Meeting the Closed-Loop Challenge: The Case of Remanufacturing

Abstract

This article examines the experiences of a major European car manufacturer in developing a dedicated car engine remanufacturing operation and a reverse logistics operation to support it. The company's efforts demonstrate that achieving reverse logistics flows through existing logistics channels is feasible and can prove relatively unproblematic. The real challenges involved in closing the loop were in managing the remanufacturing process in the face of external competition for old engines, internal competition for spare parts, and a lack of consideration from new engine designers. The case provides general lessons for successful remanufacturing and shows the importance of including reverse logistics and remanufacturing operations in an integrated approach to product management.