Hidden potentials in open-loop supply chains for remanufacturing

Abstract

Purpose The circular economy grows in popularity in sustainability-oriented environments. Remanufacturing contributes to circularity though it faces challenges regarding reverse supply chains (SCs). Literature focusses on closed-loop supply chains (CLSCs) for reverse flows of products. However, alternative SCs and different market actors provide used components (cores) for remanufacturing through “open-loops”. The purpose of this paper is to investigate the influence of independent actors on core supply and how especially middlemen implement supplier relationship management to address supply shortages in automotive remanufacturing. Design/methodology/approach The study follows a qualitative research approach to compare remanufacturing SCs in Europe and North America. The analysis aims to identify managerial leverage to reduce supply shortages. Findings Reduction of information asymmetries and transaction costs is crucial for “open-loop supply chains” to compete with more integrated CLSCs. The study identifies an e-procurement solution that addresses these issues and helps to increase the supply through “open-loops”. Furthermore, regulation may hinder or facilitate supply. Research limitations/implications It needs to be further investigated to what extent e-procurement and supplier relationship management can reduce shortages. Middlemen who can collaborate with the research would provide further research opportunities. Practical implications If supplier relationship management adapts to the requirements of remanufacturing, it can increase the supply potential through “open-loop” SCs. The e-procurement solution could serve SCs beyond automotive remanufacturing. Policy makers need to revise legislation hindering these SCs. Originality/value The study provides novel findings regarding independent actors, their supplier relationship management and their potential to reduce shortages in independent SCs for remanufacturing.

The Circular Economy and Sustainability: A Systematic Literature Review

“…Consumers must also participate; for the CE to be sustainable, they must not only return the products after use, but also buy the products that have been remanufactured (Hazen et al, 2017). Kalverkamp (2018) considered remanufacturing in relation to the circular flow of products using used components or reverse logistics in the automotive industry. The main obstacles to the use of used components are correct identification, the probability that they are illegal, and the large number of suppliers.…”

“…Electronic procurement is suggested as a remedy, because this can improve component availability, save time, lower transaction costs, and make remanufacturers more competitive. The potential for improved relationships with suppliers in the circular supply chain is also apparent (Kalverkamp, 2018;Kalverkamp and Raabe, 2018). Government and economic stability, environmental sustainability, and the availability of raw materials all impact the remanufacturing sector (Mishra et al, 2019).…”

Circular Economy and Innovation: A Systematic Literature Review

“…On the other hand, Kalverkamp (2018) analysed remanufacturing concerning the circular flow of products through used components or reverse logistics in the automotive industry. Several obstacles were found, the solution for which is proposed to be e-procurement.…”

A novel hybrid network optimization model for printed circuit boards recycling: a circular economy perspective

“…In this context, two different production approaches were discussed, and the selected production processes were compared using the Monte-Carlo simulation method. Kalverkamp (2018) stated that the circular economy had gained importance in terms of sustainability, and it contributes to the achievement of circularity even though some difficulties are experienced in supply chains as opposed to the case of reproduction. In this scope, the author used a qualitative research approach to investigate the effects of independent actors in the automotive supply chain on basic supply and how these apply supplier relations management for eliminating supply shortcomings in automotive reproduction.…”