Offshore Remanufacturing

Offshore Remanufacturing

Bo Xing (Department of Mechanical and Aeronautical Engineering, University of Pretoria, South Africa) and Wen-Jing Gao (Department of New Product Development, Mei Yuan Mould Design and Manufacturing Co., Ltd, China)
Copyright: © 2015 |Pages: 10
DOI: 10.4018/978-1-4666-5888-2.ch374
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1. Introduction

Since many countries are paying more and more attention on environmental and sustainable issues, there are increasing requirements that promote manufacturers are environmentally and friendly to collect, recover, and dispose their end-of-life products and parts. In the light of this statement, remanufacturing, which is an industrial process in which worn-out products are restored to like-new condition, thus becomes a matter of strategic importance for manufacturing or service companies (Xing & Gao, 2014). For example, best business practice of companies such as IBM, Xerox and Canon, as well as academic researches (e.g., Ferrer, 1997; Sundin & Bras, 2005) indicate that remanufacturing used products or modules has great economic, environmental and societal benefits. However, remanufacturing is just one of the options, but not the panacea. Cost reduction, competitive pressures, and changing rules (e.g., accessing to new markets and qualified personnel), to name just a few, are factors with the same importance as economics.

Nowadays, the continuing trend towards companies to source processes outside of their organizational boundaries (outsourcing) or abroad (offshoring) is well documented (Beulen, Fenema, & Currie, 2005; Arie Y. Lewin & Volberda, 2011). Offshore remanufacturing is an integral component of future operations strategy (Galbreth & Blackburn, 2010). This has become global in scope, with companies shifting service activities to low-cost economies such as India, China and Eastern Europe (Jahns, Hartmann, & Bals, 2006; Youngdahl & Ramaswamy, 2008). In the meantime, this subject also poses a great challenge in modeling and analysis of offshore remanufacturing decisions. For example, offshore remanufacturing involves higher shipping and handling costs and longer lead times relative to domestic production. To assure success in remanufacturing, the practitioners such as original equipment manufacturers (OEM) must design and implement a reverse logistics (RL) network for recovering and supplying used products or modules to the reproduction chain.

Motivated by these facts, in this work, we attempt to take a preliminary investigation of the offshore remanufacturing regarding the major challenges around. Briefly, the remainder of this article is organized as follows: Subsequent to the introduction in Section 1, the background of offshoring and remanufacturing is briefed in Section 2. Then, the existing challenges faced by offshore remanufacturing are outlined in Section 3 which is followed an illustrative solution regarding the transshipment issue encounter during offshore remanufacturing is given in Section 4. Next, the future research directions in the context of offshore remanufacturing are also provided in Section 5. Finally, the conclusion drawn in Section 6 closes this article.

Key Terms in this Chapter

Remanufacturing Process: Inspection, reprocessing, reassembly, and testing.

Outsourcing: Contracting work (such as a project or certain activities) out to an external organization.

Drayage Activities: The short-haulage container transportation by truck between a terminal and the origin (or destination).

Offshore Remanufacturing: A combination format that with the benefits of offshoring, such as lower costs and higher productivity, and the benefits of remanufacturing, such as more specialized skills.

Remanufacturing: An environmentally friendly strategy whereby the used products are recovered to useful life.

Agent-Based Modeling and Simulation (ABMS): A practice tool which used to capture the behavioural characteristics of interconnecting agents and the environment around them.

Offshoring: Getting work done in a different country.

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