Supply chain-based barriers for truck-engine remanufacturing in China

Transportation Research Part E 68 (2014) 103–117

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Transportation Research Part E

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Supply chain-based barriers for truck-engine remanufacturingin China

http://dx.doi.org/10.1016/j.tre.2014.05.0011366-5545/� 2014 Elsevier Ltd. All rights reserved.

⇑ Corresponding author. Tel.: +86 411 8470 6018; fax: +86 411 8470 8342.E-mail addresses: [email protected] (Q. Zhu), [email protected] (J. Sarkis), [email protected] (K.-h. Lai).

1 Tel.: +1 508 831 4831.2 Tel.: +852 2766 7920; fax: 852 2330 2704.

Qinghua Zhu a,⇑, Joseph Sarkis b,1, Kee-hung Lai c,2

a School of Business Management, Dalian University of Technology, Dalian, Liaoning Province 116024, PR Chinab School of Business, Worcester Polytechnic Institute, 100 Institute Road, Worcester, MA 01609, United Statesc Department of Logistics and Maritime Studies, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong

a r t i c l e i n f o

Article history:Received 25 September 2013Received in revised form 10 April 2014Accepted 1 May 2014

Keywords:RemanufacturingBarriersSupply chainDEMATELChina

a b s t r a c t

This paper introduces a research framework to identify barriers from a remanufacturingsupply chain perspective including strategic (governmental) and operational dimensions.Using responses from expert practitioners in a truck engine remanufacturer in China, agrey-based Decision-Making Trial and Evaluation Laboratory (DEMATEL) method is appliedto examine the cause-effect relationships among various implementation barriers. Theresults identify that lack of strong financial support for remanufacturing technologies orequipment updates and innovation are key implementation barriers. Lack of quality stan-dards of remanufactured products, adequate availability of used truck engines, and qualityguarantee marketing of remanufactured engines are also major barriers.

� 2014 Elsevier Ltd. All rights reserved.

1. Introduction

Efforts for eco-efficiency, extended producer responsibility, and general concern for the environment has caused industryto embrace energy saving and pollution reduction efforts. Remanufacturing, which can play a central role in these environ-mentally conscious industrial efforts, has become globally popular within a variety of industries (Webster and Mitra, 2007).Yet, the adoption and implementation of remanufacturing, operationally, strategically and regionally still faces significanthurdles to overcome. Even in developed countries, governments, communities, and organizations face extant barriers forremanufacturing practices. These barriers include reverse logistics costs, disassembling and component inspection technicalfeasibilities, and remanufactured products customer demand uncertainties (King and Burgess, 2005).

The issues facing developed country remanufacturing barriers have appeared in developing countries. Industries that canbenefit and are reliant on remanufacturing have emerged, e.g. heavy machinery, shipping, and automotive in these develop-ing countries. The automotive industry has had especially profound social and economic growth within China, the world’slargest developing country and currently the fastest growing economic and environmental influencer in the world. Notingthese emergent socio-economic and environmental issues, the Chinese government has introduced a number of regulatoryinitiatives encouraging industry and organizations to adopt remanufacturing practices (Xiang and Ming, 2011; Zhang et al.,2011).

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104 Q. Zhu et al. / Transportation Research Part E 68 (2014) 103–117

Barriers to implementing remanufacturing practices have been broadly examined (Hazen et al., 2012; Matsumoto andUmeda, 2011; Michaud and Llerena, 2011; Ostlin et al., 2008; Robotis et al., 2012; Xiang and Ming, 2011; Zhang et al.,2011). Previous studies mainly focused on identifying barriers for remanufacturing based on literature reviews and casestudies. For example, one study interviewed 11 remanufacturers, and identified barriers from the industry perspective,including barriers related to collection of used products, development of efficient remanufacturing processes, and cultivationof demand (Matsumoto and Umeda, 2011). One study examined barriers of automobile component remanufacturing inChina at both the policy and industry level (Zhang et al., 2011). Another study examined cases in Sweden and indicated thatlack of efficient supply chain relationships between remanufacturers and suppliers/customers is a key obstacle (Ostlin et al.,2008). Based on these previous studies, we further develop a systematic research framework considering two dimensions.One dimension focuses on the stages of the remanufacturing supply chain. The other dimension is from both the policyand industry perspectives. Using this framework, we identify barriers for remanufacturing from a supply chain perspectiveby examining a remanufactured truck engine product at the policy (governmental) and industry (remanufacturer) levels.Moreover, we examine the causal-effect relationships among the implementation barriers for remanufacturing using agrey-based Decision-Making Trial and Evaluation Laboratory (DEMATEL) method. This will be the first investigation that uti-lizes such a framework to more fully understand barriers to remanufacturing. The insights represent an important contribu-tion for policy makers, professional organizations, and individual companies.

To achieve our research goals, we first introduce a framework of supply chain-based implementation barriers for truckengines remanufacturing in China, and then identify barriers at both the policy and corporate levels in Part 2. In Part 3,we introduce the DEMATEL method and data collection for analyses. We present the study results and discuss them in Part4. We summarize the findings and implications in Part 5.

2. Identifying barriers

2.1. Background of remanufacturing

Remanufacturing, in many industries, has become an approach for both improving business competitiveness while reduc-ing environmental burdens. The concept has been adopted globally. Two prevalent and leading industries in remanufactur-ing products are the automobile parts and electronic/electrical industrial sectors (Matsumoto and Umeda, 2011). As far backas 1996, the US remanufacturing industry alone had sales of US$53 billion with about 73,000 remanufacturer firms (Lund,1996). In developed countries, remanufacturing was first driven by economic considerations in the 1990s, and has been fur-ther supported with environmental policy such as extended producer responsibility (Toffel, 2003). Remanufacturing auto-mobile parts is quite common in developed countries and has been occurring for decades, from the early years of theautomobile industry (Steinhilper, 1998). Japan has advanced remanufacturing of electronic products such as photocopiersand single-use cameras, although it has not matured as much as in remanufacturing automobile parts (Matsumoto andUmeda, 2011).

Investigation of remanufacturing in emergent economies, especially China, has been relatively insignificant. A study onremanufacturing may be beneficial in these emergent economy nations due to a multitude of pressures including economicand environmental ones. For example, automotive environmental and resource scarcity issues are especially prevalent inChina. In response the Chinese government has made efforts to promote remanufacturing in the automobile industry(Xiang and Ming, 2011). In 2006 the National Development and Reform Committee (NDRC), the Ministry of Science andTechnology (MST), and the Ministry of Environmental Protection (MEP, previously the Environmental Protection Administra-tion) jointly released a regulatory policy for automotive products recovery. Article 40 of the Circular Economy PromotionLaw of the People’s Republic of China (enacted in 2009) further identified government support for automotive parts reman-ufacturing. In 2010, the remanufacturing industry has been positioned as a new economic development area.

To further this economic development and promoting the remanufacturing industry, the Chinese government has sup-ported a variety of demonstration projects. In March of 2008, the NDRC approved 14 demonstration remanufacturing plantswith the general goals to promote remanufacturing trade and sales. The demonstration remanufactured products wererestricted to five types of automobile components including engines, transmission gears, generators, starters and steeringgears. Engines (mainly truck engines) account for the majority of the remanufacturing output values primarily due to a muchhigher unit value than the other four components. Four of 14 demonstration plants do remanufacturing for truck engineswhile Sinotruk Jinan Fuqiang Power Co., Ltd. (JFP) is the largest and most influential organization with over half the outputof truck engine remanufacturing in China.

With these initial nation-wide pilot experiences, China realized that quality and process control were key developmentalissues for their remanufacturing industry. In March of 2013, the NDRC approved 28 demonstration remanufacturing plantswith the general goal to establish a process and quality systems throughout the supply chain of remanufactured automobileparts ranging from used parts collection, remanufacturing processes and sale channels. The remanufactured products havebeen extended to other automobile parts and agriculture machinery while the plants include remanufacturers, used prod-ucts recycling companies as well as those providing technologies and equipment for remanufacturing.

With the governmental support and their own investments, some leading Chinese remanufacturers have successfullydeveloped a business model that contributes to resource savings and emission reductions (Liu et al., 2005). However, overall,

Q. Zhu et al. / Transportation Research Part E 68 (2014) 103–117 105

the automobile remanufacturing industry in China is still in an early developmental stage, where implementation barriersexist throughout their supply chains, before, during and after remanufacturing, along with limits based on governmental pol-icies and regulations, and consumer acceptance (Zhang et al., 2011). In contrast to developed countries, China has a veryimmature recycling system, a serious limitation for effective and high quality remanufacturing processes (Xiang andMing, 2011; Zhang et al., 2011). Although this immature system is a limitation, it also serves as an opportunity to designa more effective system. In designing remanufacturing capabilities, it is necessary to understand the barriers this industryand its organizations face.

2.2. Barriers for truck-engine remanufacturing in China

Fig. 1 shows a typical supply chain of a remanufactured truck engine. A remanufacturer can acquire used engines fromoriginal equipment manufacturers and consumers. Original equipment manufacturers (OEMs) have engines used for exper-iments and returned from consumers during the guarantee period. These engines cannot be used in new trucks and thus theOEMs forward these engines to the remanufacturer. Consumers, at an engine’s end-of-life, return their used engines forredemption fees received from the remanufacturers even if they purchase new, not remanufactured, engines. Some consum-ers purchase remanufactured engines directly from remanufacturers that are in close proximity. Most consumers purchaseremanufactured engines during trucks overhaul in maintenance stations or 4S (sale, sparepart, service and survey) centers.

In designing and implementing the remanufacturing supply chain, especially in China, there exist various implementationbarriers for remanufacturing truck engines through the whole supply chain. Thus, we introduce barriers in four key supplychain stages of remanufactured engines. These stages encompass sources of used engines, remanufacturing, sales of reman-ufactured engines, and use of remanufactured engines. Not only is there a longitudinal supply chain flow categorization forthe implementation barriers, these implementation barriers can also occur at two levels, namely strategic (governmental)and operational dimensions. A summary of all implementation barriers inhibiting remanufacturing throughout the fourstages at two levels is shown in Table 1, for a total of 19 identified barriers. Details about definitions and explanations of19 barriers are introduced in the Appendix A. Sources and reasoning for these barriers are described in the next section.

2.2.1. Strategic barriersThe Chinese government supports remanufacturing but a legal system mandating extended producer responsibility,

which can greatly increase the need for such a market, in China remains non-existent (Xiang and Ming, 2011). We examinethese and related implementation barriers in the four key supply chain stages for remanufacturing a truck engine.

2.2.1.1. Sources of used engines. Lack of adequate availability of used engines for remanufacturing purposes can be a difficultchallenge for growing a remanufacturing industry. Sometimes government regulations can prove counterproductive fordeveloping a remanufacturing industry. For example, the State Council of China issued a regulation titled ‘‘Management rulesof end-of-life vehicles take-back’’ in June of 2001, which stipulates return of five assemblies including engine, steering gear,fore axle, back axle, and chassis frame to iron and steel manufacturers. Requiring return of these truck components back tothe metals processors circumvents the need or opportunity for remanufacturers to gain access to them. Thus, this rule hin-ders the development and growth of the remanufacturing industry within China. Realizing that remanufacturing is prefer-able to metals recycling, from an environmental perspective, the State Council considered the ‘‘Management Regulations ofend-of-life vehicles take-back and dismantling’’ in 2012. These regulations allow for return of the five assemblies to reman-ufacturers. However, this regulation has yet to be formally enacted.

Used trucks are necessary for a remanufacturer to operate at an appropriate economy of scales level. Most of used vehi-cles are sold to secondary markets where they are eventually lost to the remanufacturing market, sometimes never to bebrought back into the recycling system at all (Xiang and Ming, 2011). China has allowed import of mechanical and elec-tronic/electrical products as raw materials for recycling. In addition, China also approved some demonstration remanufac-turers to use imported end-of-life products and their parts. However, due to the existing illegal market of low qualityrefurbished vehicles and the resulting potential safety issue, China forbids the import of used vehicles, including trucksand their parts, many which have remanufacturable materials. China forbids the import of used vehicles, including trucks

Manufacturer

Engines for experiments

Returned engines during the

guarantee period

RemanufacturerRetailers

Maintenance

stations

4S centers

Consumers’

purchasesConsumers’ use

Fig. 1. A supply chain of truck engines remanufacturing in China.

Table 1A list of supply chain-based barriers for a truck engine remanufacturer in China.

Barriers

Strategic Sources of used engines B1: Regulatory policy requires vehicle assemblies to be returned to metals recyclersB2: Used trucks are sold to secondary markets never to return to the original vehicle supply chainB3: Import of used vehicles or their parts is forbidden

Remanufacturing B4: Lack of technical standards and specifications for remanufacturingB5: Lack of strong financial support for remanufacturing technology development or equipment update

Sales of remanufacturedengines

B6: Lack of information and support for quality guarantee for remanufactured enginesB7: Lack of information about performance on resources saving and environmental protection from thepractice of remanufacturingB8: Lack of industrial standard for evaluating the quality of remanufactured products

Use of remanufacturedengines

B9: Lack of an accepted and easy to use registration system for remanufactured engines

Operational Sources of used engines B10: Taxes cannot be offset for used engines purchaseB11: Used engines from different brands are not allowed to all be remanufacturedB12: Arrival time and quantity of used engines is uncertainB13: Quality of used engines is uneven and uncertain

Processes ofremanufacturing

B14: Engine manufacturers are reluctant to design for remanufacturing

Sales of remanufacturedengines

B15: Consumers have low environmental awarenessB16: Low quality of superficially repaired engines sold in an illegal way destroys reputation ofremanufacturersB17: Lengthy and undependable delivery times of remanufactured engines due to poor inventorymanagementB18: No reasonable pricing system exists for remanufactured engines

Use of remanufacturedengines

B19: Consumers concern about quality guarantee and after-sales service for remanufactured engines


and their parts, many which are remanufacturable materials. The discussions above lead us to identify three implementationbarriers for remanufacturing in China.

B1: Regulatory policy requires vehicle assemblies to be returned to metals recyclers.B2: Used trucks are sold to secondary markets never to return to the original vehicle supply chain.B3: Import of used vehicles or their parts is forbidden.

2.2.1.2. Remanufacturing. Developed countries have introduced innovative technologies for enabling remanufacturing prac-tices since manufacturers take the responsibility for treatment of their used products and realize competitive advantages(Kleber, 2006). Investment in advanced technologies, although initially costly, may reduce cost over the life of remanufac-turing processes (Robotis et al., 2012). Developing countries have come to realize the importance of technology developmentto achieve efficient remanufacturing (Mukherjee and Mondal, 2009). China, realizing the need to further technology devel-opment, has supported development of remanufacturing technologies, for example cutting (Wang et al., 2013) and sourcesurface forming (Xu et al., 2012b) technologies. However, as a barrier, China is lacking industrial standards to help diffusethe adoption of remanufacturing processes. Compared to developed countries, China needs to develop more advancedremanufacturing technologies and supporting technical standards (Xu et al., 2012b).

Based on the discussions above, we put forward two implementation barriers for remanufacturing.

B4: Lack of technical standards and specifications for remanufacturing.B5: Lack of strong financial support for remanufacturing technology development.

2.2.1.3. Sales of remanufactured engines. Consumer tolerance for uncertainties related to remanufactured products has adirect effect on their willingness to buy them (Hazen et al., 2012). However, consumers are not clear about the qualityand environmental benefits for utilizing remanufactured products. With the long history of remanufacturing (Hutchensand Hawes, 1985), consumers in developed countries are typically more confident about the quality of remanufactured prod-ucts. Chinese remanufacturers have made efforts to guarantee quality of remanufactured products, but consumers accep-tance for remanufactured items is still a challenge (Zhang et al., 2011). In developed countries, consumers are lessreluctant in buying remanufactured products. Having widely available information about the environmental benefits ofremanufactured products can improve the chances of acceptance of these products (Michaud and Llerena, 2011).

Based on the situation in China, we identify two implementation barriers for remanufacturing.


B6: Lack of information and support for quality guarantees for remanufactured engines.B7: Lack of information about performance on resources saving and environmental protection from the practice ofremanufacturing.B8: Lack of industrial standards for evaluating the quality of remanufactured products.

2.2.1.4. Use of remanufactured engines. In China, the local Vehicle Administration Stations of the Public Security Authoritiesare not familiar with the use of remanufactured engines. Thus, these stations allow no change of engine registration numberin cars3. Previously there were even regulations where individual vehicle consumers were unable to buy, not to mention useremanufactured engines (Zhang et al., 2011). This situation highlights the last strategic (governmental) barrier related to truckengines remanufacturing in China.

B9: Lack of an accepted and easy to use registration system for remanufactured engines.

2.2.2. Operational barriersBesides strategic (governmental) barriers, operational barriers are also present throughout the supply chain of a reman-

ufactured truck engine.

2.2.2.1. Sources of used engines. Cost control for purchases of used trucks is important (Jiang et al., 2010). However, accordingto the current Chinese taxation system, no value-added tax can be offset (tax incentive) when a remanufacturer buys usedengines (Zhang et al., 2011). Yet, a manufacturer can offset the value-added tax which is paid by an original part/componentproducer. In addition, there are proprietary licensing agreements that will not allow a remanufacturer of one brand ofengines to remanufacture engines from other engine brands.

The accurate time and quantity of used product returns is important, and efforts have been made to forecast the arrivaltime and quantity (Clottey et al., 2012). A previous study developed a model to predict quantity of used products (Pokhareland Liang, 2012). However, in many if not all cases, when and how many used products are returned still have relativelyhigher uncertainty for management (Tao et al., 2012). Generally, the quantity of returned used products is random and sen-sitive to the price for redemption (Xu et al., 2012c). In addition to supply timing, the quality condition of returned productsalso has high uncertainty (Robotis et al., 2012). Controlling the remanufacturing system given uneven and uncertain qualityof returned products is also a challenge to overcome (Jin et al., 2011).

Based on discussions above, we put forward four operational implementation barriers for remanufacturing in China.

B10: Taxes cannot be offset for used engines purchase.B11: Used engines from different brands are not allowed to all be remanufactured.B12: Arrival time and quantity of used engines is uncertain.B13: Quality of used engines is uneven and uncertain.

2.2.2.2. Remanufacturing operations. Extended producer responsibility (EPR) related regulations can effectively promote eco-design. In China, the Chinese WEEE enacted on January 1 has also stimulated the motivations of manufacturers to design forremanufacturing (Yu et al., 2008). Unfortunately, China has not developed an EPR related law, which could certainly encour-age, if not pressure organizations to support easier remanufacturing. Even within the same brand of a remanufacturer, atruck manufacturer is not interested in getting feedback from the remanufacturer, let alone including remanufacturing con-siderations into design of new engines. Even in developed countries, disassembling used products can be an implementationbarrier for remanufacturing (King and Burgess, 2005). Not including design for remanufacturability by an original equipmentmanufacturer is a major barrier and leads us to the next barrier.

B14: Engine manufacturers are reluctant to design for remanufacturing.

2.2.2.3. Sales of remanufactured engines. From the product life cycle perspective, remanufacturing can save energy consump-tion and reduce environmental emissions (Sakai and Takata, 2012). With high environmental awareness, consumers indeveloped countries are willing to buy remanufactured products due to their environmental performance (Michaud andLlerena, 2011). Chinese consumers are characterized with relatively lower environmental awareness, and thus they maynot prefer greener products (Zhao, 2006). A main reason to explain the unwillingness of Chinese consumers to buy reman-ufactured products is their concern about the quality of remanufactured products. In China, some illegally operating (infor-mal economy) companies simply repair engines and sell these lower quality engines while circumventing regulations,

3 This regulatory practice requires a new car registration/engine registration to be purchased if a remanufactured engine is used in a vehicle. If an old engineis just repaired no new registration number is required. Thus, there is additional paperwork and cost for remanufactured engines to be introduced in oldervehicles.


referring to their products as quality remanufactured engines. This type of informal economy has negatively affected the rep-utation of remanufactured engines in China.

Due to the uncertain demands for remanufactured engines, a retailer including a 4S center or a maintenance station normallyhas no or low inventory for remanufactured engines. As a result of the uncertainty, the delivery time of remanufactured enginesis usually longer or less dependable than new engines, which affect consumers’ willing to buy remanufactured engines.

Additionally, a reasonable pricing system is important to sell remanufactured products (Zhao et al., 2013). Reputation of aremanufacturer can positively affect the price of remanufactured products. A previous study identified that remanufacturedproducts can be sold at a relatively higher price if they are remanufactured by original equipment manufacturers or theirauthorized factories than those remanufactured by third parties (Subramanian and Subramanyam, 2012). Unfortunately,how to develop the price of a remanufactured engine is still challenging.

Based on the discussions above, we develop the following four implementation barriers for remanufacturing.

B15: Consumers have low environmental awareness.B16: Low quality of superficially repaired engines sold in illegal ways destroys reputation of remanufacturers.B17: Lengthy and undependable delivery time of remanufactured engines due to poor inventory management.B18: No reasonable pricing system exists for remanufactured engines

2.2.2.4. Use of remanufactured engines. A remanufacturer provides a similar warranty for remanufactured products, but con-sumers may still be concerned about after-sales service (Wu, 2012). A remanufacturer still needs to provide stronger war-ranties, typically resulting in higher service costs and capabilities requirements. Yet, the pricing still needs to be lower thanoriginal equipment (Subramanian and Subramanyam, 2012). Thus, we put forward the last implementation barrier forremanufacturing in China:

B19: Consumers concern about quality guarantee and after-sales service for remanufactured engines.

3. Methodology

3.1. Grey-based Decision-Making Trial and Evaluation Laboratory approach

The DEMATEL approach originates from the Geneva Research Centre of the Battelle Memorial Institute, which is used toexamine causal-effect relationships among factors (Fontela and Gabus, 1976). Two key issues have to be considered whenapplying this approach properly. One is to identify the most important factors. We developed a systematic framework toidentify the most pertinent remanufacturing barriers through supply chains at both the policy (strategic) and industry (oper-ational) levels. This framework helps us minimize missing any important barriers. Moreover, a pairwise comparison betweeneach two factors is key for the approach. Given that too many factors will make comparisons difficult, only 19 factors aretotally included. Another issue arises from the uncertainty when comparing relationships of pairs of factors. To address lev-els of uncertainty, the grey method is also integrated.

Similar to previous studies (Fu et al., 2012; Lin, 2013), three steps are used to examine relationships among barriers forused truck engines remanufacturing and also identifying key and basic barriers.

Step 1: Define grey scales for comparisons

First, we define a pairwise influence comparison scale, including no influence (N), very low influence (VL), low influence(L), high influence (H), and very high influence (VH). The scale is uncertain, and thus we define linguistic terms with greynumbers. Following a previous study (Fu et al., 2012), we define N, VL, L, H, VH as [0, 0], [0, 0.25], [0.25, 0.5], [0.5, 0.75]and [0.75, 1], respectively.

Step 2: Develop a crisp matrix for each evaluator

We asked each evaluator to pairwise compare the implementation barriers and then constructed a grey direct-relationmatrix. To deal with the grey scale, we used the demonstrated method of Converting Fuzzy data into Crisp Scores (CFCS)(Wu and Lee, 2007). Then, we normalized the grey direct-relation matrix, and developed a crisp matrix for each evaluator.

Step 3: Construct the prominence-causal digraph

Three evaluators were invited and assigned relative importance weights to each according to their positions and knowl-edge. Then, we determined the overall crisp matrix using weighted averages. The direct-relation matrix was then normal-ized, and the total relation matrix for the three evaluators was the ultimate result. In a final step, a prominence-causaldigraph was constructed. A sensitivity analysis was completed by altering the weights assigned to each of the threeevaluators.


3.2. Selection of evaluators

To use the DEMATEL approach to examine the implementation barriers for truck engines remanufacturing, evaluatorsfrom Sinotruk Jinan Fuqiang Power Co., Ltd. (JFP) were selected.

JFP is a subsidy of the China National Heavy Duty Truck Group Co, Ltd., which both manufactures and remanufacturestruck parts. It is the first automobile engine remanufacturer in China, and it was established as a joint venture between Chinaand the UK in 1994. In October of 2005, JFP was selected as one of the first demonstration units for the circular economypolicy set forth by the Chinese central government (Geng et al., 2013). At that time, JFP was also the only vehicle engineremanufacturer demonstration project. In 2008, JFP became one of the fourteen national demonstration plants for automo-bile part remanufacturing. This number of demonstration projects for remanufacturing further emphasizes the growingimportance of remanufacturers in China’s economy Professionally, JFP is the only Asian member of the Production EngineRemanufacturers Association (PERA). With an area of 73,000 square meters, JFP has new production lines for engine partswith an annual output of 100,000 sets, and its engine remanufacturing capacity will gradually reach an annual output of50,000 sets. All these factors shown that JFP, as a leading and early Chinese engine remanufacturer, would be quite awareof the many issues facing remanufacturing in China.

Three evaluators in JFP are used in this study. The first evaluator is a vice president responsible for remanufacturing strat-egy and operations. He has worked in the field of vehicle manufacturing for over 25 years. He has been at JFP since its estab-lishment in 1994.

The second evaluator is the director of remanufacturing marketing department. He has been employed in engine produc-tion companies for over 20 years. He has also been employed as the director of the manufacturing marketing department ofJFP and its predecessor company. He has been the director of the remanufacturing marketing department since 2011.

The third evaluator is the director of the remanufacturing technology department. He has worked in vehicle manufactur-ing for five years. He has been the director of the remanufacturing technology department for almost two years.

As the presiding (leading) company of the remanufacturing association for automobile parts and components, JFP orga-nizes workshops, forums and other knowledge sharing activities amongst all remanufacturing companies in China everyyear. Thus, the three evaluators in this study are quite familiar and involved with the whole remanufacturing industry inChina. They were asked to evaluate barriers using their whole industry knowledge and experience.

This purposive sample grouping of evaluators was made to provide evaluation from higher and lower management levels,and includes varying levels of expertise in the vehicle, vehicle engine, and remanufacturing fields.

4. Results, discussions and implications

4.1. Results

Tables 2–4 are the direct-relation matrix of barriers completed by the three evaluators. A number in the table indicatesthe influence level of the barrier in the line affect the barrier in the row. Five scales of influence levels are: 0 = no influence,1 = very low influence, 2 = low influence, 3 = high influence, and 4 = very high influence.

Table 2The direct-relation matrix of barriers by Evaluator 1.

Barriers B1 B2 B3 B4 B5 B6 B7 B8 B9 B10 B11 B12 B13 B14 B15 B16 B17 B18 B19

B1 0 0 0 4 3 3 3 3 0 0 0 0 0 3 0 0 0 0 3B2 3 0 0 3 3 3 3 3 3 3 2 0 4 2 2 2 0 2 0B3 0 4 0 4 3 2 2 3 0 2 4 2 2 2 2 2 0 0 2B4 3 4 0 0 0 0 0 4 3 0 0 0 4 3 0 4 0 0 4B5 4 4 4 4 0 4 4 4 3 4 2 1 1 2 3 1 2 3 3B6 0 0 0 4 3 0 4 4 0 0 0 0 3 0 0 4 0 0 4B7 3 0 0 0 4 3 0 0 0 0 0 0 0 0 4 0 0 0 0B8 3 4 0 4 3 4 2 0 0 0 2 0 3 4 0 4 0 1 4B9 0 4 3 0 3 3 3 3 0 3 3 0 0 0 0 0 0 0 3B10 0 0 3 0 4 0 0 0 0 0 2 2 0 2 0 3 0 4 0B11 0 2 4 0 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0B12 0 4 0 0 3 2 2 0 0 2 0 0 2 3 0 2 0 2 3B13 0 3 0 3 3 3 3 3 0 0 0 0 0 4 2 3 0 2 2B14 2 3 0 4 3 3 2 3 2 2 0 2 3 0 2 2 0 3 3B15 0 0 0 0 3 4 4 3 0 0 0 0 3 0 0 0 0 0 3B16 0 4 0 0 2 3 2 3 0 0 2 0 2 3 0 0 0 2 3B17 0 3 2 0 3 0 2 0 0 2 2 3 2 3 0 0 0 1 1B18 0 0 0 0 4 0 0 0 0 3 0 0 0 0 0 0 0 0 0B19 0 0 0 0 3 4 0 4 0 0 0 0 3 3 2 4 0 0 0

Note: 0 = no influence, 1 = very low influence, 2 = low influence, 3 = high influence, and 4 = very high influence.




Note: 0 = no influence (N), 1 = very low influence (VL), 2 = low influence (L), 3 = high influence (H), and 4 = very high influence (VH).




Note: 0 = no influence (N), 1 = very low influence (VL), 2 = low influence (L), 3 = high influence (H), and 4 = very high influence (VH).


Given the work experience and management levels, we initially assign weights of 0.50, 0.25, and 0.25 to Evaluators 1, 2,and 3, respectively. Using three steps for our DEMATEL approach introduced in Section 3.1, total-relation matrix (T) is deter-mined and is shown in Table 5. The degree of prominence and net cause-effect values is shown in Table 6. The prominencevalue represents the total cause and effect influences. It is the sum of the causal influence (R) and the effect influence (D). Afactor with a high prominence value is an important factor which affects another factor while it may also by affected by otherfactors. The net cause-effect value is calculated by subtracting the effect influence (D) from the cause-effect value (R). A fac-tor with a high net cause-effect value indicates that it is an elementary factor which affects other factors.

Fig. 2 graphically shows the overall DEMATEL prominence–causal relationship. Using the benchmark of 0.135 by addingtwo standard deviations to the mean, as a measure for significant relationships, arrows in Fig. 2 are drawn between thoseitems that are equal to or larger than that value. The bolded numbers in Table 5 represent those relationship values thatare over the benchmark of 0.135.

Table 6 and Fig. 2 show that four barriers with the highest prominence values are all at the strategic levels. These prom-inent barriers include lack of strong financial support for remanufacturing technology development or equipment update(B5), lack of quality standard for evaluating remanufactured products (B8), used trucks are sold to secondary markets neverto return to the original vehicle supply chain (B2), and lack of information and support for quality guarantees for remanu-factured engines (B6). For four barriers with the highest net cause values, two are at the strategic level and two are at the

Table 5The total-relation matrix (T).


B1 0.044 0.072 0.045 0.114 0.110 0.094 0.100 0.106 0.042 0.045 0.048 0.035 0.062 0.088 0.052 0.065 0.023 0.051 0.105B2 0.105 0.077 0.058 0.105 0.142 0.120 0.127 0.137 0.094 0.091 0.084 0.050 0.115 0.103 0.074 0.119 0.034 0.081 0.093B3 0.077 0.134 0.039 0.122 0.137 0.106 0.112 0.128 0.057 0.089 0.093 0.066 0.093 0.096 0.072 0.108 0.033 0.058 0.105B4 0.115 0.144 0.059 0.069 0.105 0.098 0.090 0.163 0.089 0.061 0.062 0.055 0.131 0.117 0.058 0.143 0.039 0.076 0.164B5 0.134 0.167 0.124 0.153 0.119 0.162 0.161 0.176 0.102 0.140 0.111 0.070 0.118 0.134 0.107 0.140 0.063 0.113 0.166B6 0.080 0.094 0.042 0.109 0.129 0.075 0.126 0.150 0.058 0.062 0.058 0.047 0.109 0.069 0.073 0.144 0.038 0.061 0.158B7 0.103 0.072 0.046 0.052 0.129 0.098 0.054 0.075 0.044 0.054 0.048 0.029 0.055 0.062 0.098 0.069 0.027 0.033 0.073B8 0.108 0.145 0.061 0.142 0.134 0.141 0.114 0.094 0.054 0.058 0.072 0.040 0.144 0.114 0.072 0.137 0.031 0.078 0.163B9 0.083 0.135 0.080 0.074 0.121 0.127 0.112 0.121 0.036 0.092 0.090 0.047 0.074 0.063 0.054 0.076 0.020 0.053 0.123B10 0.037 0.065 0.070 0.044 0.104 0.062 0.049 0.053 0.035 0.033 0.073 0.066 0.051 0.062 0.044 0.090 0.025 0.086 0.058B11 0.057 0.092 0.076 0.052 0.124 0.064 0.063 0.062 0.043 0.051 0.030 0.050 0.051 0.044 0.046 0.060 0.026 0.052 0.070B12 0.051 0.114 0.035 0.053 0.109 0.106 0.091 0.068 0.052 0.086 0.051 0.025 0.087 0.076 0.047 0.092 0.023 0.070 0.106B13 0.060 0.113 0.031 0.116 0.115 0.114 0.104 0.138 0.040 0.039 0.036 0.033 0.061 0.101 0.068 0.095 0.047 0.078 0.119B14 0.087 0.121 0.042 0.133 0.129 0.111 0.105 0.130 0.072 0.066 0.057 0.058 0.125 0.058 0.072 0.096 0.028 0.084 0.127B15 0.054 0.076 0.044 0.059 0.107 0.123 0.135 0.116 0.039 0.039 0.037 0.034 0.093 0.049 0.038 0.076 0.029 0.049 0.109B16 0.054 0.128 0.048 0.078 0.117 0.119 0.109 0.130 0.040 0.040 0.074 0.043 0.102 0.083 0.053 0.062 0.025 0.078 0.121B17 0.037 0.090 0.054 0.054 0.108 0.073 0.097 0.069 0.028 0.062 0.058 0.090 0.093 0.074 0.033 0.058 0.016 0.050 0.062B18 0.027 0.042 0.025 0.042 0.099 0.030 0.028 0.037 0.022 0.082 0.026 0.027 0.047 0.031 0.029 0.040 0.021 0.022 0.036B19 0.058 0.076 0.034 0.064 0.108 0.126 0.070 0.131 0.045 0.039 0.044 0.041 0.103 0.083 0.079 0.115 0.029 0.048 0.066

Table 6The degree of prominence and net cause/effect values.

Barriers R sum D sum R + D R–D

B1 1.3006 1.3721 2.6727 �0.0715B2 1.8077 1.9567 3.7645 �0.1490B3 1.7255 1.0118 2.7373 0.7136B4 1.8365 1.6359 3.4725 0.2006B5 2.4611 2.2461 4.7072 0.2151B6 1.6797 1.9502 3.6299 �0.2706B7 1.2206 1.8463 3.0669 �0.6257B8 1.9015 2.0821 3.9836 �0.1807B9 1.5821 0.9914 2.5736 0.5907B10 1.1064 1.2288 2.3352 �0.1223B11 1.1136 1.1515 2.2651 �0.0379B12 1.3440 0.9031 2.2471 0.4409B13 1.5085 1.7135 3.2220 �0.2050B14 1.7005 1.5080 3.2085 0.1924B15 1.3040 1.1686 2.4726 0.1354B16 1.5055 1.7865 3.2921 �0.2810B17 1.2067 0.5777 1.7844 0.6291B18 0.7117 1.2226 1.9343 �0.5108B19 1.3594 2.0227 3.3821 �0.6633


operational level. The barrier with the highest net cause value is B3 (import of used automobiles or their parts is forbidden),followed by B17 (lengthy and undependable delivery time of remanufactured engines due to poor inventory management),B9 (lack of an accepted and easy to use registration system for remanufactured engines) and B12 (arrival time and quantityof used engines are uncertain).

To avoid potential bias due to the weight assignments for the three reviewers, a sensitivity analysis is completed. Thesensitivity analysis results are shown in Fig. 3. The process of sensitivity analysis involved altering the weight put on Eval-uator 1, while maintaining an equal weight for Evaluators 2 and 3. For example, in Fig. 3A (Condition A), a weight of 0.40 wasassigned to Evaluator 1, which results in a weight of 0.3 each for Evaluators 2 and 3, respectively. For Figs. 3B (Condition B),3C (Condition C), and 3D (Condition D), respectively, weights of 0.45, 0.55 and 0.60 were assigned to Evaluator 1. When com-pared to Fig. 2, there seems to be no significant difference appearing in Fig. 3.

To determine the level of difference, the baseline condition is compared to each of the four conditional scenarios (A–D)using the Euclidean distance differences of prominence–causal relationships for all 19 barriers. The final results of this dis-tance evaluation is shown in Fig. 4, and all Euclidean distance difference values are lower than 0.35 for Condition A and lowerthan 0.15 for Conditions B, C and D. Thus, we can conclude that the bias related to weights assignment is not a major issueand that there was relative consistency and robustness in the overall relationship evaluations.

4.2. Discussion

The significance of the barriers identified as high prominence and/or high in net cause or net effect are analyzed in thenext two subsections.

Fig. 2. An overall DEMATEL prominence–causal relationship diagram.

Fig. 3. Sensitivity analysis DEMATEL prominence–causal graphs.


4.2.1. Remanufacturing implementation barriers with the high prominence valuesBarriers with the high prominence values greatly affect other barriers and/or are greatly affected by other barriers. That is,

they are central and well networked barriers. These barriers are the ones that should be addressed in the short run and needto be the focus of managers and/or policy makers. The four barriers with the highest prominence values are all at the

Fig. 4. Euclidean distance of prominence–causal results for sensitivity analysis.


strategic (governmental) level, which indicates that more efforts are needed by the Chinese government and authorities insupporting remanufacturing.

Remanufacturing implementation barrier B5 (Lack of strong financial support for remanufacturing technology develop-ment or equipment update) has a significantly higher prominence value (4.7022) than all the other barriers. Technologydevelopment and equipment updates are key for truck engine remanufacturing demand in China (Xu, 2009). Compared todeveloped countries, returned used engines in China are low in quality due to more wear from the longer driving distanceof trucks in poor driving conditions and limited transportation infrastructure. As a result, it is more difficult to remanufacturethese used engines, and more flexible, advanced technologies and equipment are needed. The Chinese government approvedeight companies to remanufacture automobile parts as demonstration projects in 2008, and provided financial support forthese demonstration remanufacturers. However, more financial support is needed to promote remanufacturing in the coun-try. The Chinese government has discussed measures to provide financial support for purchase of remanufactured products.These incentives may provide substantial motivation for further development of a remanufacturing market. However, thedetermination the amounts for these incentives and/or subsidies for each purchase are difficult to estimate. Also whetherthe subsidies and incentives should be targeted to either remanufacturers or consumers is an open question. Interestingly,the factor that seems to influence this barrier is B3 (Import of used automobiles and their parts is forbidden). According tothe evaluators this situation influences the lack of financial support and technology. Imported engines may provide a higherquality source of ‘raw material’ for remanufacture, thus the costs and technological requirements may be lessened.

An additional three strategic barriers also have high prominence values. One barrier is about supply of used engines,while the other two concern sales of remanufactured engines. In China, more than 60% of used trucks are sold to rural areasor second-handed markets (Zhang et al., 2011). As a result, registered remanufacturers are unable to obtain adequate usedengines and hence remanufacture engines efficiently. Two implementation barriers about sales of remanufactured enginesare both related to quality. A previous study confirmed that remanufactured products in China possess similar quality as newproducts (Hou and Li, 2009). However, the Chinese government needs to develop quality standards for evaluating remanu-factured engines and promote it to consumers.

4.2.2. Remanufacturing implementation barriers with high net cause-effect valuesBarriers with the high cause-effect values indicate that they are the basic causal factors which should be overcome in the

end. Two of four barriers with high cause-effect values are at strategic level, and the other two are at operational level.B3 (import of used automobiles or their parts is forbidden) has the relatively highest cause-effect value. On February 14,

2006, National Development and Reform Commission, Ministry of Science and Technology and Ministry of EnvironmentalProtection (called as ‘‘State Environmental Protection Agency’’ at that time) publicized ‘‘Policies for Automobile ProductsRecycling and Reuse Technologies’’, which clearly forbids import of used automobile parts for remanufacturing purposeexcept for those imported automobiles. This implementation barrier is fundamental and it can bring many remanufacturableautomobile parts if import is permitted. However, to avoid potential issues such as the safety problem without proper treat-ment of used automobile parts, the Chinese government would continue to strictly control import of used automobiles andtheir parts.


The other strategic barrier is B9 (lack of an accepted and easy to use registration system for remanufactured engines).Many local governments are not familiar with remanufactured engines, and thus they prohibit the legal change of enginenumber (Zhang et al., 2011). To ease this barrier, the central governmental should take a lead to diffuse the concept ofremanufacturing and encourage or even mandate local governmental to support sales of remanufactured products. At thesame time, strict quality standards are needed for remanufactured products.

The first operational barrier with a high cause-effect value is B17 (lengthy and undependable delivery time of remanu-factured engines due to poor inventory management). Remanufacturers such as JFP have realized the importance to shortendelivery time. For example, JFP has worked on identifying some local central centers from their partners of maintenance sta-tions and 4S centers. Based on the forecast of local demand, JFP has begun to keep inventory for remanufactured engines.

The second operational barrier is B12 (arrival time and quantity of used engines are uncertain). Manufacturers shouldcollect data to predict potential quantity of used engines at a certain time. However, governmental policies and supportare even more important for this initiative to succeed. For example, if the Chinese government can take complete controlof the second-handed market, it will become easier for remanufacturers to predict the quantity of forthcoming returnedproducts. Moreover, remanufacturers in China can get more used products.

4.3. Theoretical Implications and Insights

Results from this study point to some initial theoretical relationships amongst strategic (external) forces, and internaloperational activities and capabilities. The initial relationships can be further evaluated using broader empirical studies. Thisinitial study sets the foundation for the factors and their relationships. One of the major findings, from a research perspec-tive, is that the industry needs to first work with policy makers and feels that policy drives much of what China and itsplanned economy can do for remanufacturing, at the initial remanufacturing development stage. The policy concerns seemto focus more on the demand and supply of remanufactured products at a broad-based economics level. This may be a sit-uation where regulatory exchange (strategic) and relational situations (supply chain management) clearly play interactiveroles. These theoretical suppositions need further investigation.

The role of global remanufacturing and recycling markets with respect to big engines and equipment within China arelimited. That is, the remanufacturing industry in China is isolated from the broader international markets for productsand materials. This lack of globalization, at a macro-economic level, points to a need for international business theory to helppotentially explain why this market on an international level is limited and ostensibly stagnant. Other barriers may requireunderstanding the role of consumer and marketing behavior. Evidently, remanufacturing diffusion in China is not based ontechnological know-how, but more so on regulatory structure. Additional theoretical investigation on whether economictheory or organizational theory is more prominent in explaining the remanufacturing industry barriers and phenomena isan area for further research.

5. Conclusions

Remanufacturing can bring environmental performance such as energy saving and emission reduction, but challengesexist for remanufacturing in China (Xu et al., 2012a). Different from ordinary manufacturing practice, a remanufacturer facesmore complicated supply chain relationships since it needs to purchase used products from consumers and sell remanufac-tured products through retailers (Ostlin et al., 2008). These limitations include many uncertainties and are similar to reverselogistics operations (Bai and Sarkis, 2013). Thus, a truck engine remanufacturer faces barriers throughout the entire supplychain stages of a remanufactured product, ranging from sourcing of used engines, and remanufacturing activities, to salesand use of remanufactured engines. Governmental regulations on extended producer responsibility and policies such as sub-sidies for remanufacturers can positively affect the remanufacturing industry, helping to reduce uncertainties and barriers(Bernard, 2011). Conversely, barriers of truck engine remanufacturing can come from not only operational but also strategic(governmental) levels.

There are a number of policy implications that can be initially developed based on the exploratory results and perspec-tives of this study. The Chinese government has made efforts to promote remanufacturing (Xie, 2011). During the EleventhFive-Year period (2006–2010), the Chinese government initiated demonstration projects for remanufacturing, and formu-lated normative documents. During the Twelfth Five-Year period (2011–2015), the Chinese government has further pro-moted remanufacturing by the normative guidance, the second-round demonstration projects, industry regionalassembling, technology innovation, and system construction. In addition to these efforts, the Chinese government shouldcontrol used vehicle returns to second-hand and informal economy markets. Developing and disseminating (enforcing) qual-ity standards for evaluating remanufactured engines is also a necessary policy instrument. A single organization is unable tocomplete this activity in China, and professional industrial organizations on remanufacturing are too immature to offer legit-imacy for an industry led effort.

Chinese remanufacturers have struggled to produce high quality remanufactured products. Delivering remanufacturedengines to consumers on time is a basic challenge that should be overcome for remanufacturing to succeed. Remanufacturershave worked on optimizing their distribution channels by a central inventory management system in one region. Manufac-


turers have also tried to forecast the arrival time and quantity of used engines, but it is very difficult and requires excessiveefforts.

This study identifies numerous barriers and their relationships for truck engine remanufacturing from the supply chainperspective. We further identify the most important as well as the basic barriers by examining cause-effect relationshipsamong barriers. There are several directions that are worthy for further study. First, the effectiveness for governmental pol-icies on promoting remanufacturing, is an open policy and research question. This study should be replicated over time andat a broader level to determine if there is a shift in the prominence and relationships amongst the barriers. We examinedrelationships of barriers based on perspectives of three evaluators in a leading remanufacturer, although a large and influ-ential organization. Expanding the context of barriers to include governmental officials or people from remanufacturing sup-ply chains such as maintenance stations or 4S centers may allow for a broader and possibly different understanding.

Four strategic barriers with the high prominence values and two strategic barriers with high cause-effect values are iden-tified. Overcoming such implementation barriers are a major issue that still requires additional investigation. The Chinesegovernment has tried to develop and promote extended producer responsibility policies in the automobile industry. Suchpolicies can encourage manufacturers to design for remanufacturing. But what is the evolutionary mechanism for such pol-icies? In this case, econometric, economics, and game theoretic formal models that can identify how various policies mayinfluence corporate decisions and strategy can be developed.

From an organizational theory and strategic competitiveness perspective, additional investigation can provide ampleinsights. For example, some Chinese remanufacturers have worked on remanufacturing for years and they have becomeexemplary demonstration companies in China. A broad industry question is whether these leaders in innovation havefirst-mover benefits? Have the diffusion mechanisms to diffuse their experiences to other remanufacturers been successful?

These many questions still exist for remanufacturers. This industry requires significantly more investigation. The influ-ence of broad economic/governmental policy and its interactions with organizational capabilities (barriers) are only a firstand important step in understanding the remanufacturing industry in China. With China’s (and many emerging economynations’) resource depletion and environmental burdens, remanufacturing may allow a way to alleviate these burdens.Understanding politically, economically, and organizationally, becomes critical. This study provides initial research to helpidentify potential issues that need to be addressed and directions for future research.

Acknowledgements

This work is supported by the National Key Basic Research Program of China (973 Program, 2011CB013406), a grant fromNational Science Fund for Distinguished Young Scholars (71025002), the National Natural Science Foundation of China Pro-jects (71033004) and the Major Program of the National Social Science Fund of China (13&ZD147). Lai is supported by theHong Kong Special Administration Region, China (GRF 5455/11).

Appendix A. Definitions of barriers

External barriers
Definitions and explanations
B1: Regulatory policy requires vehicle assemblies to bereturned to metals recyclers

According to ‘‘Management rules of end-of-life vehiclestake-back’’ issued by the State Council of China in June of2001, five assemblies including engine, steering gear, foreaxle, back axle, and chassis frame are required to be returnedto metals recyclers

B2: Used trucks are sold to secondary markets never toreturn to the original vehicle supply chain

Most used trucks are sold to developing areas in China,which results in inadequate source of remanufacturabletruck engines

B3: Import of used automobiles or their parts isforbidden

China forbids imports of used vehicle parts including usedengines, which results in inadequate source ofremanufacturable truck engines

B4: Lack of technical standards and specifications forremanufacturing

China has not established technical standards andspecifications for remanufacturing, which should includeremanufacturing technical principles, used parts test andevaluation technology standards, remanufacturing processand technology specifications and remanufacturingmanagement standards

B5: Lack of strong financial support for remanufacturingtechnology development or equipment update

China lacks preferable policies for remanufacturing, and thusremanufacturers do not receive enough governmental

(continued on next page)


Definitions of barriers (continued)

External barriers
financial support or incentives
B6: Lack of information and support for quality
guarantees for remanufactured engines
The quality of remanufactured engines is guaranteed.However, such information is not disseminated toconsumers and thus consumers are suspicious about thequality of remanufactured engines
B7: Lack of information about performance on resourcessaving and environmental protection from thepractice of remanufacturing

Exhibitions on remanufacturing technologies, products andprocessing equipment and forums on remanufacturingindustry are very few. There are also very little marketing ofremanufactured products in vehicle maintenance stationsand 4S centers. The information on contribution ofremanufacturing to energy saving and emissions reductionis not disseminated. Thus, consumers even withenvironmental awareness may not be aware ofremanufactured products’ environmental benefits

B8: Lack of industrial standard for evaluating the qualityof remanufactured products

Standards for evaluating the quality of remanufacturedproducts do not exist. Thus, consumers are not confidentabout the quality of remanufactured engines

B9: Lack of an accepted and easy to use registrationsystem for remanufactured engines

A new car registration/engine registration is needed if aremanufactured engine is used in a vehicle. If an old engineis just repaired no new registration number is required.Thus, there is additional paperwork and cost forremanufactured engines to be introduced in older vehicles

B10: Taxes cannot be offset for used engines purchase
A manufacturer buy engines from a supplier. The value-added tax paid by the supplier can be deducted from the taxpaid by the remanufacturer. However, if the remanufacturerbuys the old engine from consumers through a retailer, thereis no deduction
B11: Used engines from different brands are not allowedto all be remanufactured

Remanufacturers exist for some brands but are non-existentfor other brands. Remanufacturable engines withoutremanufacturers for their brands cannot be remanufacturedsince the manufacturer is afraid that a remanufacturer forother brands will learn their technologies by disassemblingtheir engines during remanufacturing

B12: Arrival time and quantity of used engines isuncertain

When and how many used engines can be acquired are bothuncertain

B13: Quality of used engines is uneven and uncertain
Old engines are used in the different environment, and theused time and maintenance conditions are also various.Thus, quality of used engines is uneven and uncertain
B14: Engine manufacturers are reluctant to design forremanufacturing

A manufacturer does not consider design forremanufacturing

B15: Consumers have low environmental awareness
Chinese consumers have low environmental awareness.Thus, consumers may not prefer to buy remanufacturedengines even they understand the contribution ofremanufactured products to energy saving and emissionsreduction
B16: Low quality of superficially repaired engines sold inan illegal way destroys reputation of remanufacturers

Some companies simply repair old engines but they labeltheir superficially repaired engines as remanufactured ones.Low quality of these repaired engines seriously destroysreputation of remanufacturers

B17: Lengthy and undependable delivery times ofremanufactured engines due to poor inventorymanagement

Maintenance stations or 4S centers do not have reasonableinventory control for inventory quantity and categories. As aresult, consumers need long waiting time to buyremanufactured engines

B18: No reasonable pricing system exists forremanufactured engines

Remanufacturers do not have a reasonable pricing system. Ifthe price of remanufactured engines is too high, the salesnumber may be reduced. If the price is too low, the profit


Definitions of barriers (continued)

External barriers
will be lower
B19: Consumers concern about quality guarantee and
after-sales service for remanufactured engines
Remanufacturers provide similar warranty time and servicefor after-sales engines compared to new engines. Butconsumers worry about potential issues of remanufacturedengines after the warranty time is over
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