Circular economy assessment tool for end of life product recovery strategies

Alamerew, Yohannes A.; Brissaud, Daniel Article Circular economy assessment tool for end of life product recovery strategies Journal of Remanufacturing Provided in Cooperation with: Springer Nature Suggested Citation: Alamerew, Yohannes A.; Brissaud, Daniel (2019) : Circular economy assessment tool for end of life product recovery strategies, Journal of Remanufacturing, ISSN 2210-4690, Springer, Heidelberg, Vol. 9, Iss. 3, pp. 169-185, https://doi.org/10.1007/s13243-018-0064-8 This Version is available at: https://hdl.handle.net/10419/232984 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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Alamerew 1 &Daniel Brissaud 1 Received: 3 December 2017 /Accepted: 15 October 2018 /Published online: 31 October 2018 #The Author(s) 2018, corrected publication 2019 Abstract Circular Economy (CE) aims to maintain the value of products, components, materials, and resources in the economy for as long as possible. Current end of life (EoL) product circularity decision-making methods are focused on technical and economic factors neglecting other crucial areas such as legislative pressure and customer demand, which are pertinent in the decision-making process. This paper presents a decision-making method to evaluate end of life product circularity alternatives at strategic level. A Product Recovery Multi-Criteria Decision Tool (PR-MCDT) is proposed to evaluate product circularity strategies from an integrated point of view, i.e. by simultaneously taking into account technical, economic, environmental, business, and societal aspects. The paper also identifies key end of life decision-making factors to assess product recovery strategies. An illustrative example is presented and discussed to show the applicability of the tool for the selection of product recovery options. A PR-MCDT is used at the senior/middle management level to ensure strategic decisions, which then promote success of the company. Keywords Circular economy.Remanufacturing .End of life strategy.Product recovery.Multicriteria decision methodology Introduction The global crisis in resource scarcity, population growth and climate change impacts are placing pressure to ditch the traditional “Make-Use-Dispose”economic model and adopt “make, use, return”as our collective mantra by joining the circular economy. The circular economy moves away from the traditional “take-make-dispose”economic model to one that is regenerative by design [12,13]. The main aim of the circular economy is considered to meet Journal of Remanufacturing (2019) 9:169–185 https://doi.org/10.1007/s13243-018-0064-8 *Yohannes A. Alamerew [email protected] 1 Univ. Grenoble Alpes, CNRS, G-SCOP, 38000 Grenoble, France economic prosperity, while maintaining environmental quality and social equity to create sustainable world for future generations [23]. Circular economy aims to facilitate an effective flow of resources, keeping products, components and materials at their highest value at all times through the extension of product life times by repair, recondition and remanufacture as well as closing of resource cycles - through recycling and related strategies [4]. Despite being proven to be both economically and environmentally beneficial, there are few successful examples, due to lack of analysis methods and tools that can assess different aspects of circular systems [3]. Product recovery has become increasingly important towards transitioning to a circular economy [2]. Product recovery management aims to close the loop throughout the product life cycle [26]. The implementation of extended producer responsibility (EPR) in new governmental legislation, together with the growing environmental and economic concern, demands that original equipment manufacturers (OEMs) to take care of their products after they have been discarded by the consumer [18,41]. Product recovery management (PRM) is the management of all used and discarded products, components, and materials to recover as much of the economic and ecological value as possible thereby reducing the quantity of discarded waste [42]. End of life product recovery strategies include Remanufacture, Repair, Recondition, Cannibalization, Redesign, Refurbish and Recycle [21,42]. All these end of life options are distinct from one another and selecting the best suitable product recovery option should take several factors into consideration [27]. End of life in this work refers to the point in time when the product no longer satisfies the last user. Current end of life product recovery decision-making approaches are centred on economic and technical factors [40] neglecting other equally influential aspects which are pertinent in the decision-making process such as market demand, social trends and legislative pressure. Additionally, there is lack of a holistic approach that uses an inclusive methodology to assess and evaluate recovery strategies from an integrated point of view i.e. by taking into account technical, economic, environmental, business and societal aspects simultaneously. The aim of this paper is to identify EoL decision-making factors and incorporate them into a holistic methodology to evaluate EoL product recovery strategies. The viability of a recovery strategy is evaluated against the relevant technical, economic, environmental, business and social criteria. The rest of the paper is organized as follows. Section “Literature review”presents the literature review on EoL decision making approaches and strategic evaluation of recovery strategies. In section “Research methodology”the research methodology used to answer the research questions is described. In section “The proposed methodology and tool”the multicriteria decision-making approach is discussed, and key decision-making factors used to assess the feasibility of recovery strategies are presented. Subsequently in section “Case study”,the application of the method on a case is discussed. Finally, conclusions are drawn by summarizing the main findings of the study. Literature review End of life product recovery decision methods The literature survey shows that there is a wide range of EoL decision making methods which employ various approaches. Due to the variation of drivers and interested parties, a holistic decision approach is required. End-of-life decision-making needs to use a holistic approach to 170 Journal of Remanufacturing (2019) 9:169–185 evaluate EoL strategies from various perspectives including environmental, economic, societal, business, technical, market and legislative aspects [36,43]. The term end-of-life in this research work is referred when the product no longer satisfies the last user of the product at end-of-use. Therefore, it is referred on the last user of the product and the product fails to satisfy the end user. But, there are many researchers who define the term in reference to the first user of the product that makes some strategies like reuse and minor repair to be considered as end-of-life strategies. An EoL option is considered as a Product Recovery Strategy (PRS), if fulfils three main criteria’s: collection of used products, reprocessing of a recovered product and redistribution of the processed product [42]. End-oflife product recovery strategies include Remanufacture, Repair, Recondition, Repurpose, Cannibalization, Redesign, Refurbish, Upgrading and Recycle [21,42]. Even though, this is not an exhaustive list of PRS and some of the strategies overlap with each other. End of life decision-making approaches are comprehensively grouped into three main categories; optimization methods, multi-criteria decision methodology and empirical method. Optimization methods The decision of mathematical optimization methods uses optimization problems for choosing a suitable product recovery option for a typical product. Optimization methods are completely focused on cost and economic benefit while it lacks the ability to consider other unquantifiable factors [10,16]. Papers that employ mathematical models, mixed integer programming models and numerical models hold a significant majority in the EoL decision making process [40]. Furthermore, due to the complexity of mathematical models and the requirement of too many input parameters, it is found to be difficult for industries to effectively and efficiently use the proposed EoL decision-making tools. Multi-criteria decision methodology (MCDM) These multi-criteria methods have benefits due to the technical aspect and structure by simultaneously analysing quantitative and qualitative factors. MCDM also takes the preference of the user/decision-maker in the decision-making process [6,24]. Empirical methods In this method the decision for the appropriate product recovery option is made based on knowledge and experience gained from analysing successful cases of product recovery [39]. Table 1presents end of life decision making methods in each category with the description of the usefulness of the method. Strategic decision of recovery strategies Strategic decisions within EoL product recovery assess the feasibility of recovery strategies for the business. Strategic evaluation is critical to ensure strategic decisions, which then promote success of the company [9]. Strategic decision of EoL products could be made prior to implementing a product recovery business; at the periodic stages to view whether it is having the desired effect on the business and at conceptual design phase particularly when they invested interests in business scenario such as product service system [16]. Several studies Journal of Remanufacturing (2019) 9:169–185 171 have focused on evaluating product recovery alternatives at strategic level. Table 2presents EoL evaluation tools for a product at strategic level. The literature survey shows that there is lack of a holistic approach that uses an inclusive methodology to assess and evaluate recovery strategies from an integrated point of view i.e. by taking into account technical, economic, environmental, business and societal aspects simultaneously. The research objective of this paper is therefore to answer the following questions: – &Which key factors should be considered in the evaluation of product recovery strategies with respect to the relevant technical, economic, environmental, business and social criteria? &How to assess product circularity strategies holistically by analysing the different types of factors? Research methodology The development process of product recovery multi-criteria decision tool (PR-MCDT) consists of three main phases; initial tool development based on literature, confrontation of the Table 1 End of life decision making methods Decision-making method Description Multi objective optimization decision methodology [22] Mathematical multi-objective optimization model to identify optimal product recovery solution Stochastic dynamic programming model [26] Mathematical optimization approach that sets conditional EoL option for a sub-assembly based on technical, legal and economic aspects Multi criteria matrix using AHP [19] MCDM approach: each component is assigned ranking of EoL option Multi criteria for product EoL selection [5] MCDM: ranking of EoL option is implemented for each component in a product Remanufacturing product profile design tool (REPRO2) [44] Empirical approach of eleven product profiles to to design product accordingly Case based reasoning (CBR) [39] Empirical approach for suggesting EoL option for a product as a whole Table 2 EoL decision tools for strategic evaluation of products [16] Decision tool Economic Environmental Social Product EoL decision making methodology [33]x x 0 Product EoL strategy selection algorithm Using case base reasoning [15] xx x 0 Deployment model for part reuse in customised design of remanufactured products [7] xx 0 0 A custom-built decision tool called Repro2 to product suitability based on product profiles [14] xx x Product Life Cycle Extension Techniques Selection (PLEATS) model [11] xx x Product EoL Strategy Selection algorism using fuzzy Logic and Bayesian updating [34] xx x Extension of the End of Life Design Advisor (ELDA) Using a neutral networking model [8] xx 0 0 172 Journal of Remanufacturing (2019) 9:169–185 proposed tool to academics and industry practitioners, and final tool development. The development process of the tool is presented in Fig. 1. Subsequently, an explanation of each tool development phases is presented. Initial tool development A literature review is made to evaluate and analyse the available literature in the research area of EoL decision-making methods. The databases of Google Scholar, Science Direct, university’s library Uni-Search & ISI web of Science is used to gather and access relevant articles. The terms “End-of-Life Decision-making”,“Circular Economy”,and“Product Recovery Management”are used as keywords. Further information concerning product end-oflife decision making is gathered from reviewing corporate documents, marketing and publicity documentation, organization documentation and others. There are some renowned works on the research area of Product Recovery Management (PRM). Reading articles primarily related to End-of-Life product recovery decision making approaches had a significant role in this research work. The emphasis was given to understand end-of-life decision making approaches at strategic level. A comprehensive literature review was undertaken to identify key end of life decisionmaking factors that used to evaluate product recovery strategies. Firstly, an exhaustive list of factors was presented and then the decision-making factors were sorted into main categories by the authors. Afterwards, factors from each category were evaluated based on literature review and expertise from G-SCOP laboratory. Based on the analysis, key decision-making factors were identified in regard to technical, economic, business, environmental and societal aspects and the most important factors were incorporated into decision making criteria. Based on findings from literature and feedback from expertise, the most important factors pertinent to consider in the decision-making process were accentuated. The multi-criteria decision-making approach has been chosen as methodology to evaluate EoL product recovery strategies at strategic level. An iterative and multi-level procedure is used for selecting an appropriate multi-criteria decision-making methodology. The decisionmaking approach considers business, technical, legislative, market, economic, environmental and societal factors which will be integrated into the evaluation process. Improvement of the initial tool The initial product recovery multi-criteria decision tool (PR-MCDT) was presented at the international conference on remanufacturing - ICoR-2017 [1]. The venue was chosen to allow many members of sustainability community, both from industry and academia, to reflect on the Fig. 1 Graphical depiction of the research methodology Journal of Remanufacturing (2019) 9:169–185 173 proposed tool. Verbal feedbacks were obtained and taken into consideration to improve the proposition. Table 3presents a list of reviews along with their observations at ICoR 2017. Final tool development The proposed tool was revised and improved based on the suggestions from the ICoR2017 audience. Hence, the final version of the tool is presented as a contribution to the knowledge of this research. The following section presents the result and discusses the outcome of the research. The proposed methodology and tool Multi-criteria decision tool A Product Recovery Multi-Criteria Decision Tool (PR-MCDT) is proposed for assessing product circularity strategies of a product at the end of its life. The six basic steps that grid the approach are as follows: (1) selection of potential end of life strategies, (2) scoping of end of life strategies, (3) selection of relevant indicators, (4) assessment of end of life strategies, (5) analysis and evaluation of end of life strategies, (6) refinement of strategies and final evaluation. Figure 2and Figure 3shows the mains steps and inputs of the multi-criteria decision tool respectively MCDT is capable to consider product EoL selection holistically from an integrated point of view i.e. by simultaneously taking into account environmental, technical, economic, societal and business criteria. The main benefit of this methodology comprises, the decision maker has the opportunity to consider key decision factors such as legislation, new technologies and market demand in the end of life product recovery decision-making process.The decisionmaking approach also takes into account the preferences of the user in the evaluation process of end of life strategies. A brief description of each step of the tool is presented below. I. Selection of potential end of life strategies The definition of product recovery EoL strategies, constitutes the description of the product and associated potential EoL options. In this first step of MCDT approach, the decision-maker Table 3 List of reviewer’s positions along with their comments at ICoR 2017 Reviewer Position Comments from reviewers A Director of The Centre for Sustainable Design & Academician at the University of the Creative arts based in UK. The term end of life should be defined well with reference to which type of user (first user/last user) is considered in the proposed tool. B Academics from Linköping University, Sweden whose academic interest includes circular economy, product recovery Quests how the tool is easily applied and implemented in a recovery company C Representative from recovery company based in Denmark and Belgium Highlights end of life decision factors which are pertinent in which the decision making process 174 Journal of Remanufacturing (2019) 9:169–185 identifies potential EoL product recovery strategies and is unlimited by any constraints. The inputs to first step of MCDT are a list of product recovery strategies and the description of the product under study. The outcome of the stage of the process is a list of potential EoL strategies for a typical product. Product recovery EoL options include Repair, Recondition, Remanufacture, Cannibalization, Refurbish and Recycle. Except recycle, they are strategies that re-create a product similar to the initial one in order to prolong its life. If it is not possible to re-create, the recycle strategy is defined to recover the material the components of the products are made of. The strategies that transform the product in a different product like upcycle, upgrade and repurpose are out of the scope of the study. Table 4presents a summary of main product recovery strategies. An EoL option is considered as a product recovery strategy, if it fulfils three main criteria: collection of used products, reprocessing of a recovered product and redistribution of the processed product [6]. A potential product recovery EoL strategy is a possible candidate for evaluation and comparison during the decision-making process [38]. In multicriteria decision literatures, the list of potential candidate strategies are generally called alternatives or actions [28]. A functional description of the product is decisive for the recovery company to be able to achieve high level EoL treatment. The description of the product provides relevant information regarding the characteristics of the product as well as its functional use by the consumer [41]. Based on work in [6,17,20–22,25,31,32,37], Table 4outlines the following end-of-life product recovery options. Fig. 2 Multicriteria decision tool (MCDT) Journal of Remanufacturing (2019) 9:169–185 175 II. Scoping of end of life strategies After defining potential EoL strategies, this step gives the decision maker an opportunity to take a look of defined product recovery strategies against a set of feasibility criteria for the refinement of viable EoL recovery alternatives. The purpose of step 2 is to eliminate nonconforming scenarios during initial steps decision-making process based on various constraining influences such as technological, business, legislative and societal aspects that influence the feasibility of a particular EoL strategy. Table 4 Product recovery strategy definitions Remanufacture is an end of life product recovery strategy whereby used products are restored to the original equipment manufacturer (OEM) standard and receive a warranty at least equal to a newly manufactured product. Recondition involves returning the quality of a product to a satisfactory state level (typically less than a virgin standard/new product) giving the resultant product a warranty less than of a newly manufactured equivalent. Refurbishing involves returning products to a specific quality level, usually less than that of a new product. Reconditioned product has gone through extensive testing and repair than refurbished products. Cannibalization is an activity of recovering parts from returned products. Recovered parts are used in repair, refurbishing, reconditioning and remanufacturing of other products. Repair is an activity of returning a used product in to “working order”by fixing/replacing specified faults in a product using service parts. Recycle is an activity where discarded materials are collected, processed and used in the production of new materials or products. Fig. 3 MCDT input 176 Journal of Remanufacturing (2019) 9:169–185 imposes less risk to the exposure of hazardous materials over remanufacturing and recycling strategies while remanufacturing imposes medium risk to exposer of hazardous material over employees. Even though, remanufacturing (EoL alternative 2) is the best compromise EoL strategy from an integrated point considering environmental, economic & societal indicators (Table 13). Step VI: Refinement of strategies and final evaluation Before taking the final decision, EoL alternative 2 (Remanufacturing) should be examined in more detail following step II. Even if from a technical point of view, if remanufacturing of the automotive engine is possible, further investigation should be made to examine the selected strategy with list of pertinent decision-making factors like market demand and compliance with legislation. If it is realized that a the selected EoL option is unsatisfactory, another EoL option should be analysed again based on the ranking of the evaluation or the evaluation process is repeated with a consideration of alternative EoL strategies. Conclusion In this paper, we proposed a general product recovery multi-criteria decision tool (PR-MCDT) to evaluate product circularity strategies at strategic level. The decision-making tool uses a holistic approach, under several often-conflicting criteria, to assess the feasibility of recovery options with respect to relevant business, legal, environmental, social and economic factors and by taking in-to account the preferences of the decision maker. Based on the analysis of literature and feedback form expertise, decision-making factors were also identified in regard to technical, economic, business, environmental and societal aspect. The paper also highlighted key decision-making criteria pertinent to consider in the decision-making process. The paper dealt with important aspects related to the proposed approach such as definition of EoL strategies, selection of relevant indicators and exploitation of results. The proposed decision-making tool was also applied to an automotive engine case to illustrate the applicability of the approach. The results show that, remanufacturing is a feasible EoL option compared with repair and recycling strategies. Acknowledgements We gratefully acknowledge the support of “Circ€uit”- Circular European Economy Innovative Training Network, the Marie Sklodowska-Curie Innovative Training Network, focusing on the circular economy as part of Horizon 2020 Programme of the European Commission. Table 13 Table of evaluation of EoL strategies Indicator EoL Alt. 2 Remanufacture EoL Alt. 1 Reuse EoL Alt. 3 Recycle Economic total revenue (£) 2298.54 568.53 −49.75 Environmental benefit (Kg CO2) −702,245 −669,137 −302,754 Societal - Exposure to hazardous materials (Quantitative scale 5. very important; 4-important, 3-medium, 2-low, 1-very low) 324 Journal of Remanufacturing (2019) 9:169–185 183 Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made. Publisher’snote Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. References 1. 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