Decision making in remanufacturing: The role of product complexity

Do you know how complex are your products? I mean: do they have technical content, do they have complex component interfaces (recall radical vs. incremental innovations). Set aside frequent vs. rare technological changes, which are urged by technological uncertainty, look inside the engineering of your product. Let's say they are complex, how does this complexity could affect your remanufacturing activities?

High technical & engineering content, complex component interfaces* and high systemic architectures** make products complex. This is not the most exhaustive list of variables that defines how complex your products are, but these variables relates with remanufacturing most: from the perspectives of disassemly, test, IP and re-assembly. Complexity in products impact remanufacturing practices in many ways.

First, increasing complexity in the products requires more skilled labor and know-how to disassembly, and test. Therefore, the effects of learning-by-doing become higly important and dependency on labor arises (see the discussion on human asset in this post). Second, product complexity creates a variety of transaction costs, such as the coordination costs between design and disassembly, and testing and remanufacturing. Imagine all these recurring coordination happening between you and many suppliers in charge of remanufacturing your product. And I’m not even touching the issue of IP content in the product and risk of leaks.

Therefore if you are remanufacturing highly complex products, you may want to capture the benefits of your investment in the skills needed for remanufacturing and reduce the costs of coordinating development and production of complex designs by performing remanufacturing activities in-house or vice versa. However, also be cautious: do consider other variables, do consider firm-. industry-specific factors, do care about the big picture of your remanufacturing operations.

*the way components and subsystems connects and interacts with each other to form the product.

**systemic architecture means product is comprised of many subsystems and components.