused on value creation strategies, competition, collaboration and their impact as drivers for
technological progress. Analysis based on scenarios and forecast reports about value creation in the
remanufacturing area of production equipment are carried out. The target is to collect and rank criteria for an
evaluation of business strategy regarding sustainability. Existing business strategies for industrial value
creation are transferred to the field of remanufacturing analyzed as well as characterized regarding the
gathered criteria to support sustainable acting between partners in value creation networks for
remanufacturing of production equipment.
Collaboration, competition, strategies, production equipment
According to the Organization of United Nations (UNO) the
global population increases by approximately 80 million each
year. By now around 6.9 billion people are living on the planet
and by 2050 this number is expected to be risen to 9.2 billion
[1]. As population grows, the demand for consumer goods
increases, furthermore, the purchasing power of specific
groups within developing countries is growing at high rate.
Consequently, global manufacturing increases, which results
in a conflict between economy and environment regarding the
earth's natural resources. A way out is to introduce periodical
life cycles in which resources, materials, components and
products are manufactured, used, remanufactured, reused
and recycled as seen fitting for each instance. Life cycle
management can be seen as a fundamental part of value
creation dealing with the issue of an increased need for
materials when simultaneously facing dwindling renewable
The challenge for management is to apply chances of
economic competitiveness for environmental goals which is
linked to the concept of sustainability. Sustainable
development is defined by the Brundlandt report of 1987 as
development that meets the needs of the present without
compromising the ability of future generations to meet their
own needs [2]. Sustainability is characterized by the triple-
bottom-line of economy, environment and society [3].
Companies cope with the challenge of a demanded
sustainability. The question arise which business strategies
may promote simultaneously economical, environmental and
social benefits in the market. Collaborative competition
represents a promising approach. That is why the objective is
to address competition and collaboration as drivers for
technological progress to achieve profitability and competitive
advantages. The paper aims to explore existing business
practices for competition and collaboration in relationship with
sustainability between actors in the remanufacturing market.
2.1 Remanufacturing
Remanufacturing focuses on recovering products and parts of
products after a usage phase. Unlike repairing products
solely, remanufacturing not only extends a product life but
also has the goal to bring the product into an “as new state
[4]. Remanufacturing processes include the steps
disassembly, cleaning, inspection, reprocessing, storage,
testing and reassembly. After conducting remanufacturing,
products are reused in another usage phase [5].
In many industries, commercial buyers are more aware about
the quality of remanufactured products than buyers of
consumer goods. Thus, tire manufacturers offer retreaded
tires in their industrial product portfolio but not in their
consumer product portfolio. Even though there is little
difference in the true quality levels between retreaded and
new tires. Bosch Power Tools and Electrolux also follow this
strategy, focusing their remanufacturing efforts on the
products that are typically purchased by professional
contractors [6, 7].
However, remanufacturing has extended to a large number of
consumer goods with short life cycles and relatively low
values. In widely known remanufacturing cases, the
manufacturing is performed by the original producer,
integrating new distribution models, e.g. leasing in the case of
Xerox with toner cartridges. Other remanufacturing practices
are less popular, due to the fact that original equipment
manufacturers (OEMs) are rarely involved. Products are not
sold through regular retail channels established by OEMs [8].
In general, remanufacturing is accepted as a life cycle tool,
but actual application in business of production equipment is
still low.
Figure 1: Development of Business Strategies for the Remanufacturing Market
2.2 Business Strategies
A business strategy “[…] is the direction and scope of an
organization over the long term, which achieves advantage
in a changing environment through its configuration of
resources and competences with the aim of fulfilling
stakeholder expectations.[10]. A business strategy, applied
for a remanufacturing company can be explained in detail
regarding the following elements:
Direction: Long term direction of a remanufacturing
company indicates strategic aims of the organization in
the progress of developing the backwards activities.
Markets and scope: A remanufacturing company of
production equipment acts in the area and market of
manufacturing and/or remanufacturing. Activities of
those companies cover forward and backward activities
in core procurement, production, distribution of
production equipment.
Advantage: Remanufacturing companies that command
a competitive advantage in the market, e.g. access to
cores of old machine tools, are likely to perform more
successful in their business.
Resources: Resources (skills, assets, finance,
relationships, technical competence, and facilities) are
required in order to be able to compete. One of the
biggest challenges for the remanufacturing industry is
finding a way to recycle the production equipment at the
end of a usage phase. Depending on the damage and
the type of machine, remanufacturing activities are to be
adapted to the machine status.
Business Environment: External conditions affect the
businesses ability to compete, e.g. regulations and laws
have to be taken into account when closing the loop of a
life cycle.
Stakeholders: Stakeholders have different values and
expectations. They have power in and around the
remanufacturing business. Companies like Xerox
influence successful growing of the remanufacturing
market directly. Others enterprises, which indirectly
support the growth of the market, focus on collection of
used products.
In the following, the concept for developing business
strategies for remanufacturing is presented. In order to come
up with proper business strategies, exploiting collaboration
to achieve competitive advantages, markets as well as
market players have to be known and taken into account.
The development process is depicted in Figure 1 and carried
out in the following way:
The activities and capabilities of market players are
characterized [8]. Porter’s five-forces-framework is used to
analyze an existing market and possible future markets. Two
future scenarios developed in previous work is analyzed in
order to identify all sources of competition within the
remanufacturing market [11, 12].
Generic goals of collaborative competition can be pursued in
order to achieve advantages in competition. The goals are
prioritized for each market player in order to come up with
individual goal-sets. The goal-sets are linked with the
general sources of competition from three scenarios to set
basic direction for the business strategies. The three
scenarios are the current market scenario and two future
scenarios (see Section 6.2 for further details of future
Market players primarily vary in their business models. A
business model can be defined as architecture for the
product, service and information flows laying out the
“underlying principles of how a company creates, captures,
and delivers value” [13, 14].
The list below depicts the directly and indirectly involved
companies in the remanufacturing market, however since
the remanufacturing activities, e.g. reuse, repair,
remanufacture, refurbish or retrofitting of production
equipment, is mainly carried out by few players: OEM,
subcontractor, independent company and VE, more detailed
description will be provided for them:
The customers: Companies that use remanufactured
production equipment. Remanufactured goods can
reduce their capital investment expenditures.
Many OEMs in the automotive industry depend heavily
on their subcontractors in order to decrease production
costs, increase production flexibility and ensure that
specific expertise are developed [9]. Some OEMs and
their subcontractors use also a remanufacturing process
as a business strategy to increase profits. The OEMs
bare all the production costs and liability for equipment
integrity and value, maintaining a continuous chain of
custody over a product throughout the entire production
process. Typically contracted remanufacturing
companies (the subcontractors) have no ownership
rights over materials, instead operating within an OEM
facility and utilizing equipment and intellectual property
provided by the OEM.
The OEM stakeholders which see greater growth and
stability potentials in their investments.
The independent companies are manufacturers of
specialized equipment used in the remanufacturing
process, such as optical gauges, cleaning and test
equipment. These companies are independently
operated businesses that purchase machines from
former end users or machine brokers, remanufacture
them and resell the recovered product afterwards.
Information technology (IT) based providers such as
virtual enterprises (VE) create specific IT
infrastructures to carry out remanufacturing and
distribution activities. Virtual remanufacturing is a new
form which is proposed for the adaptation to different
markets and environmental aspects.
The management consultants assist new-condition
product manufacturers on how to incorporate
remanufacturing into their business portfolio.
The design engineers develop and design tools for the
remanufacturing processes like disassembly.
The investors provide the capital investment needed to
enter the remanufacturing market.
The logistics service providers enable a large
increase in reverse logistics activities.
Each class of company has its particular characteristics and
goals. The primacy of certain demands, e.g. responsiveness
to customer requests and tying existing customers to a
product, can be seen as a clear indication of a feature’s role
in the class of company.
Competitive success can be gained by setting goals for
competition based on the organization’s business drivers
and by understanding the five forces of competition.
Business drivers are internal and external conditions that
provoke and shape organizations towards specific forms.
Organizations with similar strategic characteristics form
strategic groups. Common for these groups are the
strategies that they follow and the way that they compete.
Comparing one’s organization to others can be useful to gain
insight in who are currently the biggest rivals and who are
most suitable for cooperation. According to Johnson an
organization can be classified by the following characteristics
The extent of product and/or service diversity is a
strategy to respond to internal and external changes and
opportunities or simply to increase market power.
The extent of geographical coverage is a strategy that
represents the geographical widespread of an
organization, refers to local, regional, international and
The number of market segments served refers to
difference in customers. The characteristics for people
are: difference in lifestyle, interest or taste, paying
capability, age, race, family size, location and life cycle
stage. The characteristics for organizations are:
difference in industry section, location, size, technology,
profitability and management.
The distribution channels used are the paths through
which products and services flow from businesses to
consumers and to other businesses: trucks, trains,
airplanes, freighters, warehouses and retailers.
The extent of branding refers to the promotional
activities on specific product and/or services in order to
create a uniqueness perception by the consumer with a
specific brand.
The marketing effort refers to advertising spread and
size of sales forces. It reflects the efforts spent in
branding, number of market segments and product
and/or service diversity.
The extent of vertical integration refers to the degree
to which a firm owns its upstream suppliers and
downstream buyers.
The product and/or service quality is the ability to fulfill
the customer’s needs and expectations.
The technological leadership refers to whether an
organization is a technical leader or follower. Influential
factors are core competencies of staff, products,
processes, programs and knowledge based on
cooperation, learning and innovation of the company
within the network. This network consists of clients,
partners, suppliers, researchers and academia [15].
The size of the organization is measured in the number
of employees, turnover, annual balance sheet or in
accordance with the micro, small and medium-sized
enterprises (SMEs) classification by the European
Commission [16].
The five forces in markets depicts that rivalry amongst
existing firm (the centerpiece) is propelled by buyers and
sellers. These have bargaining powers for prices, substitutes
and potential entrants that represent replacement threats
[10]. The five forces are directly or indirectly affected by
external factors such as market drivers.
Market drivers are “[…] factors driving growth, or more
specially driving revenues, in an industry” which involve the
following [17]:
Economic market drivers: Typically, high costs are a
strong driver for every organization. Costs such as for
waste disposal can act as a positive incentive for
material to be reallocated within the supply chain
following the equipment's traditional life cycle.
Legal market drivers: Motivate market allocations to
shift toward acting consistent with regulatory
requirements. Regulations aimed at controlling the
disposal of waste, restriction of the use of certain
hazardous substances, and take-back regulation.
Social market drivers: They can both support and
undermine the market performance of a product. The
public is insufficiently aware of the operative meaning of
existing labeling terminology including remanufacturing,
refurbishing, recondition, cannibalization, and recycling.
The market drivers are subject to change, such as in taste,
in values, in costs for raw materials and how the legal
framework is made up. Responsiveness to the changes can
be very beneficial to an organization.
6.1 Current Remanufacturing Market
Nowadays many different OEMs, subcontractors,
independent and virtual remanufacturers are engaged in the
remanufacturing business. Whether a manufacturing
company should start to remanufacture or not depends on
the structure of the existing as well as forecasted market. It
is important to distinguish between independent companies
that are only engaged in the remanufacturing business and
those that also manufacture original products or components
which are OEM and subcontractors. For the production
planning and control (PPC) of the second type, it is most of
all the high level and variety of uncertainties in return stream
that require modifications in the PPC systems [18].
In another case, OEMs sell their production facilities to
contracted remanufacturers. The subcontractors achieve
high capacity utilization through pooling and supplying many
different OEMs. The OEMs focus on innovation in research
and development, product design, and marketing. It may
result in underinvestment or overinvestment in innovation
and capacity, but increases profitability. Further research
could examine how this change in industry structure affects
investments, and thus profitability [19].
Remanufacturing of production equipment varies in the
extent of the remanufacturing activities. Ranging from
repairs, where obviously broken parts are replaced to a more
extensive remanufacturing and the production equipment is
stripped down to the machine bed. Parts and components
are then recovered or replaced with the objective to bring the
remanufactured production equipment up to a standard that
meets or exceeds new equipment [20].
Further impacting factors for the remanufacturing markets
are discussed in Section 6.2 (based on prior research),
additionally the following two should be considered:
Usage of product-service systems (PSSs) and
maintenance, repair and overhaul (MRO) services: In a
successful PSS the intangible service augments the tangible
product, better fulfilling customer needs. PSS can be seen
as means to improve competitiveness and sustainability of a
product. MRO services are aimed at the integration of
maintenance, repairs and overhaul in order to minimize
costs and down time of equipment. MRO services are very
useful when applied with use-oriented PSS, since they drive
initial costs down for the customers and the lifetime of the
equipment is likelier to be prolonged.
Collaborative engineering: An interactive process of
working together in order to overcome the complexities in
products and organizations. The increased technical
complexity set forth by the objective of remanufacturing has
to be tackled with effective communication and coordination
between stakeholders. Knowledge gained by the
remanufacturing activities is handed back into the product
design to make the remanufacturing process more efficient
[20, 21].
6.2 Possible Futures of the Remanufacturing Market
Two scenarios for possible future markets for production
equipment could be identified, using scenario analysis. One
consistent future could be that there will be “a paradigm
change for sustainable manufacturing (referred hereinafter
as S1), where sustainable development is given a high
priority and governmental actions in the form of end-of-life
laws in terms of sectoral rules are enforces. High priority is
promoted towards the public in order to increase the
awareness for the importance of sustainability. As
awareness is raised, remanufactured production equipment
is more accepted and demand increases. A market with
many competing organizations of different shapes and sizes
is created. In the other consistent future remanufacturing
scenario will “consist of still only a hidden giant” (referred
hereinafter as S2), where sustainable development is not
promoted and the remanufacturing industry is not stimulated
in any way. The remanufacturing processes are handled by
few companies or the OEMs themselves [11].
From the scenario analysis the following ten key factors for
the possible future market were generated:
1. End-of-Life laws enforce a manufacturer’s responsibility
regarding products and their end-of-life treatment, also
referred to as take-back regulation. Take-back regulation
encourage remanufacturing since the alternative is to
pay for disposal or sell as scrap metal [22]. S1 projects
that sectoral rule will be established and manufacturers
will be made responsible for the end-of-life treatment. S2
projects that no laws will be established; therefore limited
external pressure will exist.
2. Sustainable development: Promotion activities of
governmental, national or federal bodies include
marketing campaigns and incentives that encourage
purchasing of remanufactured goods. The aim is thereby
to improve societal behavior and attitudes in terms of a
targeted search for products and services that exemplify
environmentally friendly practices. S1 projects that
marketing activities, such as environmental education
and green labeling will be undertaken by public bodies.
S2 projects that no promotional activities will be
3. Qualification demonstrates skills and knowledge of
employees regarding technical standards and quality
criteria of remanufacturing companies. S1 projects that
special trainings and informal education will be required
and enforced by public and private stakeholders. S2
projects that no focus will be on trainings for
remanufacturing processes.
4. Demand for (re)manufactured machine tools and
assembly equipment: Market volume of
remanufactured and reused machines compared to the
total remanufacturing market, as well as the shares of
most valuable machines. S1 projects that demand
increases due to improved quality of remanufactured
equipment and components. New standards will be
enforced with proper certification to ensure that
remanufactured products will be equivalent to new
products. S2 projects no change in demand.
5. Product development covers the route taken regarding
the development of the product and services and
includes design decisions that influence product life
cycles and functional lifetime. S1 projects that a PSS will
be the most significant product development, having a
possible eco-efficiency increase by remanufacturing. S2
projects that rapid technological change will be most
distinctive for the remanufacturing market.
6. Reusability indicates the ability of parts and fittings to
be disassembled, inspected, cleaned and repaired for
reuse. S1 projects that there will be an increasing
reusability of the product itself. Interest of the
manufacturing companies in remanufacturing systems
intensifies. Demand increases, diversifies and model
change will rise. S2 projects that there will be increasing
reusability of components through monitoring. Relevant
product and process data will be monitored throughout
the product’s functional lifetime, by means of prediction
systems for maintenance.
7. Users of (re)manufactured machine tools and
assembly equipment: This factor describes the
interests of users in remanufactured tools and
equipment. Both S1 and S2 project that customer will
primarily lease production equipment, reinforcing PSS-
oriented strategies as an important business strategy.
8. Strategies of manufacturers of machine tools and
assembly equipment: This factor depicts the direction
that the major market players follow regarding which
entity is responsible for the remanufacturing of the
product. S1 projects that the OEMs will handle
remanufacturing themselves. S2 projects that the OEMs
will accept lower profit margin, manage the
remanufacturing of their parts and control the prices of
remanufactured parts.
9. Providers/owners of machine tools and assembly
equipment: This factor describes the interests of
providers/owners to offer or request products and/or
services such as PSSs. Both S1 and S2 project that the
remanufacturing activities will be kept within the owner or
supplier companies.
10. Associations for remanufacturing: The impact that
associations have upon the remanufacturing market.
Associations can foster special training programs and
fund technical reports, organize public relations efforts
for the industry, and participate in lobbying activities in
regional and federal levels. S1 projects that associations
will have high impact on decision making, causing an
increase in demand of production equipment by
reduction of technological gap and environmental
impacts. S2 projects that associations will have medium
impact on decision making, causing an increase in
demand of production equipment due to increased
quality of products and service.
As organizations have limitations on their available
resources (workers, processes, equipment and raw
materials), they cannot serve all customers at once. A good
tactic is to do customer market segmentation in order to
understand the specific needs of the customers, who share
similar purchase criteria. Then the organizations can align
their product offerings with their preferred marketing
segments, focusing efforts on integrating them better as
As an instantiation, independent company and subcontractor
were selected to indicate where the goals for collaborative
competition in production systems of mass production and
craft production can be located.
Craft production can be seen as fulfilling the requirements of
niece markets, where there is a very high degree of
personalization. Mass production is seen as the production
of standard goods of negligible variety with expected
tolerances for defects, for lowest possible cost in large
The independent companies were selected since they are a
common form of entrant threats to OEMs and the
subcontractors since they symbolize a dependency role that
can be exploited more strategically.
Hormozi identified capabilities for the production systems
used in the comparison and quantified them from low to high
depending [23]. These values are considered to be the
perceived values of the market and compared to values
assigned to the independent company and the
subcontractor. The factors are following:
Emphasis on elimination of production waste: By
focusing on the elimination of waste, the organization
produces more value and is therefore more efficient in doing
the remanufacturing task. In terms of remanufacturing this
would be having a good knowledge of the current status of
the part to be remanufactured in order not to have to perform
unnecessary or unwanted process steps.
Degree of product leveling shows the extent that the
organization takes to ensure that parts, components or
machines are remanufactured in order to meet specific
customer demand or to utilize the usage of tools and
machinery required for the remanufacturing process.
Degree of organizational communication indicates how
quick and efficient intra-organization communication is. Low
level signals a functional silo setup within the organization,
while a high one implies more willingness to aid each other
within the organization.
Degree of cooperation between organizations displays to
what extent does an organization compare itself and/or
share knowledge with other organizations, whether it is
competitors, associations or even governmental committees.
Degree of cooperation between organization and
customer indicates how quick and efficient cooperation
between organization and customer is. High degree shows
that the customer is highly involved in the design.
Sensitivity to customer demands: A high sensitivity to
customer demands implies that the customer could be on
the border of a specific market segment or that the market
segment provided with products and services is narrow.
Need for skilled employees: As the remanufacturing
activities required differ, the skill sets required differ as well.
The higher the levels of customization are the higher levels
of skills are required.
Level of automation signifies the level of automation of a
process or systems required during remanufacturing activity.
Relying on mostly on hand tools represents a low level of
automation, while computerized numerical control (CNC)
processing would be a higher level of automation.
Degree of flexibility represents the willingness to make
changes to product as per customer demand. This includes
accommodating changes to the existing parts being
remanufactured also to adding of new functionalities.
Figure 2: Value Curve for Independent Company and Subcontractor
Satisfaction with product and services received
describes how well the organization manages to meet the
customer expectation. The customer expectation is driven by
the standard practice within a specific market segment
regarding technical aspects of products such as defects,
lifetime and performance. Aesthetics and ease of use also
play an important role in customer expectation.
Difficulty level to accommodate changes (volume,
product or process design) indicates how hard it is to
implement the changes according to customer demand. As
the structure of the organization is more complex the harder
it is to accommodate changes, as it is highly affected by the
number of different departments and different people
Degree of product marketing required shows to what
extent does the organization has to go for marketing their
services or products.
Information and communication technology (ICT)
dependency presents the dependency towards ICT. Some
remanufacturing activities require more intuition than written
procedures to perform, due to the nature of part condition at
end-of-life and therefore low ICT dependency. On the other
hand in order to improve initial design or to be able to handle
complex process steps at quick pace the ICT dependency
Figure 2 presents value curve comparison and it shows that
independent companies are better suited for craft production
than subcontractors. Neither of them is really suited for mass
production, but both of them could collaborate in order to be
better capable to offering a larger variety of products and
services. The assumption is made that the current
remanufacturing of production equipment is best described
by a craft production system.
As the markets change the production system best suited to
serve these markets change as well. The automotive
industry is a good example, automotives were first produced
with a craft production system, which then changed to a
mass production system and is today considered to be best
served with lean production systems or mass customization.
It is therefore vital for organizations to understand that if the
market segments change they might have to change as well.
Competition can sometimes be seen as traditional approach
to achieve competitive advantage. However that advantage
can also be achieved by forming inter-organizational
alliances. In general, thus alliances between potential
competitors, buyers and sellers are likely to be
advantageous, e.g. when the combined costs of purchase
and buying transactions are lower through collaboration than
the cost of operating alone [9, 24]. The intensity of alliances
between different companies as well as within one company
can vary, e.g. by communication and share of resources.
The intensity increases between the layers competition,
networking, negotiating, coordination, cooperation and
collaboration, where collaboration represents the most
intensive form [18].
Forming alliances with other companies or organizations is
done to achieve specific goals. The following presents the
clustered goals with examples regarding remanufacturing
Increase selling power: Remanufacturers might build
close links with customers to coordinate remanufacturing
activities regarding customer demands, reduce stock or
generate reputation.
Increase buying power: When offering remanufactured
products, cores and knowledge represent the primary
Build barriers to entry or avoid substitution: Faced
with threatened entry, organizations in an industry may
collaborate to invest in research or marketing. OEMs are
able to sell new machine tools while taking back used
ones, limiting independent activities.
Gain entry: Organizations seeking to develop beyond
their traditional boundaries may need to collaborate with
others to gain entry into new arenas. Working with
locals, production equipment can be adapted to specific
need of local markets.
Share work with customers: An important trend is a
move towards more co-production with customers.
Remanufacturing provides the possibility to include used
equipment from customers, in order to reduce material
Competition and collaboration are both possibilities to
achieve profitability and competitive advantages. For
different market players with different characteristics
individual business strategies are promising. This paper
presented an approach to develop such business strategies
for the remanufacturing market. The four generic market
players are described as well. The following work will focus
on working their goal-sets for collaborative competition which
can be achieved by individual business strategies.
The results are part of the ongoing research project
“Remanufacturing oriented Production Equipment
Development". Its goal is to boost remanufacturing of
production equipment in an economical as well as
technological way. The project is funded by the German
Research Foundation DFG. We extend our sincere thanks to
Hayden Forrister from the Institute for Sustainable Practice,
David Lipscomb University, USA for his valuable
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... Businesses face difficulties in achieving the sustainability they desire. Collaborating in this context represents a promising approach (Steingrímsson, Bilge, Heyer & Seliger, 2011). Strategic collaboration can be in the form of an authorization agreement, combined marketing efforts, forming a consortium, combining resources for the joint venture, and finally merging and purchasing (Akgemci, 2019). ...
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Covid-19 pandemic continues to show its effects on the whole world, especially on health, economic, social, cultural, and environmental. After the effects of this pandemic on human life and health, the most important effect has been on the economy and businesses. Businesses have been caught unprepared for this pandemic in which external factors are effective. However, businesses continue to struggle to reduce the negative effects of the pandemic, to survive, and to compete. In the face of crisis-inducing events such as a pandemic, businesses need to act quickly and follow new methods and strategies instead of traditional methods. One of these strategies is for businesses to act together, that is, to collaborate. Considering the Covid-19 pandemic in terms of strategic collaboration, obtaining support from public institutions, collaboration through purchasing, joint venture, delaying some joint investments, joint production upon increasing demand (health and protective equipment, increased food demand, etc.), resources, and capabilities. It is seen that strategies such as sharing come to the fore. In addition, the general lessons and proactive approaches that should be taken from this pandemic should be clearly stated. The Covid-19 pandemic has also shown the need for a collaborative culture for industry and businesses. In extraordinary situations such as this pandemic, businesses should cooperate at an optimal level with both their suppliers, their sectors, and their customers. Other studies, including sectoral evaluations in this area, will guide both the literature and the practitioners.
... However, many works have identified that the extension of the product life can also be achieved by using the remanufacturing process, which is also a value recovery option in order to extend industrial equipment's original lifespan (Chari et al. (2014)). In the work conducted by SteingrímssonPinar et al. (2011), the authors have introduced competitive business approaches regarding the remanufacturing market of production equipment. In a similar work, Cunha et al. (2011) have established a technology roadmapping methodology so as to portray the interconnections between market, equipment, and technology variables in the remanufacturing process. ...
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Refurbishment and remanufacturing are the industrial processes whereby used products or parts that constitute the product are restored. Remanufacturing is the process of restoring the functionality of the product or a part of it to “as-new” quality, whereas refurbishment is the process of restoring the product itself or part of it to “like-new” quality, without being as thorough as remanufacturing. Within this context, the EU-funded project RECLAIM presents a new idea on refurbishment and remanufacturing based on big data analytics, machine learning, predictive analytics, and optimization models using deep learning techniques and digital twin models with the aim of enabling the stakeholders to make informed decisions about whether to remanufacture, upgrade, or repair heavy machinery that is toward its end-of-life. The RECLAIM project additionally provides novel strategies and technologies that enable the reuse of industrial equipment in old, renewed, and new factories, with the goal of saving valuable resources by recycling equipment and using them in a different application, instead of discarding them after use. For instance, RECLAIM provides a simulation engine using digital twin in order to predict maintenance needs and potential faults of large industrial equipment. This simulation engine keeps the virtual twins available to store all available information during the lifetime of a machine, such as maintenance operations, and this information can be used to perform an economic estimation of the machine's refurbishment costs. The RECLAIM project envisages developing new technologies and strategies aligned with the circular economy and in support of a new model for the management of large industrial equipment that approaches the end of its design life. This model aims to reduce substantially the opportunity cost of retaining strategies (both moneywise and resourcewise) by allowing relatively old equipment that faces the prospect of decommissioning to reclaim its functionalities and role in the overall production system.
... Practitioners and researchers have contributed in different ways to this field. Indeed, Steingrímsson et al. (2011) proposed an approach to develop business strategies for competition and collaboration in the remanufacturing market of production equipment, while considering different market players having different characteristics. Cunha et al. (2011) established a technology road mapping technique to show the interrelations between market, equipment and technology parameters. ...
Remanufacturing an equipment before the end of its life may generate substantial profits for both the user and the remanufacturer. However, the equipment operating conditions as well as the quality of maintenance actions undergone throughout the life of equipment largely affect the total life cycle costs from the user's perspective, and the quality of the recovered equipment from the remanufacturer's perspective. This research aims at investigating the remanufacturing opportunities of production equipment from the user's perspective, used to produce a single product in order to meet deterministic and dynamic demands over a finite horizon. Preventive maintenance actions on equipment are assumed to be imperfect. Indeed, when performed, these actions can improve the equipment to reach a state between the "As-good-as-new" level and the "As-bad-as-old" level. It is assumed that the stakeholders (the equipment's user and the original equipment manufacturer-remanufacturer) are interested by all remanufacturing opportunities. The objective of the present work is to develop an integrated approach to jointly optimize the production plan, the remanufacturing plan and the quality of spare parts used in each remanufacturing action. In order to minimize the total cost during the production horizon, a mixed-integer nonlinear program is developed. The optimization problem is solved using a hybrid genetic algorithm based on a fix-and-relax heuristic. A numerical experiment and a sensitivity analysis are presented to illustrate the applicability of the proposed approach.
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Green and sustainable engineering business models have become a major topic across industries due to concerns regarding environmental issues and the decline of natural resources. Remanufacturing is showing promise as a preferable solution in terms of environmental, societal, and economic factors compared to alternatives such as repairing, reconditioning, and recycling. By considering the nature of the closed cycle loop system, this paper proposes the idea of a transitional agenda into remanufacturing. However, different countries should employ different approaches to such a transition in order to appropriately account for and integrate diverse stakeholders, perspectives, and preferences. Therefore, the main objective of this study is to evaluate prioritized elements and sub-elements in the development of a transitional decision-making framework (TDMF) in the Malaysian automotive industry by applying the analytical hierarchy process (AHP). Aggregation of individual and group judgement is done for prioritised elements and their sub-elements, which are then ranked accordingly using element weights based on the acceptance of individual and group consistency index values.
Remanufacturing represents a higher form of reuse by focusing on value‐added recovery, rather than materials recovery (i.e., recycling). Remanufacturing systems are widespread in the United States and are profitable. However, the management of production planning and control activities can differ greatly from management activities in traditional manufacturing. We report on managerial remanufacturing practices via a survey of production planning and control activities at remanufacturing firms in the United States. Production planning and control activities are more complex for remanufacturing firms due to uncertainties from stochastic product returns, imbalances in return and demand rates, and the unknown condition of returned products. We identify and discuss seven complicating characteristics that require significant changes in production planning and control activities. We also describe the research opportunities that exist for each of the complicating characteristics.
Collaborative Engineering: Theory and Practice offers insights into the methods and techniques involved in implementing a systematic approach to the integrated, concurrent design of products and related processes, including manufacturing, product service and support. The approach discussed here will help developers consider all elements of the product life cycle from conception through disposal, including quality, cost, schedule, and user requirements. Drawing upon years of practical experience and the collective knowledge of a distinguished list of contributors, Ali Kamrani and Emad Abouel Nasr, provide a state-of-the-art discussion on collaborative engineering and discuss the following: Requirements for an open and collaborative manufacturing environment and the tools and techniques needed Template-based integrated product development cycles Six Sigma as a methodology to manage quality control within a given production cycle Supply Chain Workflow Modeling CAD, CIM and Rapid manufacturing Simulation based optimization techniques Manufacturing complexity analysis Collaborative Engineering: Theory and Practice is a must have book for industrial engineers in both industry and academia who specialize in product development and supply chain management. © 2008 Springer Science+Business Media, LLC. All rights reserved.
Agile manufacturing means the production of highly customized products and quick response to customer demands without the associated higher costs, through the efficient use of flexible, programmable machinery, and reconfigurable products. Management of agile enterprises needs to quickly respond to market opportunities through cooperation with suppliers or even competitors or through the formation of virtual enterprises. The workforce in an agile enterprise needs to be highly skilled, educated, innovative, and willing to take on any challenge. The specific components for successful implementation are described.
Michael Porter presents a comprehensive structural framework and analytical techniques to help a firm to analyze its industry and evolution, understand its competitors and its own position, and translate this understanding into a competitive strategy to allow the firm to compete more effectively to strengthen its market position. The introduction reviews a classic approach to strategy formulation, one that comprises a combination of ends and means (policies), factors that limit what a company can accomplish, tests of consistency, and an approach for developing competitive strategy. A competitive strategy articulates a firm's goals, how it will compete, and its policies for achieving those goals. Competitive advantage is defined in terms of cost and differentiation while linking it to profitability. Part I, "General Analytical Techniques," provides a general framework for analyzing the structure of an industry and understanding the underlying forces of competition (and hence profitability). Five competitive forces act on an industry: (1) threat of new entrants, (2) intensity of rivalry among existing firms, (3) threat of substitute products or services, (4) bargaining power of buyers, and (5) bargaining power of suppliers. Looking at industry structure provides a way to consider how value is created and divided among existing and potential industry participants. One competitive force always captures essential issues in the division of value.There are three generic competitive strategies for coping with the five competitive forces: (1) overall cost leadership, (2) differentiation, and (3) focus. There are risks with each strategy. A firm without a strategy is "stuck in the middle." This framework for examining competition transcends particular industry, technology, or management theories. Building on this framework, techniques are presented for industry forecasting, analysis of competitors, predicting their behavior, and building a response profile. Essential for a competitive strategy are techniques for recognizing and accurately reading market signals. Implications of structural analysis for buyer selection and purchasing strategy are presented. Game theory provides concepts for responding to competitive moves. Using the concept of strategic groups, structural analysis can also explain differences in firm performance (profitability), provide a guide for competitive strategy, and predict industry evolution. Part II, "Generic Industry Environments," shows how firms can use the analytical framework to develop a competitive strategy in industry environments, which reflect differences in industry concentration, state of industry maturity, and exposure to international competition. These environments determine a business's competitive strategic context, available alternatives, and common strategic errors. Five generic industry environments are examined: fragmented industries (where level of industrial concentration is low), emerging industries, transition to industry maturity, declining industries, and global industries. In each, the crucial aspects of industry structure, key strategic issues, characteristic strategic alternatives (including divestment), and strategic pitfalls are identified. Part III, "Strategic Decisions," draws on the analytical framework to examine important types of strategic decisions confronting firms that compete in a single industry: vertical integration, major capacity expansion, and new business entry. Additional use of economic theory and administrative consideration of management and motivation helps a company to make key decisions, and gives insight into how competitors, customers, suppliers, and potential entrants might make them. Appendix A discusses use of techniques for portfolio analysis applied to competitor analysis. Appendix B provides approaches to conducting an industry study, including sources of field and published dat
Agile manufacturing is a new and revolutionary way of manufacturing and assembling products. It is the next logical step in the evolutionary chain of manufacturing technologies, following on the heels of its predecessors, craft production, mass production, and lean production. This paper explains what agile manufacturing is, and what needs to be done to successfully pave the way for its implementation. Successful implementation requires changes in five areas: government regulation, business cooperation, information technology, reengineering, and employee flexibility. The potential benefits of successfully implementing agile manufacturing are much too great for an organization to overlook, as are the potential consequences of failing to implement it. Though many organizations have made strides toward implementing agile manufacturing, there is much work that needs to be done. Corporations need the backing of strong infrastructure to make agile manufacturing successful. This will require cooperation between government and business.