Incorporating component reuse, remanufacture, and recycle into product portfolio design

Product take-back laws have been enacted in the Netherlands, and the European Commission is expected to follow suit. The legislation mandates that manufacturers bear the economic burden of collection and disposal of products at the end of their useful lives. Reuse or remanufacturing of some components might be more cost-effective than disposal and provide an opportunity for recovery of their economic value. However, manufacturers have not traditionally engaged in the long-range planning over several product lifecycles that cost-effective reuse or remanufacturing requires. This paper develops a model for incorporating long-range planning for component reuse in product design. The model employs a product portfolio approach based on market segmentation, rather than a single product. The model is embedded in a decision tool that aids in determining when a product should be taken back, and which components should be reused, recycled, or disposed. A case study of a line of personal computers (PCs) demonstrates an implementation of the model. It also shows that if product take-back is mandated, it is in the PC manufacturer's best interest to shift from selling a product to essentially selling a service by controlling when the product is taken back and, thus, effectively creating a leasing program. The portfolio approach creates opportunities for the design engineer to distribute the cost, reliability, and environmental impacts of component reuse, remanufacture, and recycling in such a way that the end result is higher customer satisfaction' than designing one product for all customer groups.