Combined analyses of costs, market value and eco-costs in circular business models: eco-efficient value creation in remanufacturing

Abstract

Remanufacturing is recognized as a major circular economy option to recover and upgrade functions from post-use products. However, the inefficiencies associated with operations, mainly due to the uncertainty and variability of material flows and product conditions, undermine the growth of remanufacturing. With the objective of supporting the design and management of more proficient and robust remanufacturing processes, this paper proposes a generic and reconfigurable simulation model of remanufacturing systems. The developed model relies upon a modular framework that enables the user to handle multiple process settings and production control policies, among which token-based policies. Customizable to the characteristics of the process under analysis, this model can support logistics performance evaluation of different production control policies, thus enabling the selection of the optimal policy in specific business contexts. The proposed model is applied to a real remanufacturing environment in order to validate and demonstrate its applicability and benefits in the industrial settings.

A Review and Typology of Circular Economy Business Model Patterns

“…Remanufacturing and refurbishment services allow companies to offer greener products, possibly even at lower prices (Vogtlander et al. ). For instance, furniture company Desko has multiple value propositions depending on how often the product has been remanufactured: the more often the product has been remanufactured, the lower the price (ERN ).…”

“…The overall value creation potential of refurbishment and remanufacturing is based on access to goods and components that can be resold, enhanced reputation as a manufacturer, products with as-new quality (including warranty), a reduction of waste handling costs, and less social externalities. Remanufacturing and refurbishment services allow companies to offer greener products, possibly even at lower prices (Vogtlander et al 2017). For instance, furniture company Desko has multiple value propositions depending on how often the product has been remanufactured: the more often the product has been remanufactured, the lower the price (ERN 2015).…”

“…In this way, different customer types are targeted in each case. In other instances (e.g., engines of cars), the product may be sold at the original price because remanufacturing implies as good as new or even better performance (Vogtlander et al 2017).…”

“…It could be argued that OEMs are in a much better position to implement design for refurbishment and remanufacturing, having the original design specs and being able to optimize their product designs and business models for refurbishment and remanufacturing. Most publications argue that reduced or at least slowed streams of waste to landfills, reduced carbon emissions, and spared natural resources are the most important sustainability contributions of this model (Vogtlander et al 2017). However, others argue that energy use in remanufacturing (and CEBMs more generally) is an oftenforgotten factor (Cooper and Gutowski 2017).…”

Insulation or Smart Temperature Control for Domestic Heating: A Combined Analysis of the Costs, the Eco-Costs, the Customer Perceived Value, and the Rebound Effect of Energy Saving

“…Keeping costs, market value, and eco-costs strictly separate in the analysis has the advantage that the aspects of the production costs and market value are not ignored in the Sustainability 2018, 10, 3231 8 of 24 decision-making process for achieving better environmental sustainability. The system can also be applied to analyse and develop business solutions in the circular economy (e.g., cradle-to-cradle systems) [37,41].…”