Drivers and Barriers of Mobile Phone Remanufacturing Business in Indonesia: Perspectives of Retailers

Remanufacturing is deemed to be effective in reducing WEEE. Existing studies on remanufacturing mostly focus on operational issues, product acquisition, and pricing. However, some doubts about remanufacturing business arise in developing countries, where there is less regulation on remanufacturing and less environmental awareness. This study aims to investigate the prospects of remanufacturing business from the retailers' perspectives through in-depth interviews on three retailers in Surabaya, Indonesia. The main drivers for mobile phone remanufacturing business are its affordable and competitive price, big demand for popular mobile phones and high-end mobile phone, the opportunity for specification upgrade, and its suitability with the needs of Indonesian people. The main barriers for remanufacturing business are the possibility for cannibalizing new mobile phones' market share, the uncertainty of core supply, discontinuity of replacement part supply, lack of product knowledge among consumers and retailers, hesitation of retailers to sell remanufactured products, and lack of strict and clear regulations about remanufacturing business. Findings of this study provide insights to prospective mobile phone remanufacturers of what needs to be tackled to start a prosperous business. On the theoretical side, it provides complementary knowledge to existing studies that have been conducted mostly on countries that have higher environmental awareness

Sustainable decisions on product upgrade confrontations with remanufacturing operations

In recent decades, remanufacturing is perceived to be an environmentally friendly option due to the reduced consumption of materials, energy etc. It should be noted that whether the remanufacturing operations are undertaken by the original equipment manufacturers (OEMs) or outsourced to the remanufacturers, given the size and the growth of remanufactured products, many OEMs intend to fend off the potential cannibalization of new products sales through differentiating their quality levels from those of remanufactured ones by launching upgraded versions. To understand whether and how the product upgrading strategy impacts on optimal outcomes in the context of the remanufacturing operations undertaken by OEMs or third-party remanufacturers (TPRs), in this paper, we develop two models that highlight the OEM’s product upgrading strategy under the scenarios where (1) the OEM owns its remanufacturing operations in-house (Model O) or (2) remanufacturing operations are undertaken by a TPR (Model T). Among other results, we find that, from an economic performance perspective, it is more beneficial for the OEM to perform remanufacturing operations in-house; however, from an environmental sustainability perspective, such behavior is not always good for our environment. In particular, when the level of product upgrading is pronounced, the remanufacturing operations undertaken by the OEM are always detrimental to our environment, due to indulging in remanufacturing, as seen in Model O

Reverse Logistics: Overview and Challenges for Supply Chain Management

1-7This paper is aimed at introducing the concept of reverse logistics (RL) and its implications for supply chain management (SCM). RL is a research area focused on the management of the recovery of products once they are no longer desired (end-of-use products, EoU) or can no longer be used (end-of-life products) by the consumers, in order to obtain an economic value from the recovered products. This way, RL has become a matter of strategic importance, an element that companies are considering in their decision-making processes related to the design and development of their supply chains. In addition, a description of the implications of RL for SCM will be discussed and, finally, an analysis of some of the opportunities and challenges that RL implies for SCM will be presented.S

Pricing and Warranty Level Decisions for New and Remanufactured Short Life-Cycle Products

Remanufacturing has become more prominent as a recovery process to mitigate the massive disposal of short life-cycle product at its end-of-use. However, remanufactured product is often perceived to be inferior to new product, and it has lower value in consumer’s willingness to pay. To increase the perceived quality of the remanufactured product, manufacturer offers a warranty, since one of the three roles possessed in warranty is being a signal to product reliability. This paper studies the pricing decisions and warranty level decision for new and remanufactured products in a closed-loop supply chain consists of a manufacturer and a retailer. The optimization modeling is performed under Stackelberg game with manufacturer as the leader. We found that higher expansion effectiveness coefficient would increase the supply chain profit. Also, there is an interval of demand’s speed of change, where the total profit would be at its highest. The optimum warranty level can be achieved regardless the initial warranty level set at the beginning of retailer’s optimization. Furthermore, the remanufactured product’s wholesale and retail prices are influenced by the expansion effectiveness coefficient

Competition or Authorization—Manufacturers’ Choice of Remanufacturing Strategies

In the face of the cannibalization of remanufactured products produced by independent remanufacturers (IRs), original equipment manufacturers (OEMs) can produce remanufactured products themselves to compete with independent remanufacturers (IRs), or they can authorize the IRs to cooperate because of their seller reputation. This paper studies the key factors that influence OEMs’ choice of remanufacturing strategies. By establishing three two-stage models and comparing them, the thresholds for OEMs to choose different remanufacturing strategies were obtained. There is also an interesting finding that when the authorization fee is higher than a certain value, even if the remanufactured product poses a competitive threat to the new product, the OEM will help the IR improve their remanufacturing technology to save costs and achieve a win–win situation. With the increase in authorization fees, OEMs’ profits will increase first and then decrease, so it is not always better for OEMs to charge higher authorization fees. Whether it is an authorization or a competitive scenario, the improvement in remanufacturing technology by OEMs can increase the output of remanufactured products, which is conducive to environmental protection

Strategic Issues in Product Recovery Management

This article examines strategic production and operations management issues in product recovery management (PRM). PRM encompasses the management of all used and discarded products, components, and materials for which a manufacturing company is legally, contractually, or otherwise responsible. The objective of PRM is to recover as much of the economic (and ecological) value of used and discarded products, components, and materials as reasonably possible, thereby reducing the ultimate quantities of waste to a minimum. This article also discusses the relevance of PRM to durable products manufacturers. It contains a categorization of PRM decisions. A case study based on the PRM system of a multinational copier manufacturer is presented to illustrate a set of specific production and operations management issues. The experiences of two other pro-active manufacturers (BMW and IBM) are also discusse

The Effect of Product Quality on the Pricing of New and Remanufactured Short Life-cycle Product

Remanufacturing is one of the recovery process that has become significant among many attempts to mitigate the landfill exhaustion, especially from mountain of wastes that come from short life-cycle products disposal. However, remanufactured product are often perceived to have lower quality compared to the new one. There are misconception about remanufactured product and lack of knowledge about its characteristics. On the other hand, several studies show that price and product quality have positive relationship. This paper investigates the effect of product�s perceived quality on the pricing decision, to maximize the profit of the retailer and the manufacturer. We develop pricing decision model for new and remanufactured short life-cycle product in a closed-loop supply chain consists of a manufacturer and a retailer, where the manufacturer is a Stackleberg leader. We find that lower products perceived quality would decrease the retail and wholesale prices of new and remanufactured products, but does not affect the new products sales volume significantly. Also, the speed of change of demand influences the optimum total profi