Enhancing Circular Practices in the Automotive Manufacturing Industry Exploring Opportunities and Challenges of Remanufacturing Electronic Control Units (ECUs) Vivian Ambiado Master’s Degree Project in Innovation and Industrial Management Graduate School University of Gothenburg Spring 2023 Supervisor: Hani Elzoumor Abstract This thesis examines the transition to a circular economy in the Swedish automotive manufacturing industry, with a specific focus on the implementation of remanufacturing for Electronic Control Units (ECUs). The study aims to identify opportunities and challenges associated with remanufacturing ECUs by considering product characteristics, strategic and business aspects, and the industrial and regulatory environment. A qualitative case study approach is adopted, focusing on Company A, a manufacturer operating in the Swedish automotive sector. Interviews with professionals from the organization are conducted, and their responses are thematically analyzed. The findings of the study highlight several opportunities for remanufacturing ECUs, including the high quality of components, increased demand for ECUs, sustainability benefits, cost savings, and compliance with regulations and industry trends. However, the analysis also reveals various challenges, such as the complexity and sensitivity of ECUs, diagnostic processes, cybersecurity requirements, quality risks, low customer acceptance, and stringent industrial and regulatory barriers. Notably, the study emphasizes the opportunities associated with the characteristics of ECUs, providing a more balanced perspective compared to the literature review's predominantly challenging scenario. Still, the significant barriers posed by the industrial and regulatory context may hinder the successful implementation of remanufacturing systems. The insights provided by this study have practical implications for automotive manufacturers in Sweden, offering guidance for their strategic approach to circular practices, particularly in the context of remanufacturing ECUs. By addressing the identified challenges and capitalizing on the opportunities, manufacturers can pave the way towards a more sustainable future. Keywords Circularity, sustainability, remanufacturing, repair, ECUs, automotive industry, manufacturer, strategy. Acknowledgement I would like to express my sincere gratitude to my contact person in Company A for their invaluable support and collaboration. Their guidance, introduction to the organization and industry, and assistance in accessing professionals within the company have been instrumental in the successful development of interviews and data collection for this research. I am deeply grateful to all the respondents who generously contributed their time and insights to participate in this study. Their willingness to share their knowledge and experiences has been invaluable, and without their participation, this research would not have been possible. I would like to extend my appreciation to my supervisor, Hani Elzoumur, for his continuous guidance, constructive recommendations, and unwavering patience throughout the entire research process. His expertise and support have been invaluable in shaping the direction and quality of this thesis. I am also indebted to the School of Business, Economics and Law at Gothenburg University for providing access to extensive databases, which facilitated a comprehensive literature review. Additionally, I would like to thank the Innovation and Industrial Management program for equipping me with the necessary knowledge and tools applied in this research project. Vivian Ambiado List of Abbreviations ECUs Electronic Control Units CE Circular Economy ASIL Automotive Safety Integrity Level CR Contracted Remanufacturer ELV End-of-Life Vehicles directive EoL End-of-Life EPR Extended Producer Responsibility HV Heavy Vehicles HW Hardware IR Independent Remanufacturer LV Light Vehicles OEM Original Equipment Manufacturer Reman Remanufacturing SW Software WEEE Waste Electronic and Electric Equipment Contents 1. Introduction ...................................................................................................................... 1 1.1. Theoretical Background ............................................................................................. 1 1.1.1. Circular strategies and their application in the Automotive Industry ................... 2 1.2. Empirical Background ............................................................................................... 3 1.2.1. Company A’s Case: ECUs scrapping ................................................................. 3 1.2.2. Company A Drivers for Remanufacturing .......................................................... 4 1.3. Research Objective and Research Questions .............................................................. 4 1.4. Delimitations ............................................................................................................. 5 1.5. Thesis Structure ......................................................................................................... 5 2. Theoretical Framework ..................................................................................................... 6 2.1. Circular Strategies and Remanufacturing ................................................................... 6 2.2. The Automotive Industry and the remanufacturing market ......................................... 8 2.3. Opportunities and Challenges for the implementation of remanufacturing in the Automotive Manufacturing Industry ...................................................................................... 9 2.3.1. Opportunities of Remanufacturing for the Automotive Industry .......................... 9 2.3.2. Opportunities of Remanufacturing ECUs ......................................................... 10 2.3.3. Challenges of Remanufacturing for the Automotive Industry ............................ 11 2.3.4. Challenges of Remanufacturing ECUs ............................................................. 14 3. Methodology ................................................................................................................... 14 3.1. Research Approach and Philosophical Assumptions ................................................. 14 3.2. Research Strategy .................................................................................................... 15 3.3. Research Design ...................................................................................................... 16 3.4. Systematic Literature Review .................................................................................. 17 3.5. Data Collection ........................................................................................................ 18 3.5.1. Primary Data Collection ................................................................................... 18 3.5.2. Secondary Data Collection ............................................................................... 20 3.6. Data Analysis .......................................................................................................... 20 3.7. Methodology motivation .......................................................................................... 20 3.8. Quality Criteria and Reflections about potential challenges ...................................... 21 3.8.1. Internal and External Reliability ....................................................................... 21 3.8.2. Internal and External Validity .......................................................................... 21 4. Empirical Findings .......................................................................................................... 22 4.1. Company A's approach to circularity and organizational capabilities ........................ 22 4.1.1. Company A’s circularity goals and initiatives ................................................... 22 4.1.2. Company A’s capabilities ................................................................................ 23 4.2. Opportunities for Remanufacturing .......................................................................... 24 4.2.1. Opportunities from ECUs characteristics .......................................................... 24 4.2.2. Strategic and Business Opportunities ................................................................ 26 4.2.3. Industrial and Regulatory Context Opportunities .............................................. 27 4.3. Challenges for Remanufacturing .............................................................................. 28 4.3.1. Challenges from ECUs characteristics .............................................................. 28 4.3.2. Strategic and Business Challenges .................................................................... 30 4.3.3. Industrial and Regulatory Context Barriers/Threats .......................................... 31 5. Discussion ....................................................................................................................... 32 5.1. Main Remanufacturing Opportunities from Literature Review and Data Collection .. 32 5.1.1. Main opportunities from ECUs characteristics .................................................. 33 5.1.2. Main opportunities from strategy and business approaches ............................... 33 5.1.3. Main opportunities from the industrial and regulatory context .......................... 34 5.2. Main Remanufacturing Challenges from Literature Review and Data Collection ...... 34 5.2.1. Main challenges from ECUs characteristics ...................................................... 34 5.2.2. Main challenges from strategy and business approaches ................................... 35 5.2.3. Main challenges from the industrial and regulatory context .............................. 36 5.3. Remanufacturing implementation in Company A ..................................................... 37 5.3.1. 1st Stage: Testing remanufacturing activities ..................................................... 38 5.3.2. Further stages: Remanufacturing strategy ......................................................... 40 6. Conclusions .................................................................................................................... 42 6.1. Answering the Research Questions .......................................................................... 43 6.1.1. Main opportunities for manufacturers in the automotive industry in the implementation of remanufacturing systems for ECUs..................................................... 43 6.1.2. Main challenges for manufacturers in the automotive industry in the implementation of remanufacturing systems for ECUs..................................................... 44 6.1.3. Company A’s capabilities for remanufacturing and proposed actions for its implementation ............................................................................................................... 45 6.2. Implications and contributions ................................................................................. 45 6.2.1. Theoretical implications ................................................................................... 45 6.2.2. Practical implications ....................................................................................... 46 6.3. Limitations and recommendations for future research .............................................. 46 References .............................................................................................................................. 48 Appendices ............................................................................................................................. 50 Appendix A ........................................................................................................................ 50 Appendix B ......................................................................................................................... 51 Appendix C ......................................................................................................................... 52 Appendix D ........................................................................................................................ 54 Appendix E ......................................................................................................................... 55 Appendix F ......................................................................................................................... 56 Appendix G ........................................................................................................................ 57 Appendix H ........................................................................................................................ 58 Appendix I .......................................................................................................................... 59 1. Introduction The introduction section of this thesis provides a comprehensive overview of the research. It begins with a theoretical background that explores the Circular Economy and their application in the Automotive Industry, while the empirical background focuses on the specific case of Company A. The research objective and research questions are then presented, followed by delimitations and an outline of the thesis structure. This section sets the stage for the subsequent chapters, establishing the context and objectives of the study. 1.1. Theoretical Background The global pressures that societies are facing today regarding sustainability challenges are undeniable. The world population growth, the improvement in the living standards, the associated increase in the use of resources, among other human activity consequences, have generated increasingly evident effects on the planet's environment and climate (Nyström, 2019; Rockström et al., 2009). On that regard, governments, companies, and organizations have been rethinking their strategies and taking strict measures to minimize the negative impact of their operations and thus guarantee a sustainable future (Independent Group of Scientists appointed by the Secretary- General, 2019). The Circular Economy (CE) has been presented as an alternative solution to achieve environmental and economic sustainability through the efficient use of the resources and the management of the waste (Korhonen, Honkasalo, & Seppälä, 2018; Stahel, 2019). It is defined as “an economic system without waste, running on renewable energy, and where the value of products, materials, and resources is maintained in the economy as long as possible by firms that capitalize on their already sold stock of accumulated resources in the form of products, turning today’s river economy into a lake and loop economy” (Nyström, 2019, p. 15). In the literature, the authors describe the CE as coinciding with one of the main objectives of companies, the generation of profitability, and it does so by promoting the efficient use of resources utilized in production, minimizing waste, and thus also generating savings in costs (Bocken, de Pauw, Bakker, & van der Grinten, 2016; Gunasekara, Gamage, & Punchihewa, 2021; Korhonen et al., 2018; Nyström, 2019; Shao, Huang, Lemus-Aguilar, & Ünal, 2020). The promise of profitability through CE has generated the high popularity of the concept, and both governments and businesses have begun implementing its strategies in their policies and operations. The automotive industry, one of the most important for Sweden (Pohl, 2017) has not lagged behind on that pursue. In fact, Volvo has committed to being a circular company by 2040, with clear goals toward 2025. Consequently, they are demanding the same commitment, regarding liability and transparency, from its suppliers (Volvo Cars, 2023). Therefore, for the Swedish automotive manufacturing industry, the implementation of the CE has become imperative, since it would allow them to respond to the pressures of their stakeholders, to the new European regulations on environmental sustainability, and to the expectations of some of their clients. However, the automotive industry has historically been characterized by a linear economic paradigm with the "take, make, dispose" system, resulting in the high negative impacts on the environment already mentioned (Bocken et al., 2016; Nyström, 2019). The high fixed costs, and levels of overcapacity necessary to operate in this market, have promoted and established as a 1 requirement planned obsolescence strategies among automotive manufacturers (Nieuwenhuis & Wells, 2003; Nyström, 2019; Urbinati, Franzò, & Chiaroni, 2021). As some authors explain it, “to be profitable, car manufacturers need to reach a faster-then-ever replacement rates, which means drastic short product lifespan and low-quality components” (Urbinati et al., 2021). This illustrates why the transition to circularity has not been easy or fast for the automotive industry, presenting clear challenges for business, but also opportunities for competitive advantage and sustainable leadership. 1.1.1. Circular strategies and their application in the Automotive Industry The application of circularity has been reflected through the implementation of four main strategies that are: reuse, repair, remanufacture and recycle, which together allow both extending the product’s life, and closing the loop of material use (Bocken et al., 2016; Kalverkamp & Raabe, 2018; Korhonen et al., 2018; Stahel, 2016). In the automotive industry, these strategies have been presented to companies through regulations and directives. The European Union adopted the End-of-Life Vehicles (ELV) directive in 2000 to promote component and raw material reuse and recycling in the automotive industry. By 2006, the directive aimed for a minimum recovery and recycling rate of 85%, increasing to 95% by 2015 (Amelia, Wahab, Che Haron, Muhamad, & Azhari, 2009; Dantec, 2005). Overall, the implementation of the directive has been mostly successful in achieving the proposed objectives (Eurostat, 2020). However, some authors argue that the sector has primarily focused on recycling strategies to meet sustainability goals, with repair and remanufacture playing a smaller role (Dantec, 2005; Gerrard & Kandlikar, 2007; Xu, Fernandez Sanchez, & Njuguna, 2014). Remanufacturing is a specific circular strategy that allows for the repair of a product while maintaining the same quality performance as the original (Amelia et al., 2009; Colledani, Copani, & Tolio, 2014; Gerrard & Kandlikar, 2007; Korhonen et al., 2018; Xu et al., 2014). It is considered more sustainable and profitable than recycling, presenting a "win-win-win" scenario compared to traditional manufacturing. Remanufacturing offers cost savings for manufacturers, more affordable prices for customers, and reduces negative environmental impact (Gunasekara, Gamage, & Punchihewa, 2018; Sundin & Dunbäck, 2013), thereby providing strong incentives for its development. Additionally, the automotive manufacturing industry has been historically distinguished for being a resource-intensive sector, from energy, to material and human resources (Dantec, 2005; Nieuwenhuis & Wells, 2003). The scarcity of resources and raw materials for production is not a new challenge for this industry, however not a permanent solution has been established yet, providing urgency to the matter of finding one. As we all know, the deployment of our resources is another sustainability challenge of our days, offering an additional incentive for the implementation of remanufacturing techniques among manufacturers since it will allow for the reutilization of materials (Casper, 2021; Dantec, 2005; Gunasekara et al., 2021; Parker et al., 2015). Consequently, manufacturing companies in the automotive sector have realized the potential behind the implementation of remanufacturing strategies, seeking support in academia to generate the transition to circularity. 2 1.2. Empirical Background This section provides comprehensive information about the specific case of Company A and its potential transition to circular practices. All the information presented here was shared with the researcher by her contact person within the organization, who also conceived the idea for this project. "Company A" is a multinational company that operates as Tier 1 supplier to Original Equipment Manufacturer (OEM) in the automotive industry. Although Company A is also considered an OEM, the term is commonly used to refer to the final vehicle assembler, such as Volvo Cars. Please refer to Figure 3 in Appendix A for a graphical representation. Company A is confronted with the challenge of transitioning to circular practices. This shift is primarily motivated by the sustainability requirements imposed by important customers like Volvo Cars in Sweden. Volvo has established environmental responsibility and transparency goals for its suppliers, prompting the transition. Additionally, European sustainability regulations further contribute to the drive for change. However, the motivation for this transition goes beyond meeting these requirements. The company is also compelled to explore repair and remanufacturing systems for its Electronic Control Units (ECUs) to address the global shortage of semiconductors. Currently, a significant number of ECUs are discarded due to "malfunctioning," a common industry practice driven by the cost of managing faulty items. Acquiring the necessary materials for production through negotiations with suppliers is an ongoing concern for the company. In addition to these factors, there are legal and safety implications, as well as opportunities for greater participation and competitiveness in the remanufacturing market, that serve as further motivation for Company A. While automotive component remanufacturing activities are not new to the industry, they are typically carried out by third-party remanufacturers contracted by OEMs or independent remanufacturers. This arrangement increases the risks of intellectual property loss and cybersecurity attacks on the ECUs' software components since they are handled by external entities. Moreover, in the event that a remanufactured part from an external party encounters an issue and causes an accident, it is Company A's reputation that will be at stake due to the unchangeable labels added to each ECU. 1.2.1. Company A’s Case: ECUs scrapping The ECUs represent one of Company A's product lines, which has been greatly affected by the global scarcity of semiconductors supply, triggered in part by the pandemic, affecting its production projections and commitments to its customers. However, a significant part of these units is discarded for reasons of "malfunctioning". The failure of an ECU can be detected at three different stages in the supply chain: when the Tier 1supplier, in this case Company A, tests the ECUs; when the OEM, for example Volvo, tests its products; and when the end customer perceives a malfunction of her/his vehicle. In all cases the procedure to follow is similar. One tenth of the parts that were detected as faulty are sent for fault analysis with the supplier to determine the reasons for their malfunction. Regardless of the reasons found, the pieces are discarded. The other 90% of failed ECUs are directly scrapped, which is a common practice in the industry for reasons related to the cost of managing malfunctioning parts. Only a tenth of the parts are sent to fault analysis because this process has a cost for everyone involved in the value chain, even when, clearly, the products’ warranties cover most of them for 3 the customers. The main costs would be associated with the return of the parts to the supplier, and the fault analysis process. See Figure 4 in Appendix A for flowchart showing the current ECUs fault analysis process. Based on its fault analysis, Company A has made rough estimations regarding the malfunctions of ECUs. It appears that approximately 90% of the ECUs experience malfunctions due to software reasons, while roughly 6% show no apparent failures. In about 2% of the cases, the cause of failure cannot be determined, and in another 2%, the failure is believed to be related to hardware issues. The company emphasizes that remanufacturing ECUs with software-related malfunctions is a relatively simpler and less expensive process compared to dealing with hardware issues. Furthermore, it is suggested that the 6% of ECUs exhibiting no apparent failures may be linked to mishandling or installation mistakes made by the customers (OEMs). Consequently, the recovery of these units is also expected to involve relatively low costs for Company A. 1.2.2. Company A Drivers for Remanufacturing In Company A, there are various motivations for the transition to circularity and the implementation of a remanufacturing system. These motivations are driven by several factors, including sustainability, shortage of materials for production, market share and competitiveness, and profitability. Sustainability is a significant driver for Company A. The company aims to comply with the regulations set by the European Union for automotive companies, as well as meet the sustainability and circularity objectives of their important clients. Embracing remanufacturing allows them to demonstrate social and environmental responsibility towards their stakeholders. The global shortage of semiconductors has led Company A to explore the reuse of ECUs that are currently being discarded. By repurposing these components, the company can address the shortage of materials and ensure they have an adequate supply to maintain production levels and meet their commitments with clients. Market share and competitiveness are crucial considerations for Company A. While other players in the automotive industry dominate the remanufacturing market, automotive suppliers like Company A see great opportunities in remanufacturing. They have control over the engineering and design of the parts, ensuring higher quality compared to external actors who often rely on reverse engineering techniques. Offering remanufacturing services not only increases their competitiveness but also strengthens customer relationships by expanding their service offerings. Profitability is another driving factor for the implementation of a remanufacturing system. By minimizing the costs associated with acquiring new materials, reusing existing resources invested in component production, and reducing production waste, Company A has the potential to improve its overall profitability. Overall, these motivations highlight the multifaceted benefits that Company A expects to achieve through the transition to circularity and the adoption of a remanufacturing system. 1.3. Research Objective and Research Questions The objective of this research thesis is to study the transition from a linear economic paradigm to a circular one in the Swedish automotive manufacturing industry. This will be done through analyzing the opportunities and challenges associated with implementing a remanufacturing 4 system for Electronic Control Units (ECUs). To achieve this goal, the following research questions have been proposed. RQ1: What are the main opportunities for manufacturers of the automotive industry in the implementation of remanufacturing systems for ECUs? RQ2: What are the main challenges for manufacturers of the automotive industry in the implementation of remanufacturing systems for ECUs? 1.4. Delimitations The delimitations of this research will allow narrowing the scope and thus delve into a particular context. Given that the context of the automotive sector is varied and presents various actors, this research seeks to identify the opportunities and challenges that would arise for Tier 1 suppliers, incumbents in the market, although it is understood that remanufacturing systems could also be implemented in some suppliers further down the value chain. In the same way, since there are clear differences between the market for Light Vehicles (LV) and Heavy Vehicles (HV), such as trucks and buses, this research will refer to the market for LVs, and to the ECUs developed for this type of automobile. Additionally, this thesis work seeks to obtain a general and strategic vision of the implementation of remanufacturing, through the identification of opportunities and challenges in different organizational functions. This with the objective of evaluating how these opportunities and challenges would affect the business of Company A and its position in the markets. Technical specifications of remanufacturing processes will not be delved into, due to time restrictions and since they are beyond the expertise of the researcher. Similarly, the regulatory context will not be studied in depth, nor will compliance with the requirements for the implementation of remanufacturing, but they will be mentioned when relevant. Finally, it is important to mention that circularity and its application will be defined through four main strategies, already mentioned - reuse, repair, remanufacture and recycle - with the aim of differentiating remanufacturing as a technique with its own opportunities and challenges. However, nowadays, there are scholars presenting as many as 10 circularity strategies, and one that has recently gained more popularity is the "9 Rs Framework", which presents rethink, reduce, reuse, repair, refurbish, remanufacture, repurpose, recycle and recover as the circularity strategies (Potting, Hekkert, Worrell, & Hanemaaijer, 2017). Therefore, depending on the author, these strategies will vary slightly. Not all of them are delved into due to time and space limitations, and furthermore, their definition is not the objective of this investigation. 1.5. Thesis Structure The thesis structure consists of five sections guiding the research process and presenting findings. The Introduction provides an overview of the research topic, its significance, objectives, and questions. The Theoretical Framework explores relevant literature on circular strategies and its application in the automotive industry. The Methodology outlines the research design, data collection, and analysis methods. The Empirical Findings section presents results and analysis from primary and secondary data, including company reports and interviews. The Discussion section synthesizes findings, compares them with literature, and offers analysis. In the 5 Conclusions, research questions are answered, implications discussed, limitations addressed, and recommendations provided. Refer to Figure 1 for a graphical representation. Figure 1. Thesis Structure 2. Theoretical Framework The theoretical framework section of the thesis provides a comprehensive overview of the key concepts and theories that form the foundation for the research. It explores the existing literature on circular strategies and remanufacturing, and their application in the automotive industry, laying the groundwork for understanding the context and theoretical underpinnings of the study. The segment is divided into three subsections that will allow a better understanding of the concepts and the context surrounding this case study. First, the theoretical definitions of circularity, their strategies, and remanufacturing as one of them will be reviewed, providing the required clarity of these terms, in order to advance in the discussion. Then, it delves into the context of the automotive industry, its main players and its value chain, as well as information about the remanufacturing market and those who participate in it. These understandings also allow to advance in the discussion of opportunities and challenges for remanufacturing, having a clarity of the market context and its participants. Finally, a literary review is presented that identifies the main opportunities and challenges of this circular strategy, complementing with those particularly associated with ECUs. The value of doing this academic review of opportunities and challenges is that it provides us with a previous conception of them, before studying them in the particular case of Company A. Additionally, it will allow for comparison and assessment if the same opportunities and challenges identified from the literature, are relevant for Company A. 2.1. Circular Strategies and Remanufacturing Between the years 2000 and 2010, there seems to be a greater interest in the concepts of circularity and recovery of materials and products, probably driven by global concerns about sustainability and the introduction of new regulations, such as the Extended Producer Responsibility (EPR) and the Directive in Waste Electronic and Electric Equipment (WEEE). Through these directives, concepts such as End-of-Life (EoL) alternatives for product recovery began to be presented to industries to promote closed-loop economies and thus reduce the negative impact on the environment resulting from the common activities of companies and of the prevailing linear economic paradigm (Ijomah, Childe, & McMahon, 2004; King, Burgess, Ijomah, & McMahon, 2006). The EoL alternatives for product recovery, also understood as closed-loop strategies, are mainly four, and according to Ijomah et al. (2004), King et al. (2006) and Lundmark, Sundin, and Björkman (2009) these ones are: Repair, Recondition, Remanufacture and Recycle. The articles of the time focused on defining them in order to standardize them, and thus facilitate their industrial implementation, to differentiate them from each other, and to analyze their opportunities and benefits, recommending the most advantageous to achieve the goals of 6 businesses. King et al. (2006) identifies these strategies as complementary processes to the original manufacturing system. A representative illustration can be seen in Figure 2. Figure 2. Closed loop process trough repair, remanufacturing, or recycling. Adapted from King et al. (2006) The authors also define each of these strategies and explain their differences. In this regard, Repair is defined as a simple repair of a specific failure in a product. Recondition is the rebuilding or replacing of all major components that have failed or are close to failing in a product, even if the customer may not have noticed them (Ijomah et al., 2004; King et al., 2006). Finally, remanufacturing is defined as “the process of bringing a used product to like-new condition through replacing and rebuilding component parts” (Ijomah et al., 2004, p. 3). Additionally, "is the only process where used products are brought at least to original equipment manufacturer (OEM) performance specification from the customer’s perspective and, at the same time, are given warranties that are equal to those of equivalent new products” (King et al., 2006, p. 261). Recycling is, on the other hand, understood as the last alternative for the recovery of materials, since it would be applied to materials and products that have already been discarded, and therefore would not have any value in their current form (Ijomah et al., 2004; King et al., 2006). Walter R. Stahel, a recognized theorist in the formulation of the concept of circularity, describes recycling as the last step to close the loop in the materials flow (Stahel, 2016). Ijomah et al. (2004), King et al. (2006), Lundmark et al. (2009) and more recent authors such as Colledani et al. (2014) agree in that the implementation of remanufacturing systems would be a more convenient option than repair and recondition in economic terms, given that, by specifying that it returns to original performance characteristics, is highly desirable by customers. See Figure 5 found in Appendix B for an illustration of these conclusions by King et al. (2006). Additionally, remanufacturing is also considered a better alternative than recycling from an environmental standpoint, since, as explained by King et al. (2006), “recycling (using highly disordered material) requires more ‘corrective’ energy than remanufacturing (where the primary shape is preserved), which in turn requires more than reconditioning and repair (where most material and assembly are kept)” (p. 264). See Figure 6 in Appendix B for a graphic representation of the statements, where the smaller the circle the less demand of resources and energy, thus also more economical the strategy. However, the implementation of recycling systems has been among all the strategies reviewed the most popular in the industries (Golinska-Dawson & Kawa, 2011; King et al., 2006; Seitz & Peattie, 2004). King et al. (2006) also explain this phenomenon by arguing that until recently the regulations did not promote the responsibility of the producers after the product was sold, but since its recycling is independent of them, it became the dominant strategy. They also add that 7 recycling was established as an excuse for a sustainable practice that does not alter the current linear economic paradigm. It is from these conclusions that the authors also understand and foresee the possible challenges of implementing remanufacturing systems, despite their obvious advantages over other product recovery strategies; “remanufacturing is currently not without significant barriers. Reverse logistics, returning end-of-life products to a small number of locations, can be the biggest cost involved in remanufacturing” (King et al., 2006, p. 265). On the other hand, Ijomah et al. (2004) and Korhonen et al. (2018), realize about the lack of conceptualization and standardization of circularity strategies, affecting its implementation in the industry, and the technical and technological development of their procedures. Other commonly mentioned challenges for the implementation of remanufacturing are related to the supply of cores for remanufacturing regarding uncertainties in quantities, timing and quality (Lundmark et al., 2009), to the complexity of the production process (Colledani et al., 2014; Lundmark et al., 2009), and to profitability concerns (Colledani et al., 2014; Nyström, 2019). Common opportunities are related to the already mentioned resource efficiency and environmental impacts (Colledani et al., 2014; Ijomah et al., 2004; Lundmark et al., 2009), to costs savings (Colledani et al., 2014; King et al., 2006; Nyström, 2019), and to competitivity and increases in market share (Casper, 2021; Colledani et al., 2014). The opportunities and challenges identified in the literature will be described in greater depth and detail in section 2.3. These will be complemented with the particular opportunities and challenges for the remanufacturing of ECUs proposed by some academics. 2.2. The Automotive Industry and the remanufacturing market The automotive sector has evolved since its origins, in the level of complexity and interrelation of the entities that make it up (McKinsey&Company, 2016; Nieuwenhuis & Wells, 2003). The main players present in its value chain range from raw materials and component suppliers, to Original Equipment Manufacturers (OEMs), and to distributors and retailers. Among these actors, OEMs, play a main role, by generating products linked to a particular model and brand, allowing them to generate higher contribution margins associated with scale economies as well as the company’s reputation and image to the customers (Nieuwenhuis & Wells, 2003). Although remanufacturing activities are not new to the automotive industry, in fact, the automotive industry occupies the second place in turnover among the sectors performing remanufacturing in Europe, accounting for €7.4 billion by 2015, these businesses have been developed primarily in the aftermarket with Independent Remanufacturer (IR) which represents 48% of the market, or by third-party Contracted Remanufacturers (CR), with a 38% of the market share, leaving the OEMs with only a 14% of participation in remanufacturing activities (Bocken et al., 2016; Casper, 2021; Golinska-Dawson & Kawa, 2011). As OEMs and its Tier 1 suppliers are experts in the development and production of specific components for different car models, it would make sense that they also participate in their remanufacturing process, when a component does not work as expected or to extend its product’s life. Conversely, the other actors present in the market, such as CRs and IRs, have to, very often, perform reverse engineering to remanufacture automotive parts, which might compromise the quality of the products (Steinhilper, Rosemann, & Freiberger, 2006; Sundin & Dunbäck, 2013). This creates safety risks for the customers, but also legal and intellectual property considerations for the OEMs. 8 2.3. Opportunities and Challenges for the implementation of remanufacturing in the Automotive Manufacturing Industry This section will focus mainly on the opportunities and challenges for the implementation of remanufacturing processes in manufacturers of the automotive industry, and in particular how these ones could translate for the case of ECUs. This literature review aims to generate a theoretical framework that allows the understanding of the main opportunities and challenges of remanufacturing, to later analyze if these will have similar importance and value in the case of Company A. 2.3.1. Opportunities of Remanufacturing for the Automotive Industry Most of the opportunities mentioned by the authors in the implementation of a remanufacturing system in organizations are related to its profitability potential and the generation of business models. Among them, one of the most frequently mentioned opportunities is the perfect combination between quality level and affordable price of the remanufactured part (Bocken et al., 2016; Casper, 2021; Gunasekara et al., 2021; King et al., 2006; Parker et al., 2015; Persistence Market Research, 2018; Seitz & Peattie, 2004; Williams, Appiah-Kubi, Atuahene, & Park, 2014). According to a market research report of the automotive parts remanufacturing industry carried out in 2018, with projections to 2024, "remanufactured parts cost nearly 50-75% as much as the original product - while providing the quality, which remains the key booster to demand growth of remanufactured parts" (Persistence Market Research, 2018). This would be an opportunity of special interest for OEM manufacturers, as is the case of Company A, given the quality levels that only they can assure through the delivery of the associated product warranties (Gunasekara et al., 2021; Williams et al., 2014). Secondly, the savings in production costs from remanufacturing processes in comparison with the production of a new part, are highlighted as positively affecting the business profitability (Bocken et al., 2016; Colledani et al., 2014; Golinska-Dawson & Kawa, 2011; Gunasekara et al., 2021; Parker et al., 2015; Seitz & Peattie, 2004; Sundin & Dunbäck, 2013; Williams et al., 2014). The authors mainly mention the efficient use of resources as the reason for these savings, as well as the decrease in procurement and disposal costs (Bocken et al., 2016; Colledani et al., 2014; Golinska-Dawson & Kawa, 2011; Gunasekara et al., 2021; Parker et al., 2015). Data collected by some authors shows that “remanufacturing processes use 20-25% of the energy needed to manufacture the same product. The cost of remanufacturing can be between 45% and 65% less than the manufacturing cost” (Colledani et al., 2014, p. 15). Further opportunities mentioned that are related to the profitability of remanufacturing processes and their business models, are presented in the potential to cover new markets (Atasu, Dumas, & Van-Wassenhove, 2021; Casper, 2021) as well as to offer new services to their current customers (Parker et al., 2015; Seitz & Peattie, 2004). Some opportunities linked to the strategic aspects of an organization were also identified. Among these, the size projections of the automotive remanufacturing market stand out, where the authors agree that it is a sector with high growth potential (Casper, 2021; Gunasekara et al., 2021; Parker et al., 2015; Persistence Market Research, 2018; Seitz & Peattie, 2004; Steinhilper et al., 2006; Sundin & Dunbäck, 2013; Wang & Chen, 2013; Williams et al., 2014). “The global market for Automotive Part Remanufacturing is estimated to reach $198 billion by 2024 while in 2018 it was just $53 billion. Thus, the automotive remanufacturing industry has created a congenial situation to develop remanufacturing business opportunities” (Gunasekara et al., 2021, p. 1386). 9 Additionally, opportunities are proposed regarding the power of being a leader and incumbent player in the remanufacturing industry, given that incumbent OEMs, would be better positioned to achieve system-level changes through the orchestration of the required activities, investments in R&D, and their higher influence to policymakers (den Hollander, 2018; Gunasekara et al., 2021; Lahti, Wincent, & Parida, 2018). As expected, another relevant factor when proposing opportunities in the implementation of remanufacturing systems is their sustainability potential, in its environmental, economic, and social aspects. Among these, the most emphasized by the authors is the environmental sustainability, in comparison with the harmful effects of linear production systems, or with other EoL recovery strategies (Amelia et al., 2009; Casper, 2021; Colledani et al., 2014; King et al., 2006; Parker et al., 2015; Sundin & Dunbäck, 2013; Williams et al., 2014). “It is believed that in the United States alone remanufacturing helps to recuperate about 50% of the raw material which saves over 8 million gallons of crude oil in steel manufacturing, 46720 and 5443 metric tons of iron ore, copper and other metals respectively" (Williams et al., 2014, p. 1). Social and economic sustainability advantages are achieved through the creation of new jobs (Parker et al., 2015) and, again, cost reductions derived from the efficient use of resources. Finally, more opportunities are presented in relation, with the level of quality to be achieved by OEMs in remanufacturing processes compared to other circular strategies, with the possibility of updating the performance of the parts through remanufacturing (Casper, 2021; King et al., 2006; Martins, Godina, Azevedo, & Carvalho, 2021; Wang & Chen, 2013), and even with getting better performance feedbacks of the automotive parts from customers (King et al., 2006). Likewise, opportunities associated with technological developments for monitoring the status of parts or their location are proposed (Casper, 2021; Kleylein-Feuerstein, Joas, & Steinhilper, 2015; Nyström, 2019), and opportunities regarding supply logistics and the Value Network are presented through stronger synergies with partners (Colledani et al., 2014; Gunasekara et al., 2021; Lundmark et al., 2009; Martins et al., 2021). Opportunities to participate in design processes for remanufacturing are also highlighted (den Hollander, 2018; Gunasekara et al., 2021; Lundmark et al., 2009), as well as associated with parts supply and collection processes through minimizing the risk of insecurity of materials for production (Parker et al., 2015; Sundin & Dunbäck, 2013). From this analysis it can be concluded that the main opportunities for the implementation of remanufacturing systems in the automotive industry are related to profitability from the efficient use of resources, generating savings in production costs, which ultimately translate into more affordable prices for customers, while at the same time offering the same levels of quality and associated product warranties, hand in hand with less negative impact on the environment. This scenario has been called by some authors as a "win-win-win", in comparison with traditional manufacturing processes, since remanufacturers benefit by the reductions on costs, customers by accessing the same quality for more affordable prices, and the environment from a lower use of raw materials and energy (Seitz & Peattie, 2004; Sundin & Dunbäck, 2013). 2.3.2. Opportunities of Remanufacturing ECUs There is a lack of academic articles referring to ECUs remanufacturing processes and systems, therefore, it has not been possible to identify many associated opportunities or challenges. Still, some opportunities particular to the remanufacturing of electronic parts and ECUs could be collected, mainly in comparison with the remanufacturing of mechanical automotive parts. 10 Regarding opportunities in the production process, it is mentioned that the cleaning activities of automotive electronic parts would be less complicated, since in comparison, these would be less contaminated than mechanical parts (Casper, 2021). Other authors refer to the quality of used electronic parts, emphasizing that they would be "high-tech, highly reliable, and high value-added products. The residual life of these components is very long. Thus, the remanufacture and reuse of these components are feasible initiatives" (Wang & Chen, 2013, p. 2). Opportunities are also associated with the profitability of remanufacturing ECUs, in relation to the low cost for a remanufacturer of acquiring a used ECU, around $3 to $5 dollars, compared to the value at which they can sell it, around $500 dollars, at least until 2013 (Sundin & Dunbäck, 2013). Likewise, its potential to generate new business and markets is identified (Casper, 2021; Wang & Chen, 2013), given that “with the rapid development of electronic information technology, the use of electronic components in vehicles has dramatically increased. Electronic control units (ECUs) control almost all of the functions of a vehicle" (Wang & Chen, 2013, p. 1). Finally, technological opportunities are also presented regarding the diagnosis and status of ECUs, since, according to some authors, there are technologies that would allow them to be analyzed wirelessly, generating savings in time and labor resources (Kleylein-Feuerstein et al., 2015). 2.3.3. Challenges of Remanufacturing for the Automotive Industry For the identification of challenges or threats that the implementation of remanufacturing systems could generate, it was not difficult to identify those in which most authors agreed. The uncertainties in the supply and collection activities of cores for remanufacturing were one of the challenges most emphasized, and in particular the lack of control regarding the quantities, timing, and quality of the cores supplied (Casper, 2021; den Hollander, 2018; Golinska-Dawson & Kawa, 2011; Gunasekara et al., 2021; Lahti et al., 2018; Lundmark et al., 2009; Seitz & Peattie, 2004; Sundin & Dunbäck, 2013). Through some of their research, it is shown that this is a very common problem in companies in the remanufacturing sector, where, for example, “a survey conducted with 48 remanufacturing companies (..) showed that more than half of the companies had no control over the timing or the quantity of the returns” (Lundmark et al., 2009, p. 3). This challenge becomes even more important when compared to a traditional manufacturing process, where these variables are strictly calculated, making it possible to optimize processes, and thus generate profits for the businesses. These uncertainties generate complications in the fulfillment of demands, in inventory management, and clearly, also in the production activities of organizations. Accordingly, it is stated that “uncertainty is the main problem in materials management of combined forward and reverse flows. The uncertainty is caused by mismatch between supply and demand with respect to timing and quantity in a recovery networks” (Golinska-Dawson & Kawa, 2011). The uncertainties in quality add challenges to the productive process, in the sense that “two returned products (cores) that are identical might yield a very different set of remanufacturable parts which makes inventory planning and control and purchasing more difficult” (Sundin & Dunbäck, 2013). From case studies carried out in automotive remanufacturers, some authors identify “core acquisition as the most difficult barrier to ensure profitable remanufacturing” (Gunasekara et al., 2021). Other challenges associated with the supply and collection of cores are the competition for cores from different remanufacturers (Seitz & Peattie, 2004; Sundin & Dunbäck, 2013), and the supply of spare parts for remanufacturing (Casper, 2021), given the aforementioned uncertainties. 11 Based on the challenges in the supply of cores, another area that is highly affected is that of production processes, where the authors mention various reasons that would complicate the remanufacturing system. Among these, the labour intensive quality of remanufacturing stands out (Colledani et al., 2014; Lundmark et al., 2009; Seitz & Peattie, 2004), in comparison again with traditional manufacturing processes, where it is stated that “the remanufacturing process is in general approximately three to five times more labor intensive than manufacturing of the same product” (Lundmark et al., 2009). This is clearly affected by the low levels of automation currently implemented for remanufacturing (Casper, 2021; Colledani et al., 2014; Lundmark et al., 2009; Steinhilper et al., 2006; Wang & Chen, 2013), a challenge that is also identified regarding technological developments. Additionally, another issue that would further complicate the labor intensity characteristic is that the remanufacturing processes add activities that traditional manufacturing processes do not consider. These processes are cleaning, inspection and testing, and disassembly of parts. The difficulties from disassembly are most emphasized, given their high variability in terms of labor and time required, and the associated risks of damaging the parts in the process (Colledani et al., 2014; Golinska-Dawson & Kawa, 2011; Gunasekara et al., 2021; Nyström, 2019; Sundin & Dunbäck, 2013; Wang & Chen, 2013). The inspection and testing of parts would also present difficulties regarding the time it requires (Kleylein-Feuerstein et al., 2015; Steinhilper et al., 2006; Wang & Chen, 2013), and cleaning tasks would present complexities for heavily contaminated automotive parts (Casper, 2021; Gunasekara et al., 2021). Other challenges encountered in productive remanufacturing activities are planning difficulties given the high variability of the process (Casper, 2021; Lundmark et al., 2009; Sundin & Dunbäck, 2013), the low productivity level (Colledani et al., 2014; Golinska-Dawson & Kawa, 2011; King et al., 2006), associated with the factors already described as variability and low automation, and to small batch sizes (Golinska-Dawson & Kawa, 2011; Lundmark et al., 2009). Thirdly, challenges associated with profitability and business models are also highlighted, as well as those affecting strategic aspects of an organization. As potential effects on profitability and business generation, customers' perceptions of quality of remanufactured products are mentioned, in comparison with brand new products, which might not be solved by the delivery of product warranties (Gunasekara et al., 2021; Lundmark et al., 2009; Williams et al., 2014). The difference in the quality perceptions of remanufactured and new products would become more relevant in the automotive industry since “consumer perception about product quality is intuitively skewed towards new products. The concern for safety in an area as critical as the automobile industry may outweigh the economic benefits of using recycled equipment” (Williams et al., 2014, p. 1). Other challenges that would affect profitability would be the aforementioned high labor costs (Parker et al., 2015; Seitz & Peattie, 2004), imbalanced supply and demand, given the uncertainties and variability of production processes (Lundmark et al., 2009; Sundin & Dunbäck, 2013), and the lack of successful business models that validate circular strategies (Colledani et al., 2014; Korhonen et al., 2018). Regarding strategic aspects, challenges are proposed concerning dependencies and rivalries with the current linear productive system (Casper, 2021; Korhonen et al., 2018), uncertainties about the future behavior of the market (Johansson & Henriksson, 2020; Seitz & Peattie, 2004), considerable investments for the successful implementation of remanufacturing (Colledani et al., 2014; Lahti et al., 2018), competition with world markets, such as the USA and China where the remanufacturing sector is more mature than in Europe (Parker et al., 2015; Seitz & Peattie, 2004), and competition with other players in the remanufacturing industry such as Independent and Contract Remanufacturers (Gunasekara et al., 2021; Seitz & Peattie, 2004). 12 Two additional areas of challenges that are worth mentioning are supply logistics and value network, as well as demand and (re)distribution. Regarding the first, inter-organizational practices and the creation of synergies with partners and stakeholders was mentioned on more than one occasion by different authors, highlighting the risks of depending on other actors in the value chain, as well as clients, risks in contractual uncertainties, and in managing relationships with stakeholders such as policy maker and institutions (Gunasekara et al., 2021; Korhonen et al., 2018; Lahti et al., 2018; Seitz & Peattie, 2004). Additionally, and with greater relation to supply logistics, challenges would arise due to the high number of supply sources which would be characteristic of remanufacturing systems (Golinska-Dawson & Kawa, 2011; Lundmark et al., 2009; Seitz & Peattie, 2004; Sundin & Dunbäck, 2013). Now, in relation to activities of Demand and (Re)distribution of remanufactured products, the main difficulties would arise in the uncertainties in the levels of demand from customers, which according to the authors, is not yet stable and represents an immature market (den Hollander, 2018; King et al., 2006; Lundmark et al., 2009; Sundin & Dunbäck, 2013) Finally, challenges are identified in relation to inventory management and control, and their high associated costs, given the uncertainties in the supply and demand processes that would cause companies to have problems managing their stocks of spare and remanufactured parts (Casper, 2021; den Hollander, 2018; Golinska-Dawson & Kawa, 2011; Lundmark et al., 2009; Parker et al., 2015; Seitz & Peattie, 2004; Sundin & Dunbäck, 2013). Of equal importance are the difficulties encountered in terms of technological developments, where the lack of automation of production processes is the main factor, as previously stated. Challenges regarding the design of products for remanufacturing are also mentioned, given that current product designs do not facilitate the activities necessary for these processes, such as the disassembly of parts (Casper, 2021; Lahti et al., 2018; Lundmark et al., 2009; Parker et al., 2015; Seitz & Peattie, 2004; Xu et al., 2014); regarding the lack of knowledge and technical skills for remanufacturing activities in organizations (Casper, 2021; Lahti et al., 2018; Parker et al., 2015; Seitz & Peattie, 2004); regarding ambiguities in the concepts of remanufacturing, making its implementation harder for organizations (Ijomah et al., 2004; Johansson & Henriksson, 2020; Korhonen et al., 2018; Parker et al., 2015); and even about potential negative effects on environmental sustainability due to rebound effects and likely increases in consumption (Korhonen et al., 2018; Wang & Chen, 2013). Some challenges related to legislation are also proposed in terms of the strict safety regulations and requirements of the industry (Korhonen et al., 2018; Parker et al., 2015; Shao et al., 2020), but these will not be delved into since they are outside the scope of this research. Based on this identification of challenges in the academic literature, it is concluded that the main difficulties related to the implementation of remanufacturing systems in the automotive industry would be related to the uncertainties in the supply and collection of cores for remanufacturing, and uncertainties in the demand for remanufactured products, given the still immature market, causing the aforementioned imbalances between supply and demand. This would generate negative repercussions in various areas such as production, inventory management, logistics and profitability. Additionally, for its effective operation, the implementation of remanufacturing would require considerable investments, technological developments for automation, synergies with partners and inter-organizational relationships, and designs that consider remanufacturing activities. 13 2.3.4. Challenges of Remanufacturing ECUs As mentioned above, there is not a great availability of academic literature that refers to remanufacturing processes in ECUs. In any case, it was possible to identify some particular challenges to this type of automotive parts. Although the difficulties of remanufacturing ECUs seem to affect various business areas, its complexity lies in the extreme sensitivity of handling electronic parts (Casper, 2021; Kleylein- Feuerstein et al., 2015; Sundin & Dunbäck, 2013; Wang & Chen, 2013). Casper (2021) refers in general to the handling of electronic parts stating that they “are furthermore more fragile than mechanical parts. Extra care, specific packaging and transportation could be necessary” (p. 53). This would add complexity to the diagnostic activities on faulty ECUs, as well as to their disassembly. In fact, in the study carried out by Kleylein-Feuerstein et al. (2015), the author stated that “within the six remanufacturing process steps of initial diagnosis, disassembly, cleaning, inspection, reconditioning and reassembly, initial diagnosis of ECUs currently faces the highest challenges due to the above stated reasons of device and data inaccessibility” (p. 168). This would generate higher production time requirements for remanufactured parts (Wang & Chen, 2013), the common practice of discard and replacing with a new part instead of remanufacturing (Casper, 2021), and according to what has been proposed by several authors, the need for the development of new technologies that support remanufacturing activities in ECUs (Casper, 2021; Kleylein- Feuerstein et al., 2015; Steinhilper et al., 2006; Wang & Chen, 2013). Casper (2021) talks about the research carried out by Kleylein-Feuerstein et al. (2015), as it reflects “remanufacturing processes for electronic control units as a great difficulty and highlights that the actual existing technology of remanufacturing is insufficient” (p. 53). Steinhilper et al. (2006) adds to that stating that “new technologies have to be used in remanufacturing to recognise and detect failures of ECU’s” (p. 443) Other challenges proposed by the authors in the remanufacturing of ECUs refer to the complexities of performing this activity on ECUs’ hardware, since “ECU hardware repair is a precise and complex process. Thus, repair knowledge and experience should be accumulated to significantly reduce repair process time” (Wang & Chen, 2013, p. 11). On the other hand, quality and safety requirements are mentioned as a major criterion for the production of remanufactured parts in the automotive industry (Williams et al., 2014). 3. Methodology The Methodology section of the thesis outlines the research design, data collection methods, and analysis techniques employed to gather and interpret the primary and secondary data. It provides a clear and systematic framework for conducting the research, ensuring reliability and validity. By detailing the steps taken to acquire and analyze data, this section allows for the replication of the study and enhances the credibility of the research findings. 3.1. Research Approach and Philosophical Assumptions All research work aims to generate knowledge through the collection and analysis of data that inform and complement existing theoretical understandings of different phenomena, thus generating a contribution to knowledge, however modest this contribution may be. It should be noted though, that there are different ways in which data can inform theory. Traditionally, the two most common approaches are the deductive and the inductive. In the first, the theory allows 14 hypotheses to be generated, which are then tested through the data collected. While in the inductive, it is the data and the empirical discoveries that allows theory to be generated. (Bell, 2019). However, in recent years, a third approach has gained popularity in business research, which is known as the abductive approach. This one describes a back-and-forth relationship between theory and data, in a process of dialogic transference, allowing to expand understandings of both theory and empirical phenomena (Bell, 2019; Dubois & Gadde, 2002). According to Dubois and Gadde (2002) "this approach creates fruitful cross-fertilization where new combinations are developed through a mixture of established theoretical models and new concepts derived from the confrontation with reality". The abductive approach shows to be productive if the researcher's objective is to discover new variables and new relationships regarding the phenomenon studied (Dubois & Gadde, 2002). This study adopts an abductive approach, aiming to construct reflexive narratives through a dialogical process between identified theories and the empirical phenomenon (Bell, 2019). While a literature analysis identified the main opportunities and challenges associated with implementing remanufacturing systems in the automotive industry, it is important to consider their specific effects on Company A and its production of ECUs. Thus, the study seeks to enrich the existing theory by examining a practical case, with the objective of generating logical inferences that contribute to understanding the social and economic phenomenon, rather than creating new concepts or explanatory models. Additionally, there are philosophical assumptions present in all research work, which shape the practice of the study and the drawing of conclusions. In this regard, ontological considerations refer to our understanding of what reality is, and epistemological considerations describe our understanding of how we can know reality (Bell, 2019). Then, the theories that this study seeks to develop will be from a constructivist ontology, instead of an objectivist one, giving priority to social actors and how they give meaning to the social phenomenon to be studied (Bell, 2019). The commitment and concern for the environment at a global level, and its consequent sustainability pursuits are considered a social movement, which has been gaining value through the understanding that people have of it and their actions taken, thus, is constantly changing, adapting to what we are learning and normalizing of it. A particular understanding of what reality is, through ontological considerations, suggests a particular position on how we can gain this knowledge. Therefore, the theories that this study seeks to develop will follow an interpretivist epistemology, trying to make sense of the perceptions of the actors involved, about the opportunities and challenges in the implementation of remanufacturing, that they perceive as relevant to their context, emphasizing in the understanding of their behaviors (Bell, 2019). In addition to the considerations of ontological constructivism and epistemological interpretivism, this research strategy proposes an emphasis on naturalism, giving value to the interactions between people, their behaviors and consequent interpretation, in contexts that will not be influenced by the researcher or her study (Bell, 2019). Although the researcher will provide the requesting company with the results and conclusions of her analysis, she will not participate in decision-making during the research process. 3.2. Research Strategy The research strategy refers to the general method adopted for the research and reflects the philosophical assumptions made. The two main research strategies known are quantitative and 15 qualitative. While the quantitative strategy emphasizes the quantification of data through its collection and analysis, which often requires a deductive approach, the qualitative strategy focuses on the collection and analysis of words and images, where an inductive approach to explaining the relationship between data and theory is often appropriate (Bell, 2019). Based on the definitions made in section 3.1 about the research approach, and their corresponding epistemological and ontological considerations, this research project will follow a qualitative strategy of analysis, giving greater emphasis to the impressions of the interviewees to obtain conclusions, rather than to measurements and numerical data (Bell, 2019). The decision to carry out this study through a qualitative research strategy, in addition to being motivated by the unexplored topic of study, from an abductive perspective, and by the high influence that conceptions of sustainability have in today's society, reasons of practicality and convenience are added. It is considered to use a qualitative, and not a quantitative strategy, because quantitative data related to an organization's strategy and productive operations is likely to be of difficult access by someone who is not part of the organization, as is the case of this thesis project. Much less in the quantities necessary to justify the expected results from a quantitative analysis perspective, being this data understood as sensitive information for the company. Although, as Company A is also interested in developing this project, since they see value in gaining a strategic perspective of the pros and cons of implementing remanufacturing on one of their product lines, the researcher is guaranteed access to contacts with heads of different departments where the effects of remanufacturing strategies on ECUs could be perceived. Thus, allowing the researcher to carry out a qualitative analysis to obtain the impressions of different professionals, confidentially and anonymously, regarding the potential opportunities and challenges that the implementation of a remanufacturing system could have in the organization. Moreover, as Company A is a multinational corporation with a global footprint, including branches in Sweden and other European countries, the researcher is granted access to contacts within the company's international offices. This presents an opportunity to tap into the expertise and insights of professionals from various locations, offering valuable contributions to the investigation. 3.3. Research Design The research design provides the framework for the collection and analysis of data (Bell, 2019). Given that the objective of this study is the identification of opportunities and challenges of the implementation of remanufacturing in the automotive industry, through the experience of Company A, and the impressions of its different professionals, this work will follow a design of case study research. A case study research design seems the most appropriate for this research work, going for a detailed and in-depth study of the case of Company A in their pursue towards circularity and remanufacturing, and the analysis of contextual situations that could hinder its implementation, in its natural context. According to Bell (2019), the main reason for using this design is that it allows for a deeply understanding of a phenomenon in a particular context, as it is believed, is the case of Company A and the potential for remanufacturing of ECUs, which hasn’t been widely explored yet. The level of analysis for this research design would be the Company’s A organization, but also, its business departments, allowing the collection of different perceptions, since opportunities and 16 challenges from remanufacturing will have effects in many business functions. To avoid misinterpretations, it is important to make explicit that even though, the perceptions from professionals of different units would be collected, the level of analysis would be consistently the whole organization, and how the effects on these different units would affect Company A strategy towards circularity and remanufacturing. 3.4. Systematic Literature Review To identify the main opportunities and challenges of remanufacturing, around 30 academic articles and industry reports were analyzed in which the implementation of remanufacturing systems is addressed in detail, or at least mentioned from the implementation of circular and closed-loop economies. It is important to highlight that more than half of the reviewed studies focus specifically on the implementation of this strategy in the automotive manufacturing industry, giving greater validity to the result of this literature review with respect to the objectives of the research work. In addition, an attempt was made to include frequently mentioned authors with extensive experience in the subject. The main source of literature was the academic search engine of the Gothenburg University Library. Through this, access to different academic databases was possible. Queries such as: "remanufacturing in the automotive industry", and "challenges for remanufacturing in the automotive industry" were used. The words were exchanged based on the following table of keywords. Table 1. Systematic Literature Review Keywords Key Words Analogous Remanufacture Repair, recondition, reutilzation, recycle, manufacture, production. Circular Economy, circularity, closed-loop cycles, closed cycles, circular models, Circular circular business models, End-of-Life, EoL, Rs. Sustainability Environmental, ecological, sustainable, waste reduction. Automotive Industry Automotive sector, vehicle, car. Challenges Barriers, threats, blocks, limitations. Opportunities Strategies, plans, goals, cases, strengths, From these searches, approximately 50 academic articles were accessed, which were reviewed and screened to finally use those that were considered most relevant to the scope of this study. In addition, from this review, it was possible to identify some relevant authors in the development of literature on circularity, and its application in the automotive context. Some of these were Stahel (2016), Bocken et al. (2016), Casper and Sundin (2018), Sundin and Dunbäck (2013) and Steinhilper et al. (2006). Finally, a thematic analysis of the selected articles was carried out in order to identify the main opportunities and challenges that the implementation of remanufacturing offers to the actors of the automotive industry. To facilitate the identification of opportunities and challenges, different business areas and scopes were defined where these opportunities and challenges would be expressed in an organization. The defined areas were: (1) Supply/Collection of cores for remanufacturing, (2) Productive Process, (3) Inventory, (4) Demand and (Re)distribution, (5) Quality, (6) Supply Logistics and Value Network, (7) Profitability and Business Models, (8) Organizational Knowledge and Experience, (9) Strategy, (10) Sustainability, (11) Technology, (12) Design, (13) Conceptualization, and (14) Legislation and Requirements. Through these, the authors who mentioned them among their studies and considered relevant for the implementation 17 of remanufacturing were identified. In this way, the different opportunities and challenges detected were categorized, allowing a visualization of the business areas with greater or lesser opportunities and challenges. This resulted in the presentation of opportunities and challenges found in section 2.3 Opportunities and Challenges for the implementation of remanufacturing in the Automotive Manufacturing Industry. 3.5. Data Collection In this research, two different techniques to collect and then analyze information have been used. These methods are primary and secondary data collection (Bell, 2019). The first one describes techniques in which the information is generated by the action of the researcher during the study, such as qualitative interviews and field observations. While, in the secondary data collection, the data gather and analyzed has been generated prior to the investigation, such as reports and documents. 3.5.1. Primary Data Collection In line with the chosen research strategy of qualitative analysis, the main data collection method used in this research work is qualitative interviews with professionals from departments and functions in the company that are related to the business or production of ECUs. An important characteristic of the data collection process for this research work is also determined by the level of involvement of the researcher. A certain level of ethnography (Bell, 2019) is present in the context of one of the automotive manufacturing companies in Sweden. With this company, formal agreements have been generated for the inclusion of the researcher in the business context, granting her a physical space in the company's offices, access to some numerical information that may be useful for the study, as well as contacts with company roles that are used for the qualitative interviews process. However, given the time limitations of the thesis project, it is difficult to achieve a full level of ethnographic involvement. Respondents Selection For the respondents selection of this qualitative research work, a purposive sampling strategy is used, rather than the selection of random participants, through methods like probability sampling (Bell, 2019). The research questions and the purpose of the study allow for the selection of a group of entities that are representative for the generation of theories and experiences. The data selection is composed by, in a first level, Company A, a multinational organization, automotive manufacturer in Sweden, and Tier 1 supplier of automotive parts, which is currently studying the possibilities for transitioning from a lineal productive paradigm, to a circular one through the implementation of remanufacturing systems. At a second level of selection, the departments of Company A, where the effects, that is, the potential opportunities and challenges of implementing a remanufacturing system, could be perceived. Some organizational functions proposed for the subsequent contact of respondents were Supply Management, Production, Business Developments, Sales, Inventory Management, Sustainability, and Technological Developments. In them, the aim is to obtain the perceptions of the professionals who participate in the activities of these departments, and whose experience and knowledge can be a contribution to the objectives of this research work. The list of respondents can be seen in Table 2 presented in the Interview Process section following this one. 18 Some of the specific types of purposive sample that are used during the research work are theoretical sampling, where the generation of theories from the first results of the investigation allow indicating new data sources to be added to the initial sample (Bell, 2019). Another type of sampling technique that is used is snowball sampling (Bell, 2019), allowing the researcher to access more relevant contacts for the study, once the contact with some professionals from Company A started. Interview Process The qualitative interviews carried out follow the form of semi-structured interviews, instead of unstructured ones, allowing focus on concepts relevant to the question and the purpose of the research, but at the same time providing the necessary flexibility to delve into the different perspectives of the interviewees (Bell, 2019). An interview guide has been prepared for the development of the semi-structured interviews, and this one was designed after a deep understanding of the potential opportunities and challenges that the implementation of remanufacturing systems could provide for businesses. The interview guide for this research can be seen in Appendix C. Meanwhile, professionals in the work areas of Company A were contacted. The data of potential responders was provided to the researcher by her main connection in Company A. The first contact with these potential responders was made by e-mail, also providing a brief presentation of the project and the researcher. After some of the contacts accepted their participation, a date for the interview was scheduled. At the same time, the prepared interview guide was sent to the participants. In this process it was possible to schedule ten meetings with professionals from different areas of Company A. Nine of them fulfill functions directly related to the production or business of ECUs. The interviews lasted between 30 minutes and an hour in total. Given the locations of the professionals, a large majority were carried out online, through the Zoom video conferencing platform. The list of participants, their positions, and the duration of the interviews can be found in Table 2. Table 2. Respondents and interview details Length Code Role Department/Function Date Format [min] R1 Mechanical Design Engineer Design April 3, 15:00 60 Online R2 Customer Quality Manager Quality Management April 4, 13:00 45 In person R3 Sales Manager Sales April 5, 13:00 32 Online R4 Sales Manager Sales April 6, 16:00 45 Online R5 New Product Launch Manager Production April 7, 09:00 42 Online R6 Senior Customer Center Specialist Logistics and Inventory Management April 7, 10:30 42 Online R7 Key Account Manager Customer Service April 11, 09:00 42 Online R8 Quality Customer Interface Engineer Aftersales April 11, 13:00 40 Online R9 Resident Electronic Engineer Research and Development April 11, 15:00 50 In person R10 Manager Automotive Sustainability CE Sustainability Management April 13, 09:30 45 Online 19 3.5.2. Secondary Data Collection As part of the secondary data collection method, valuable insights were derived from Company A's reports, which offer detailed information on the organization's activities and vision. It is important to note that these reports are publicly available documents. 3.6. Data Analysis The primary data collected for this research, consisting of interviews with professionals from Company A, was analyzed using thematic analysis and coding methods. The goal was to identify common themes among the participants' responses and assign predetermined and emerging codes to label their insights. Thematic analysis was chosen to facilitate the identification of relevant opportunities and challenges for Company A, enabling structured comparisons and logical inferences (Bell, 2019). The first step in the analysis process involved transcribing the interviews. Digital tools, specifically Microsoft 365 Word, were utilized to generate accurate transcriptions from the audio files. These transcripts were then carefully reviewed to ensure the fidelity of the interviewees' responses. Subsequently, thematic analysis was conducted on the transcribed interviews using coding. NVivo 12 software was employed to support this process, allowing for the creation of 97 codes. These codes were organized to identify remanufacturing opportunities and challenges specific to the characteristics of ECUs and their repair processes, as well as aspects related to Company A's strategy, business operations, and the industrial or regulatory context. While some codes were derived from the existing understanding presented in the literature, an intriguing aspect of the analysis was the emergence of new codes that were raised by the interviewees and had not been previously discussed in academic literature. Finally, a thematic analysis diagram was developed to present the key opportunities and challenges for remanufacturing implementation as first-order concepts. These concepts were further classified into different groups as second-order issues, and dimensions were added to differentiate between opportunities, challenges, and organizational capabilities. Please refer to Appendix D to view the resulting thematic analysis diagram. In addition to the primary data collected for this research, public documents pertaining to Company A's sustainability strategy and manufacturing activities are utilized for analysis, serving as a valuable complement to understanding the automotive context and the organization's strategies. These documents were thoroughly reviewed to extract their main ideas and relevant information regarding the transition to circularity and the implementation of remanufacturing within the organization. 3.7. Methodology motivation The motivations for selecting the chosen methodology have been extensively discussed in previous sections, highlighting the alignment between the research strategy, design, methods, and analysis employed in this study. For a concise overview of the interrelationship among these methodology elements, please refer to Appendix E. The primary motivation behind establishing a congruent relationship between the research strategy, design, methods, research questions, and purpose is to ensure the quality of the research 20 work. The quality of a study serves as a determinant of its contribution to the field, credibility, consistency, and applicability of research results. Goffin, Åhlström, Bianchi, and Richtnér (2019) emphasize the importance of quality in case study research in innovation management, with research design, data collection methods, data analysis, and consideration of validity and reliability being key categories for evaluating research quality. This viewpoint is echoed by (Bell, 2019), who acknowledges that the criteria used to assess quality significantly influence the research process. 3.8. Quality Criteria and Reflections about potential challenges By assessing the quality of the research, including validity and reliability criteria, potential challenges in the study can be identified and addressed. These quality criteria serve as a means to evaluate and ensure the rigor and trustworthiness of the research findings. 3.8.1. Internal and External Reliability Reliability is an essential quality criterion that assesses the extent to which study results can be replicated and analyzed from different perspectives. In qualitative analysis, two key aspects of reliability are considered: internal reliability and external reliability (Bell, 2019). Internal reliability pertains to the agreement between observations made by different researchers studying the phenomenon (Bell, 2019). In this particular study, the internal reliability may be limited as there is only one observer involved, making it challenging to compare observations. To address this limitation, the researcher plans to enhance the reliability by seeking feedback from her supervisor at Company A and other professionals involved in the project. Their input will serve as additional perspectives to validate and strengthen the findings. External reliability examines the potential for study replication, which can be particularly challenging in qualitative research due to the difficulty of recreating the exact social context that heavily influences the study results (Bell, 2019). While external reliability may also be low in this research proposal, future researchers are advised to identify a similar context and assume the role of a researcher with involvement in one of the companies within the industry under analysis. This approach would contribute to establishing external reliability by providing an opportunity to compare and replicate the study in a different setting. By acknowledging the limitations of internal and external reliability in this study, the researcher remains aware of the potential challenges and proposes measures to mitigate them, ensuring a rigorous approach to the research process. 3.8.2. Internal and External Validity Validity is a crucial criterion that assesses the integrity and accuracy of the conclusions drawn from research (Bell, 2019). It ensures that the study is effectively examining what it claims to investigate. In qualitative research, internal validity, which relates to the alignment between study observations and developed theories, is typically high (Bell, 2019). To achieve high internal validity in this study, rigorous data collection and analysis methods have been employed, including coding and thematic analysis. These techniques contribute to establishing a strong correlation between the study's findings and the underlying theories. On the other hand, external validity concerns the generalizability of research findings and presents potential challenges to this study's quality. Typically, qualitative case studies have low external 21 validity due to their focus on specific cases and small sample sizes (Bell, 2019). In this research, external validity may also be limited. However, efforts will be made to enhance external validity by using a single organizational entity as the primary data source, exploring its perspective on the transition process within the same cultural and regulatory context. By maintaining consistency within this specific context, the study aims to strengthen the external validation of its findings. While acknowledging the potential limitations of external validity, the researcher will employ robust methods and maintain a rigorous approach to ensure high internal validity. By aligning the study's observations with relevant theories and carefully considering the context, this research aims to generate valid and meaningful conclusions that contribute to the knowledge in the field. 4. Empirical Findings The Empirical Findings section of the thesis presents the results and analysis of the primary and secondary data collected, highlighting the insights and observations obtained from the company’s reports and interviews with professionals. Through the presentation of empirical evidence, this section strengthens the validity and relevance of the research findings. The Empirical Findings segment has been divided into three large sections. The first one, 4.1 Company A's approach to circularity and organizational capabilities, contains a brief analysis of Company A’s sustainability report, as well as Company’s A capabilities for the implementation of remanufacturing identified from the interviews. Company A’s capabilities are divided between strengths and weaknesses. The last two major sections, 4.2 Opportunities for Remanufacturing and 4.3 Challenges for Remanufacturing, refer to the opportunities and challenges identified for the implementation of remanufacturing from the respondents interviews. In both cases, three sublevels of analysis are presented referring to the origin of the identified opportunities and challenges. Thus, it is detailed, those remanufacturing opportunities and challenges specific to ECUs and their particularities as products; secondly, those that would originate from a strategic and business perspective; and finally, those given by the industrial and regulatory context. Thus, the opportunities are organized going from the most particular, to the most general and contextual to the industry. Since the research questions are raised based on the opportunities and challenges that would arise in the remanufacturing of ECUs, it was decided to start addressing its particular characteristics first. A diagram of the thematic analysis on which the Empirical Findings section is based can be found at Appendix D. 4.1. Company A's approach to circularity and organizational capabilities In this section, Company A's approach to circularity will be presented through the analysis of its sustainability report, as well as the identification of its main strengths and weaknesses for the adoption of remanufacturing. The objective of this is to understand how the Company plans to make the transition to circularity, what capabilities they have for it, and how it might deal with the challenges that this entails. 4.1.1. Company A’s circularity goals and initiatives Company A's 2022 sustainability report presents a sustainability strategy with ambitious targets to be achieved by 2050 at the latest, fostering collaboration with its value chain partners. These objectives are classified into four focus areas, with the Circular Economy being one of them. 22 Central to this strategy is the organization's commitment to realizing 100% closed product and resource cycles within the established timeframe. Acknowledging that the transition to circularity is a complex process, Company A also understand that the requirements and the speed of transformation of its clients, the industry, and the market, will be of high relevance for the achievement of the aforementioned objectives. The implementation of circular practices is considered essential not only for achieving closed cycles but also for fulfilling their broader sustainability goals. To date, Company A has initiated the integration of circularity across its business units, with a particular emphasis on product design, the development of circular business models, and the responsible sourcing and utilization of materials. Additionally, effective management of operational waste stands as a critical component in the transition to circularity. The company has established measurement indicators for waste recovery, which prioritizes the reuse or recycling of materials over its disposal. With a target of achieving a 95% waste for recovery quota by 2030, Company A reported an 85% waste for recovery quota as of 2022. It seems important to emphasize that, on more than one occasion, remanufacturing activities are mentioned, both as a service currently offered to the company’s customers, and through ongoing projects for the development of remanufacturing concepts, specifically with a focus on electronics remanufacturing. 4.1.2. Company A’s capabilities In this section, we explore the capabilities of Company A that have the potential to either facilitate or impede the adoption of remanufacturing systems. These capabilities are identified as either strengths or weaknesses. See Table 3 in Appendix F to appreciate the respondents that identified them as relevant for the implementation of remanufacturing within the company. By examining these factors, we can gain insights into the company's readiness and capacity to embrace remanufacturing practices. Organizational Strengths One of the strengths most frequently mentioned by respondents when asked about Company A's capabilities for remanufacturing implementation was the organization's strategic position and experience in the automotive industry. Being a multinational, incumbent company, and with years of experience in the market, in a great majority of the interviews, this characteristic was presented as a strength for the adoption of remanufacturing systems. “We have a strength point, because [Company A] has been on the market for many years and has a lot of experience” – R5 At the same time, half of the respondents identified the financial, operational, and/or technological capacity of Company A as a strength. They recognized that the implementation of remanufacturing systems necessitates significant investment in various resources. Therefore, they consider Company A's financial, operational and technological position to be able to provide a solid foundation for driving the integration of remanufacturing practices. Additionally, the respondents R2, R6 and R10 give relevance to the fact that remanufacturing practices are not something new in the automotive industry, nor for the firm. Company A has carried out remanufacturing in some cases, due to material shortages, and with the previous 23 request and agreement of its customers. Therefore, they consider that, operationally, implementing this at a macro level in the company could be possible. “This is not a new thing for us. Circularity strategies have been known in the industry for a long time and have been used. So we're not starting from scratch” – R10 Respondents R1, R3 and R10 also highlight that the company already has circularity goals and initiatives. Respondent R10, who is the current Manager of Automotive Sustainability in Circular Economy, better details the circular strategy of the company, and states that there is a department in charge of implementing circular economies in the organization. They are currently studying strategies for circularity, and establishing objectives from now to 2050. “We are now working towards 2030 and trying to set steps to 2025. What our customers want, what are the upcoming legislations, what is priority, and where we must focus first” – R10 Organizational Weaknesses The main weakness identified by the professionals interviewed is related to the uncertainty about the remanufacturing processes and the lack of know-how on the part of Company A. Respondents R7, R8 and R10 mention this characteristic as a possible weakness for the implementation of remanufacturing. Although they consider that the organization has some capabilities for this, as mentioned in the strengths, they also recognize that there are other skills and knowledge that they do not have, due to the little explored and uncertain nature of the subject. “We have the lack of know-how. I know, for instance, how to recycle metal. But, if there is an electronic part involved, how to do that? We don't know it.(..) How to deal with that? How to recycle it? How to get this product back? Is it feasible from a business standpoint?” – R10 “These processes are not yet defined. They are not known, and they are very hard to reproduce” – R8 4.2. Opportunities for Remanufacturing The main remanufacturing opportunities here presented have been classified according to their origin. Additionally, the respondents who mentioned them when asked about the opportunities they could identify for the implementation of remanufacturing practices in Company A are also presented. See Table 4 in Appendix F to appreciate how they responded. The opportunities will be described and detailed below. 4.2.1. Opportunities from ECUs characteristics The opportunities that are presented in this section are related to particular characteristics of ECUs, and how these characteristics could become positive prospects when associated with remanufacturing processes. One of the characteristics of the ECUs mostly mentioned by the respondents is the resources shortage for their production, and that techniques such as remanufacturing could become a solution for maintaining their production levels. Thus, this current supply challenge of Company A becomes an opportunity for the use of remanufacturing in products such as ECUs. “[When referring to the automotive supplier’s current context] We have a global hard situation with the electronic components, so if we remain with some parts from all ECUs, 24 better is to remanufacture them, and to send them to the customer, because we don't have another raw material to prepare for the new ECUs”. – R6 Respondents R2, R3 and R6 explain how difficult it has been to maintain supply commitments with customers given the scarcity of resources for their production. The resources shortages become more relevant when understanding that electronics, including ECUs, are products increasingly in demand in the automotive market. Respondents R1, R2, R4 and R10 mentioned this characteristic as an opportunity for the implementation of remanufacturing. “[When referring to electronics] they will become more and more vital in the future. Also, mechanical, or mechatronic components have a big potential. But specially electronics” – R2 R4 even says that cars today no longer compete for their horsepower, but for the quality and diversity of their features. Thus, giving high relevance to the use of smart automotive parts, which provide the car with more functionalities. Hand in hand with this, most respondents also understand the contradiction generated by the scrapping rates of these units when they present faults. Given the materials shortage in ECUs, motivations to minimize as much as possible the current ECUs scrapping rates are expected, and then also, opportunities for reusing and remanufacturing them. “I would like all those resources that are going to waste today, to be reused in some way. I mean, it's obvious” – R9. Respondents R2 and R9 realize that this is not only a waste of resources but must also affect Company A's business. The high quality of the ECU products and its components, the resources invested in their manufacture, and how it is perceived as a waste to have to completely discard many of these products due to failure, are characteristics also mentioned by the respondents R1, R2, R4, R9 and R10. “There are some materials inside, like gold or platinum, which are very expensive regarding the resources and also the energy waste” – R1 In addition, quite often they are faced with the situation that the ECUs returned due to "failure" reasons, finally did not have defects, and the failure found was the result of reasons unrelated to the quality of the part. The “No Failure Found” cases are mentioned by respondents R2, R4 and R9. “We received an X number of units that are actually good, but unfortunately end up in the trash” – R9 Another important opportunity directly related to a feature of ECUs is that they are composed of both hardware and software, and while hardware remanufacturing processes would offer greater difficulties, software repair could be simpler because it may not require disassembly of the part. Therefore, fixing faulty ECUs for software reasons could be easier to achieve without jeopardizing the quality of the product. Most respondents mentioned the software characteristic and its ease of remanufacturing as an opportunity. “Software is 100% remanufacturable today.” – R2 "If you just touch the software, the product itself is not opened, and it's still safe.” - R3 25 However, it is important to understand that this feature would not be present in all ECUs, so this remanufacturing opportunity would be strictly associated with those items that have software included. Finally, one last feature that would offer opportunities for ECU remanufacturing at Company A is their ownership over the ECUs’ software. The opportunity to remanufacture the software part of the ECUs also originates from the property rights, and finally the knowledge that Company A has about the software installed in the ECUs. Since, in theory, no one else could repair the software that was designed and applied to the ECUs by Company A, thus granting th em exclusivity over its repair or remanufacturing processes. This is because each software has a specific source code that only the manufacturer knows and has access to it. This opportunity was only presented by R4, and although it is not identified by the majority, it seems to be of relevance if Company A decides to implement remanufacturing or repair practices in the software of its ECUs. 4.2.2. Strategic and Business Opportunities Those opportunities identified by the respondents directly related to improvements in the firm's profitability and its strategic positioning in the markets will be presented here. According to the interviews analyzed, a large majority of the respondents would agree that the implementation of remanufacturing in ECUs could generate savings in costs. These savings originate from the reuse of resources, which could minimize the acquisition of new materials for production. “If we are allowed to reuse portions of the faulty parts, then we don't have to order from our suppliers” – R2 Another cause of cost savings presented by the respondents, is the avoidance of potential government sanctions regarding sustainability regulations, due to negative impacts on the environment, which would also be minimized by implementing remanufacturing. Among the opportunities frequently cited by the respondents, one notable aspect linked to the profitability of Company A's business is the compliance with future customer requirements and demands pertaining to circularity. It is worth noting that certain OEMs have already initiated inquiries about these alternatives from their suppliers. “In the long run we will be forced by end customers to have remanufacturing, or at least sustainability, on all our components. That has to come. Of that I'm pretty sure” – R2. The implementation of circular strategies such as remanufacturing are then considered a “must” for the company to remain in force in the market. In direct correlation with this opportunity, most respondents also highlighted the potential for offering new services to customers, which could present a significant avenue for Company A to enhance its business prospects. “[When asking about remanufacturing opportunities] To bring more volume to the customer. To not lose the contracts with them and to not lose the customer” – R6. Additionally, respondents R4 and R10 also perceive opportunities in the development of new business models for remanufacturing, opening possibilities for Company A to cover new markets and customer segments. 26 The competitive standing of Company A in the market also offers opportunities for the implementation of remanufacturing. Half of the respondents identify opportunities for remanufacturing based on the competitive advantages that it could generate over other automotive suppliers. “You need to be the first one that is working on this, even if it costs some money. Because it will be very important for the selection of suppliers in the future” – R7 Furthermore, respondents R2, R9 and R10 identified the implementation of remanufacturing as an opportunity to position Company A as a firm at the forefront of circularity and sustainability, improving the firm’s brand image and value over its competition. “If the rumor would spread around the world that [Company A] is having a safe process to remanufacturing, the people could say "maybe their products are a bit more expensive, but look what we get instead" – R2 Respondents R2 and R7 even perceive the benefits to Company’s A competitive stance above some challenges, such as the level of investment necessary for the implementation of remanufacturing, and the production costs necessary for its execution. On the other hand, respondents R2 and R3 also emphasize the opportunity to offer remanufactured products at more affordable prices to their customers, derived from the savings in costs. Thus, presenting again ways to improve the competitiveness of Company A, and constituting another opportunity for the implementation of remanufacturing. Finally, the respondents present opportunities related to the sustainability strategy of Company A, and its impact on the environment. A high majority of the interviewees understood that if circular practices such as remanufacturing were adopted, the firm would use fewer natural resources, and could reuse the resources already invested in the manufacture of ECUs, resulting in more sustainable activities. “They use so much material every day when they produce cars. So they need to re-manage the materials, and reuse them as much as possible” – R10 Similarly, the design for circularity opportunity is identified by half of the respondents, given that they recognize that their current product portfolio presents high challenges for the implementation of circularity and remanufacturing strategies. As a manufacturing company, the respondents understand their degree of responsibility in the design and production of products as sustainable as possible. “Making modification on the product itself, it's also part of remanufacturing” – R5 4.2.3. Industrial and Regulatory Context Opportunities In the context of the automotive industry, this section highlights the final set of opportunities for implementing remanufacturing systems. Two significant opportunities arise within the current and projected industrial and regulatory landscape. Firstly, half of the respondents believe that sustainability regulations are expected to impose stricter limitations on companies regarding their environmental impact. Consequently, regulations will promote and encourage more sustainable and circular practices. By embracing remanufacturing, companies can effectively adapt to this evolving environmental context while meeting regulatory requirements. 27 “I would say if we have the pressure from the outside, like policies, or other political pressure, governmental pressure, then I think we will move as a company”– R3 Secondly, the ongoing and anticipated transformations within the automotive industry are pushing for more sustainable production strategies. As a result, companies that fail to align with these parameters may risk being excluded from the market. Once again, remanufacturing emerges as a crucial alternative for businesses to remain relevant. By embracing remanufacturing practices, companies can demonstrate their commitment to sustainability and position themselves as competitive players in the evolving automotive market. 4.3. Challenges for Remanufacturing This section presents the primary challenges associated with remanufacturing, categorized by their origin. Additionally, the respondents who identified them in the interviews conducted are also classified. See Table 5 in Appendix F. The following subsections will provide a detailed description of these challenges. 4.3.1. Challenges from ECUs characteristics The challenges that are presented in this section are related to particular characteristics of ECUs, and how these characteristics could result in negative prospects when associated with remanufacturing processes. One of the most frequently mentioned challenges reported by respondents revolves around the high sensitivity and complexity of ECUs, which significantly hampers their remanufacturing options. The intricate nature of these units presents a risk of damaging the entire piece when trying to repair them, encompassing both their hardware and software components. “Electronic components are affected by different factors, like thermal condition, water exposure, and moisture. You need to take care of a lot of things” – R8 “With the new implementations, and all the gadgets required in the cars by the end customers, you have more complicated ECUs inside the car to fulfill those requirements” – R5 Furthermore, R9 points out that the complexity of some ECUs software is compounded by the presence of developments from both the OEM customer and Company A. This arrangement restricts the engineers at Company A from having full access to the software part provided by the OEM, thereby complicating the software repair process. The inherent characteristics of ECUs also present challenges for the analysis, evaluation, and disassembly processes necessary for successful remanufacturing. These activities play a crucial role in accurately identifying failure causes and repairing the units. Respondents R1, R3, and R9 point out that the analysis and evaluation processes currently pose challenges in identifying the root cause of ECU problems. Although current fault assessments can determine whether the issue lies within the hardware, software, if it’s unknown, or no fault is found, detecting the exact root cause is often elusive. This relatively unexplored process presents an additional challenge for remanufacturing, potentially necessitating the adoption of new technologies. Additionally, this is a process that can demand a lot of time and effort from the team in charge. 28 “Doing a full software scan is not 100% possible on some units. So that makes it difficult to analyze if the modem is working fine, or if the SIM card is working fine. There are things that limit us to be able to do a full recovery and check the unit correctly”– R9 Similarly, respondents R3, R4, R5, and R9 highlight the significance of disassembly challenges, as there is a risk of irreversibly damaging the units since they were not designed for easy opening. Remanufacturing these units requires its disassembly and fixing or replacing the specific part causing the problem, posing a risk of irreversible damage. “When opening the cover [of the ECU], as this thermal paste sticks, it causes the aluminum cover to stick to the circuit.(..)So the first challenge we've seen technically speaking is the hardware disassembly” – R9 This challenge is primarily associated with the hardware remanufacturing of ECUs, since software remanufacturing might be conducted without disassembling the part. Building on the aforementioned challenges, half of the interviewees express the need for technological advancements and automation to enable safe and profitable remanufacturing procedures on ECUs. Currently, automotive manufacturers employ automated lines to ensure product quality and enhance safety by minimizing human intervention during manufacturing. Consequently, it is desirable for remanufacturing processes to also adopt automated approaches. However, the current lack of adaptations in production lines prevents the realization of automated remanufacturing. Moreover, manual remanufacturing requires more labor and time resources, which translates into costs for the firm. These resources could be significantly reduced if automated lines were utilized for remanufacturing. “I can see this as a big challenge, because I'm not sure if you can remanufacture completely in an automated process. Maybe in the future” – R5 Strict cybersecurity requirements emerged as another major challenge mentioned by respondents R4, R5, R7 and R9. Presently, the design and installation of software in ECUs often incorporate safety measures that restrict modification possibilities. The extent of these restrictions varies depending on the risk level associated with each ECU. For example, ECUs controlling the passenger entertainment would have lower safety restrictions and cybersecurity requirements than electrical brake units. “Cyber security is a very important topic, and security of the software, to ensure that there are some activities done, to not be hacked, or accessed to some parts of the ECU. This is automatically linked with negative points to our side, because then we cannot recover those components anymore” – R5 This challenge predominantly applies to software remanufacturing processes, representing the counterpart of the opportunities identified for software remanufacturing in section 4.2.1 Opportunities from ECUs characteristics. Finally, respondents R2, R3, and R10 highlight as a challenge for remanufacturing the existing labeling system of ECUs. Each product manufactured by Company A is assigned a specific label that serves to identify the unit and trace its manufacturing process throughout the entire value chain. However, if remanufacturing or other unit recovery techniques are implemented, these standardized labels, which are commonplace in the automotive industry, would need to accommodate modifications to reflect the reuse status of the product. Otherwise, they would continue to reference the original product, impeding the proper identification and tracking of remanufactured units. 29 4.3.2. Strategic and Business Challenges Analogous to the strategic and business opportunities, this section identifies those challenges for the implementation of remanufacturing that would affect the market strategy or profitability of Company A's business. A large part of respondents mentioned that choosing to reuse materials or use more sustainable production techniques is usually more expensive. This challenge is presented as the “cost of sustainability” and is a common phenomenon in societies today. Although respondents don’t always refer to it explicitly, they give examples of situations where it’s cheaper to keep doing the things as they do now. Given the linear production paradigms prevailing in industries, opting for more sustainable production systems is usually more expensive for organizations, thus discouraging their efforts. “I think currently it's much cheaper to buy a new material than to make the old one gets recycled, for example. But this can change, I would say, this can change very fast” – R1 However, as mentioned above among the opportunities, respondents also realize that this paradigm is going to change sooner rather than later. Most of the interviewees have expressed concerns about the risks associated with remanufactured parts, particularly regarding their quality and safety levels. These parts undergo more interventions than originally intended in their designs, potentially compromising their overall quality. It is crucial to note that all components used in the production of automobiles are typically subjected to stringent quality and safety requirements, as a faulty part in a car can have severe consequences for passenger well-being. “I would say that all the products that are linked with safety must avoid this type of remanufacturing. If it's not really secure, like 100% safe, if it's any chance that something is wrong, it must be avoided” – R5 Furthermore, although remanufacturing techniques are claimed to deliver products of equivalent quality to newly manufactured ones, convincing customers of this equivalence poses a significant challenge, as noted by the respondents. Guaranteeing the comparable quality of remanufactured parts won’t be an easy task. Related to the quality and safety challenges, respondents R2 and R10 have highlighted the risks associated with the company's image and brand in the event of an incident involving a remanufactured part, resulting in detrimental effects on Company A's credibility and reputation. Additionally, risks to Company A's image are discussed due to repair or remanufacturing processes carried out by other actors, such as independent or contracted remanufacturers. Likewise, the level of acceptance that their current customers would have for remanufacturing services and products is another significant challenge highlighted by the respondents. This challenge stems from the industry's stringent quality standards and the pre-existing requirements and agreements between the involved parties. “Not all the customers will agree to rework parts” – R6 However, Tier 1 suppliers, like Company A, are highly reliant on the acceptance of their customers. In order to maintain their relevance in the market, they must be willing to accommodate and meet the specific requirements set forth by their customers. The interviews revealed another challenge faced by Company A in implementing remanufacturing, which is associated with the operating costs and initial investment required for 30 this process. As remanufacturing involves a distinct production process that necessitates a reverse flow of resources, a significant level of investment would be essential. Consequently, during the initial stages, high operational costs are anticipated, posing potential risks to the profitability of the remanufacturing business. This challenge was emphasized by respondents R1, R5, R6, and R10, underscoring the importance of addressing cost-related considerations in order to ensure the financial viability of remanufacturing activities. “Then we have the costs. Sustainability and circularity come with costs. (..) So, who is going to pay for that?” – R10 In relation to the operating costs that would involve remanufacturing processes, respondents R5 and R6 identify inventory and supply chain costs as another potential challenge. In the event of receiving units with detected failures for subsequent remanufacturing, it must be ensured that these are effectively remanufactured, and demanded back or resell to customers, since otherwise they would only translate into inventory costs for Company A. In addition to the previously discussed challenges, there are additional concerns that would have a significant impact on the strategic and business aspects of Company A. Respondent R7 and R10 have identified further concerns associated with cradle-to-gate responsibilities. Presently, manufacturers bear responsibility and control over their products until they are sold to customers, typically limited to guarantees provided. This poses a challenge for remanufacturing since ensuring the efficient collection of defective parts for its repair becomes complex. Products cannibalization is a challenge mentioned by respondents R4 and R5. If remanufacturing is successfully implemented and gains market acceptance as a process that delivers comparable performance to new parts at more affordable prices, Company A may face the risk of cannibalizing its own products. Finally, respondent R4 has raised the concern of perverse incentives as an additional challenge impacting the market credibility of Company A. As the remanufacturing business would be conducted by Company A itself, which is also the manufacturer of the parts that might be repaired, questions may arise regarding the quality of its new products. Skepticism could arise from the notion that if the new products were to fail, it would create opportunities for Company A to generate remanufacturing business for themselves. 4.3.3. Industrial and Regulatory Context Barriers/Threats The following are the main challenges for the implementation of remanufacturing that originate in the industrial and regulatory context of the automotive manufacturing sector. These are also identified as barriers or threats from the industrial environment. One of the main barriers identified by respondents R3, R4, R8 and R9 is the strict automotive regulations to ensure the quality and safety levels of automotive parts. These regulations present challenges for the implementation of remanufacturing because, in general terms, it is not allowed to intervene the ECUs in order not to compromise their quality and performance. “There's also a lot of talking needed about automotive standards. Those would need to be adapted to be able to apply such remanufacturing” – R3 The respondents R1, R5, R8 and R10 have identified that the lack of concepts and standards around circularity strategies is also a barrier for the implementation of remanufacturing. Unfortunately, sustainability and circularity are still little explored and defined topics, presenting 31 a challenge because it makes it difficult to implement these systems in the industry, as well as the assessment of their potentiality and risks. “It's very hard to assess the risk for something we do not know” – R8 The respondents have rightly identified the generation of inter-organizational collaborations with other players in the value chain, as well as relationships and agreements with industry stakeholders and policy makers, as significant barriers to the implementation of remanufacturing. They believe that changes to current regulations would be necessary to enable remanufacturing, and achieving agreements with various industry actors would be crucial. However, due to the relative unfamiliarity of circularity and remanufacturing concepts within the industry, reaching consensus among different parties on new requirements and production standards can be extremely challenging. 5. Discussion The discussion section of this research provides a comprehensive analysis of the main remanufacturing opportunities and challenges, drawing from an extensive literature review and empirical findings. The aim is to examine the applicability of the identified opportunities and challenges to the specific case of Company A. By doing so, it sheds light on the characteristics confirmed by the respondents that align with the theoretical framework and those that may not apply to their context. This analysis enables a deeper understanding of the relevant opportunities and challenges for remanufacturing implementation within the organization. Furthermore, the dedicated subsection, “Remanufacturing implementation in Company A”, delves into the practical aspects of integrating remanufacturing practices into the organization's operations and strategy. It explores actionable steps that can be taken to capitalize on the identified opportunities, mitigate or overcome challenges, and leverage the organization's capabilities, thus providing insights for the implementation of remanufacturing practices within Company A. Overall, this discussion section serves to bridge the gap between theory and practice by aligning the identified opportunities and challenges with the specific context of Company A. It offers valuable insights into the practical aspects of remanufacturing integration, enabling the organization to make informed decisions and optimize its remanufacturing efforts. 5.1. Main Remanufacturing Opportunities from Literature Review and Data Collection For a better understanding of the main opportunities identified for the implementation of remanufacturing, considering the literature review analysis, as well as the data collected from the interviews, both studies are extrapolated to obtain conclusions. See Table 6 in Appendix G to appreciate the list of main opportunities for the implementation of remanufacturing identified both in the literature and from the interviews carried out in Company A. Similar to the opportunities and challenges identified in the Empirical Findings section, those opportunities that referred particularly to the remanufacturing processes in ECUs are differentiated from the opportunities that the remanufacturing systems could provide to Company A's strategy and business, as well as those derived from the industrial and regulatory environment. Additionally, they are marked as recognized only in the literature, only by the respondents of the interviews, or in both. 32 5.1.1. Main opportunities from ECUs characteristics The remanufacturing opportunities associated with the particular characteristics of ECUs, which were presented both in the literature and in interviews with Company A professionals, were the high quality of the components and the increased demand for electronic components and ECUs in the automotive market. According to Wang and Chen (2013) and their study on remanufacturing processes for used automotive electronic control components in China, the high- tech, highly reliable, and added value characteristics of ECUs, make their residual life very long, thus promoting recovery strategies for them. The respondents also concur with this observation, identifying instances where ECUs are discarded despite retaining this considerable value. Furthermore, the rapid advancement of electronic information technologies has led to a substantial increase in the usage of ECUs, with these components now responsible for controlling almost all vehicle functions. The interviewees agreed with this fact, and even emphasized that ECUs’ software and its functionalities have become the primary distinguishing characteristics of vehicles in today's automotive market. Opportunities that were presented in the literature, but that were not identified by the interviewees were the ease in the cleaning process for ECUs remanufacturing, affordable core collection costs, and wireless analysis to detect the root cause of failures. Reasons for this discrepancy could be that these opportunities are not relevant to the context of Company A, or that the interviewees may not have been aware of these opportunities due to a lack of knowledge or exposure to the specific concepts presented in the literature. For instance, wireless analysis for fault detection, as introduced by Kleylein-Feuerstein et al. (2015), might still be a relatively new and developing technology. Therefore, the respondents may not have been familiar with it. Given that the remanufacturing opportunities associated with the characteristics of ECUs is a topic that has been little explored in the literature, it was in this aspect where a greater contribution was generated from the empirical research. The opportunities that originate from the scarcity of resources for the production of electronic parts, the ECUs high scrapping rates, the software component and its ease of repair as a unique feature of these units, the "No Failure Found" cases, and the faculty that the supplier OEMs, such as Company A, have in the ownership of the ECUs software, were identified by the respondents who participated in this research process, while not presented in the literature. It is important to note that the scarcity of materials and high scrapping rates opportunities were also recognized as driving factors for the adoption of circular and remanufacturing strategies at the outset of this research. 5.1.2. Main opportunities from strategy and business approaches When considering the opportunities for remanufacturing in terms of strategic and business aspects, the interviewees and the literature analysis aligned on several key points. These include the potential cost savings associated with remanufacturing activities, addressing sustainability concerns through circularity, the opportunity to offer new services to existing customers, adopting design for circularity principles, and exploring new business models and market opportunities. Scholars such as, Bocken et al. (2016); Casper (2021); Colledani et al. (2014); Gunasekara et al. (2021); King et al. (2006), have highlighted the potential benefits of remanufacturing, such as cost reduction, sustainability promotion, circular product design, and value creation through efficient use of resources. These characteristics were also identified by the respondents, reinforcing their significance, and presented also at the beginning of this research as Company A’s transition to circularity drivers. 33 On the other hand, the literature presents several strategic and business opportunities for remanufacturing that were not explicitly identified by the respondents. These opportunities include the potential to offer both quality and affordability through remanufactured products, the positive market projections for remanufacturing, the opportunity to update components through the remanufacturing process, and the ability to generate synergies with partners. While some of these opportunities were indirectly hinted at by the respondents, they were not frequently or openly mentioned, which is why they were not included in the list of opportunities derived from the interviews. Furthermore, since remanufacturing strategies are still not widely understood in the industry, the respondents may not have fully got the extent of it, thus limiting the opportunities to be identified. It is possible that if progress is made in the implementation of remanufacturing, these opportunities become relevant in the case of the organization. The key findings and contribution from interviews regarding strategic and business opportunities for Company A include the ability to meet customer demands for sustainability and circularity, allowing the organization to differentiate itself from other suppliers. Thus, contributing to enhance the company's competitive position in the market, signaling a commitment to sustainability and responsible resource management. Additionally, this opens opportunities to elevate the brand image of Company A and its associated value. Although these opportunities were not emphasized in the literature, they seemed relevant for the respondents and the specific context of the organization. 5.1.3. Main opportunities from the industrial and regulatory context The opportunities identified by the respondents regarding compliance with the foreseeable sustainability regulations and the alignment with automotive sustainability trends through the implementation of remanufacturing systems in organizations, were not explicitly addressed in the existing literature. This discrepancy might arise because the literature review carried out by this research primarily focused on remanufacturing as a specific topic, rather than exploring industrial and regulatory opportunities from any sustainable practices. For example, scholars such as Nieuwenhuis and Wells (2003) illustrate the changes that the automotive industry will suffer when adopting sustainable practices and how the implementation of these in organizations would allow them not only to comply with regulations, but also to remain current in the market. However, these authors do not delve into the particular opportunities of remanufacturing, as one circular strategy, therefore their conclusions weren’t presented as opportunities for remanufacturing in the theoretical framework of this research. 5.2. Main Remanufacturing Challenges from Literature Review and Data Collection This section presents the remanufacturing challenges identified from the literature and interviews, aiming to provide a comprehensive overview. See Table 7 in Appendix H for a consolidated list of these challenges, indicating whether they were solely identified in academic research, solely by the respondents, or if there is alignment between the two sources in their identification. 5.2.1. Main challenges from ECUs characteristics All the remanufacturing challenges associated with particular characteristics of the ECUs that were presented by the literature, were also identified by the interviewees of Company A. These 34 are the challenges related to the high sensitivity and complexity of the components, the lack of technological developments and automation for effective implementation, the processes of disassembling ECUs for their repair, and the analysis and evaluation required for failure identification. Scholars such as Casper (2021), Kleylein-Feuerstein et al. (2015) and Sundin and Dunbäck (2013) have highlighted the handling of ECUs as a significant challenge, due to their delicate and complex nature, resulting in challenges like their analysis and disassembly. Kleylein-Feuerstein et al. (2015) specifically emphasize that diagnosing and analyzing these parts pose the greatest challenges in remanufacturing processes. Moreover, Wang and Chen (2013) add that carrying out remanufacturing processes on the hardware component of ECUs would be highly complex. Considering these difficulties, the authors suggest that technological developments and the adaptation of automated lines are necessary to facilitate ECUs remanufacturing and enhance efficiency (Casper, 2021; Kleylein-Feuerstein et al., 2015; Steinhilper et al., 2006). These challenges align with the perceptions of the respondents in the case of Company A. On the other hand, the respondents presented additional challenges that were not extensively discussed in the literature, such as the cybersecurity requirements associated with the ECUs software, and the labeling of these pieces. Although these challenges have not been mentioned in the existing literature, they are considered as highly relevant in the case of Company A, since the respondents frequently emphasized the need for modifications in these areas if remanufacturing systems were to be implemented. 5.2.2. Main challenges from strategy and business approaches The challenges associated with implementing remanufacturing in terms of the organization's strategy and business, as identified in both the literature and interviews with Company A professionals, are varied. Firstly, quality and safety risks associated with remanufactured products, are mentioned in the literature in terms of uncertainties from the products recovered (Sundin & Dunbäck, 2013), however, the respondents present them as the risk that one remanufactured product won’t perform as expected, resulting in liability implications and loss of credibility by the customers. Therefore, customers’ acceptance for remanufacturing are another important challenge that respondents and academics such as Gunasekara et al. (2021), Lundmark et al. (2009) and Williams et al. (2014) believe could affect the implementation, as well as their strict product requirements, that currently wouldn’t allow for many modifications nor remanufacturing. For Tier 1 suppliers, customer acceptance is crucial, and without it, the business may be at risk. The investment required for implementing remanufacturing, along with its operational costs, particularly in the initial stages, was recognized as another barrier. Scholars such as Colledani et al. (2014) and Lahti et al. (2018) have discussed the investment aspect, and respondents confirmed the importance of considering the financial implications. Lastly, the supply chain and inventory costs also need to considered when recovering the units from the customers, as stated by Casper (2021), den Hollander (2018) and Parker et al. (2015), among others. In this, professionals also noted that if ECUs are only recovered without being remanufactured, they will only become inventory costs. Regarding the remanufacturing challenges identified in the literature but not acknowledged by the respondents, two possible scenarios can be considered. Firstly, there are challenges that were implicitly recognized by the respondents but may not have been openly addressed since remanufacturing is still something not fully tested by the professionals of Company A, so they may not have had the opportunity to identify specific challenges that arise during more advanced 35 phases. This could be the case for challenges related to the production process, operational planning, and potential rebound effects of sustainability. Secondly, challenges such as core supply and collection, multiple supply sources, and demand uncertainties, which were identify frequently in the literature, and therefore understood as highly relevant, were directly discussed with professionals who possessed appropriate knowledge during the interview sessions. Surprisingly, these challenges were openly dismissed by the Company A professionals, indicating that they may not be considered as significant in the specific context of the firm. This could be attributed to the fact that these challenges are more applicable to companies exclusively dedicated to remanufacturing and operating in the aftermarket, such as contracted remanufacturers and independent remanufacturers. For Company A, an incumbent automotive supplier, remanufacturing could be included as an additional service for its existing customers, allowing to directly collect faulty items from them, and simplifying supplier management, as the customers themselves would serve as the suppliers. Additionally, demand uncertainties may be mitigated since the remanufacturing services would be directly tied to the company's existing client base and the services offered. Finally, the contribution to the research from the empirical discoveries are the challenges related to the cost of sustainability, the brand image risks and potential loss of credibility in case of a problem with a remanufactured product, cradle-to-gate responsibility and control of the products, possibilities of cannibalization of the business of original products, and suspects of perverse remanufacturing incentives. Regarding the cost of sustainability, which is understood in this research as the expenses incurred in adopting more sustainable practices instead of carrying out traditional linear production activities, was not explicitly identified as a distinct challenge by the literature, although instances of this challenge were mentioned by authors such as Casper and Sundin (2018), Seitz and Peattie (2004), and Parker et al. (2015), mostly associated with the costs for the implementation of remanufacturing. Therefore, this shouldn’t be understood as a particular challenge for Company A, nor a significant contribution from the empirics. Instead, more like a confirmation that this is a dilemma that organizations often experience when trying to implement more sustainable practices. 5.2.3. Main challenges from the industrial and regulatory context The challenges associated with remanufacturing arising from the regulatory and industrial context, supported by both empirical and theoretical data, are diverse in nature. Firstly, the existing safety regulations and standards in the automotive industry, as mentioned by authors such as Korhonen et al. (2018), Parker et al. (2015) and Shao et al. (2020), pose challenges for remanufacturing implementation, as they are not necessarily tailored for product repair. However, this research does not delve into the specific reasons behind these regulatory barriers. Another challenge identified by scholars including Johansson and Henriksson (2020), Colledani et al. (2014) and Korhonen et al. (2018), and acknowledged by professionals at Company A, is the uncertainty surrounding the future behavior of the remanufacturing market and the lack of viable business models to ensure profitability. Developing a sound business case becomes crucial for organizations to justify the economic feasibility of implementing remanufacturing. Market uncertainties and a lack of well-defined business models further compound this task. Additionally, the need for clearer definitions of remanufacturing concepts, criteria, specifications, and measurements arises from the inherent uncertainties associated with its implementation. 36 Authors like Ijomah et al. (2004) and King et al. (2006) have set themselves the objective of study and define circular strategies through its researches, in order to provide better guidance and understanding to organizations and societies. Additionally, it has also been identified an industrial lack of know-how, which can hinder the effective implementation and management, as emphasized by Casper (2021), Lahti et al. (2018), Parker et al. (2015), and Seitz and Peattie (2004). Although the lack of know-how was detected as a particular weakness of Company A towards the implementation of remanufacturing, from the literature, it is also perceived as a challenge for the whole automotive industry. Lastly, the establishment of inter-organizational agreements and collaborative initiatives with stakeholders and policymakers presents another significant challenge for remanufacturing, as highlighted by scholars such as Gunasekara et al. (2021), Korhonen et al. (2018) and Lahti et al. (2018). Engaging in these activities introduces risks of dependency on external actors, contractual uncertainties, and challenges in managing relationships. The challenge presented in the literature regarding competition for the remanufacturing market with other players, such as contract or independent remanufacturers (Gunasekara et al., 2021; Seitz & Peattie, 2004), was not mentioned by the interviewees from Company A. It is believed that this challenge may not be relevant for Company A, as their remanufacturing services would initially serve as an extension of their existing services to current customers, rather than competing directly in the aftermarket. However, it is important to note that the generation of new business models and entry into new markets is considered as an opportunity for the company. Therefore, while the competition with other players in the aftermarket with remanufactured products may not be a current concern, it could potentially become a possibility in the future. It is important to highlight that the analysis reveals a significant imbalance between the remanufacturing challenges imposed by the industrial and regulatory context and the associated opportunities. This observation is noteworthy because, in comparison, the challenges and opportunities stemming from the characteristics of ECUs and strategic business aspects are more closely aligned. The challenges posed by the regulatory and industrial context will serve as primary obstacles to the implementation of remanufacturing systems in Company A. 5.3. Remanufacturing implementation in Company A Based on the empirical findings and analysis conducted, the following actions are proposed for the implementation of remanufacturing in Company A, if the organization chooses to pursue this path. Recognizing that this implementation is a long-term strategy, it might be approached in different stages. Initially, a pilot phase could be undertaken to test remanufacturing activities. This phase would aim to evaluate the technical capabilities of professionals, assess client acceptance, and identify the types of ECUs that present more opportunities than challenges for remanufacturing. By conducting this pilot phase, the organization can gather valuable insights and assess the feasibility of scaling up remanufacturing efforts. As confidence in remanufacturing techniques grows and uncertainty decreases, the organization could progress to the next stages. At this point, a systematic implementation of remanufacturing can be pursued for a specific type of ECU or even extrapolating the techniques to other products, integrating it into the company's circular strategy. This approach allows for focused efforts to 37 develop the business and competitive stance of the company, as well as actions to influence the industrial and regulatory context. The following sections provide a more detailed description of both phases and outline the activities necessary to maximize identified opportunities while minimizing or eliminating challenges. These activities leverage the organization's existing capabilities and expertise to facilitate the successful implementation of remanufacturing. See Appendix I for a diagram with the proposed activities for each stage, and the opportunities, challenges, strengths and weaknesses for Company A’s case of remanufacturing that they’ll affect or leverage. In addition, it shows which activities would affect certain specific opportunities and challenges. 5.3.1. 1st Stage: Testing remanufacturing activities During the initial stages of implementing remanufacturing, Company A will likely focus on testing these techniques in small volumes, with its current resources, and on a specific type of ECU. One decision that the organization could consider is to focus on remanufacturing a specific type of fault reason. As highlighted in section 1.2.1 Company A’s Case: ECUs scrapping, from the Empirical Background, the fault analysis process has indicated that roughly 90% of the ECUs failure could be attributed to software problems, while approximately 6% of the units are observed to be in good condition without any detected failures. Hardware-related failures might account for around 2% of the cases, and the remaining 2% have causes that are currently unknown. By choosing to repair ECUs with software problems, Company A could effectively address most of the failure cases, accounting for the vast majority of them, as well as capitalize on opportunities such as the unique nature of software in ECUs, the ease of repair for software-related problems, and the advantage of having ownership and knowledge of the software's source codes. Additionally, it would have greater effects on the ECUs scrapping rates, resources shortages, and the increased demands over electronics on later stages if the firm decides to continue implementing remanufacturing. However, it is important to acknowledge that this type of remanufacturing is not without its challenges, particularly regarding cybersecurity requirements. Additionally, ECUs that undergo failure analysis and are found to have no problems, accounting for approximately 6% of cases, can also be considered for recovery. This approach allows Company A to leverage the opportunities presented by "No Failure Found" cases, which entail no specific challenges identified by the empirical findings. On the other hand, if Company A decides to repair the hardware component of the ECUs, it would address the recovery of 2% of the failed units while simultaneously facing challenges more closely related to this type of remanufacturing. These challenges include the sensitivity and complexity of the components and the disassembly processes. While there are not specific opportunities associated with hardware remanufacturing that have been identified as relevant for the organization context. When it comes to remanufacturing ECUs, there are certain challenges that the company would have to face, regardless of its failure reason. One prominent difficulty lies in the analysis and diagnosis process, which has been identified as a very challenging procedure in literature. In addition, some respondents have recognized that there is still much to learn in this regard, both in the diagnosis of fault causes for software and hardware. A second challenge that could have an 38 effect in this phase is ECUs labeling, since it’s a process that has become a standard in the industry, therefore requiring major efforts for its modifications. Another decision that the company can make during the initial evaluation phase of remanufacturing techniques is to select ECUs by their risks to the safety of passengers in a car. In the automotive industry, the ASIL risk classification system, which stands for Automotive Safety Integrity Level, presents levels of automotive hazards (Synopsys Inc., 2023). These levels range from A, representing the least danger, to D, representing the greatest. If Company A gives priority to lower-risk ECUs, it becomes possible to minimize, although not completely eliminate, challenges related to safety and quality risks, customers’ requirements and acceptance, and risks to brand image and potential loss of credibility. This decision would drastically reduce the risk of automotive accidents if a remanufactured part doesn't perform as expected, allowing the company to maintain its commitment to safety and reliability. Conversely, the decision to remanufacture high-risk ECUs could create further mistrust on the part of customers and expose Company A to greater security risks. One last action that could be expected from the organization in these early stages is the generation of remanufacturing proposals to some of its customers, so that ECUs repair activities are always done with their prior approval. This proactive approach will enable the organization to minimize challenges associated with customer requirements and acceptance, while also laying the foundation for new service opportunities and enhancing competitiveness. It would be advisable to target these remanufacturing proposals towards clients who demonstrate a strong interest in circularity and sustainability, as they are more likely to appreciate and align with such initiatives. Furthermore, these proposals should clearly communicate that the remanufacturing activities are part of the initial stages of a larger remanufacturing system implementation and not a fully consolidated service. This approach will help manage expectations and avoid any potential misconceptions about the extent of the remanufacturing offerings at this stage. To undertake all these proposed activities, Company A would leverage its financial, operational, and technological strengths, as well as its existing knowledge in remanufacturing and ongoing circularity initiatives. As a result of this stage of testing remanufacturing practices on specific types of ECUs and with selected clients, the company could expect to address its weaknesses concerning uncertainties in the remanufacturing process and the lack of know-how. Moreover, this testing phase would facilitate the evaluation of the technical capabilities of the staff, the availability of resources for remanufacturing, customers’ acceptance, allowing for the identification of other strengths and weaknesses, as well as opportunities and challenges. With access to more detailed information on remanufacturing practices, Company A would be better positioned to develop a comprehensive business case for implementing this circular strategy. This business case would enable the estimation of the expected profitability of the project, which is crucial for deciding whether to continue with the implementation. Furthermore, having a well-defined business case allows the company to make more informed proposals to its partners. It creates opportunities to engage in more formal agreements and explore collaborative projects based on mutual benefits. This approach not only strengthens partnerships but also fosters the development of a shared vision and goals in promoting circularity within the industry. 39 Opportunities such as leveraging on the quality of components, capitalizing on increased demand of ECUs, addressing resource shortages, cost savings, among others, are not deemed relevant in these early stages. As previously mentioned, remanufacturing techniques are expected to be tested on low production volumes, thereby minimizing their significant impact on the mentioned opportunities. A similar situation is expected for challenges like technology and automation requirements for efficient processes, costs of sustainable options, operative costs and investments, and various others. 5.3.2. Further stages: Remanufacturing strategy With a deeper understanding of the opportunities and challenges that arise in the early stages of remanufacturing implementation, as well as the required capabilities, Company A can make a more informed decision about continuing this circular strategy within the organization. In the subsequent stages, the organization should evaluate the implementation of remanufacturing at a systemic and operational level, focusing on a specific type of ECU or the causes of failure. Additionally, they can decide how it aligns with their sustainability strategies and circularity ambitions. If Company A chooses to pursue this path, there are new activities in this stage that can leverage the identified opportunities and address challenges. One essential activity is the design of a business model for remanufacturing. This step involves outlining how the remanufacturing activities on ECUs would contribute to the organization's overall business. It aims to define the revenue sources, their generation methods, and associated costs. Additionally, it explores the value proposition of remanufactured products and identifies the target customers who would be interested. This comprehensive assessment enables the organization to better evaluate the profitability potential of the remanufacturing system. Furthermore, the organization can leverage remanufacturing opportunities such as the cost savings, addressing sustainability concerns, compliance with customer requirements, the generation of new services, exploration of new business models and markets, and more affordable prices. While also laying foundations for better compliance with future sustainability regulations and automotive industry trends. This process also helps to reduce uncertainties related to challenges such as the cost of sustainable practices, operative costs and investments, supply chain and inventory costs, cradle-to-gate responsibility and control, potential cannibalization of original products, and perverse incentives for remanufacturing. However, it is important to acknowledge that this process may not be without its difficulties, considering the uncertainties surrounding the remanufacturing market and the lack of successful business models. Taking actions to design the ECUs with remanufacturing practices in mind would unlock additional opportunities while significantly reducing existing technical challenges. The objective of incorporating design for circularity activities is to facilitate the process of remanufacturing through the introduction of changes in de ECUs design, potentially leading to lower efforts for its repairment, lesser production costs and ultimately more affordable prices for customers. Opportunities to maximize the benefits derived from the high-quality levels of the ECUs components are presented. Simultaneously, designing for circularity and more affordable prices would be among other promoted opportunities. Furthermore, design efforts can help mitigate challenges related to sensibility and complexity of components, the need for more advanced technology and automation, disassembly processes, analysis and diagnosis, as well as operational costs and investments. However, there are challenges that would present barriers to design for circularity, such as customer requirements and acceptance as well as safety regulations and automotive industry standards. Currently, significant modifications in product design may be 40 restricted due to customer demands and safety protocols. Furthermore, the lack of remanufacturing concepts and standards will add a factor of insecurity and uncertainty in the development of new designs for circularity. Another activity that the company could undertake is to establish formal agreements with clients for the provision of ECU remanufacturing services, as well as discussions for the introduction of new industry standards. This strategic step allows for better control over the process of recovering faulty parts and enables more accurate demand forecasting. Additionally, these agreements have the potential to foster collaborative projects that align with customer requirements and facilitate the implementation of remanufacturing practices. Such initiatives would unlock various opportunities, including meeting circularity requirements of customers, formalizing new service offerings, enhancing competitiveness, improving the company's brand image and value, exploring new business models, and aligning with sustainability regulations and industry trends in the automotive sector. However, there are several barriers to consider when seeking agreements with partners. These include concerns related to safety and quality risks, meeting customer requirements and gaining their acceptance, complying with safety regulations and automotive standards, and the complications of managing complex inter-organizational collaborations. Nevertheless, if agreements can be reached, some of these challenges can be mitigated, as well as further reducing ECUs labelling and cradle-to-gate responsibility concerns. Given the uncertainties and absence of established standards for remanufacturing implementation, the organization will likely need to develop and define its own concepts. Creating a remanufacturing concept, specifications and guidelines will be crucial for establishing procedures, ensuring control, and establishing performance indicators. This activity has the potential to capitalize on opportunities related to meeting sustainability requirements from customers, further addressing sustainability concerns, and aligning with sustainability regulations and industry trends. It also helps mitigate challenges associated with cradle-to-gate responsibilities, but most importantly, to the lack of remanufacturing concepts and standards. However, the low development of previous concepts and principles can also pose barriers to this activity, as well as customers’ requirements and acceptance. It is important to note that the outcomes of concept development will positively impact other proposed remanufacturing actions, such as the development of circular business models and design for circularity. After successfully forging agreements with other partners in the automotive industry and gaining a comprehensive understanding of the implementation requirements for remanufacturing systems, Company A can proactively generate proposals, in collaboration with industry players, with the aim to address current regulations that impede the adoption of circular practices. These actions would enable the company to minimize challenges associated with cybersecurity requirements for software remanufacturing, ECUs labeling, sustainability costs, safety regulations and automotive standards. Nevertheless, the key barriers lie in managing inter-organizational collaborations to establish a common goal, and attainment of agreements with stakeholders and policy makers. Their engagement with the proposals will require negotiations, and persuasive arguments to convince them of the benefits and feasibility of the proposed changes. Additionally, processes of influencing regulations and obtaining agreements with stakeholders and politicians can be time-consuming and require persistence from Company A. It is important to highlight that by formalizing and scaling up the implementation of remanufacturing, the organization can leverage various opportunities. Firstly, it can tap into the increased demand for electronics and ECUs, contributing to resource conservation and 41 significantly reducing ECUs scrap rates. By integrating remanufacturing practices into their organizational strategy, they can address their customers' sustainability requirements and environmental concerns, thereby enhancing their brand image and increasing their competitiveness. Moreover, this proactive approach prepares them for future sustainability regulations. However, implementing remanufacturing at higher production levels also presents challenges. The organization will need to invest in technological advancements and automation to ensure efficient and profitable processes. The cost of sustainability practices, as well as operating costs are likely to increase along with the level of investment required. Therefore, careful consideration and strategic planning are necessary to effectively navigate these challenges while reaping the benefits of remanufacturing. Company A possesses several key capabilities that will be instrumental in driving these activities forward. First and foremost, its strategic position and extensive industry experience provide a solid foundation for success. Additionally, the company's robust financial, operational, and technological resources offer the necessary support for implementing remanufacturing systems. Furthermore, Company A's commitment to circularity objectives and initiatives demonstrates its dedication to sustainable practices. By leveraging these capabilities, Company A aims to overcome its weaknesses in dealing with uncertainties surrounding remanufacturing systems and the lack of know-how in this area. The activities presented in this whole section have been categorized into two groups: first steps for testing remanufacturing in lower production volumes and further stages for strategic implementation at higher production levels. It is worth noting that no specific order has been assigned to the proposed activities within these groups. When implementing remanufacturing in Company A, it is recommended to pursue activities in each stage simultaneously rather than sequentially. This parallel approach allows for a more efficient and coordinated implementation process, enabling the organization to make progress on multiple fronts concurrently. Furthermore, the section highlights activities that directly address specific opportunities and challenges associated with remanufacturing. However, it is understood that many of these actions will also have indirect implications on other opportunities, challenges, and activities. They are interconnected and interdependent, influencing the overall success of remanufacturing implementation. Moreover, it is important to acknowledge that most likely, there would be additional critical actions that can further enhance the identified prospects and mitigate the difficulties. By approaching the implementation process holistically and considering the interconnections and interdependencies between various activities would be crucial to maximize the desired outcomes and ensure a comprehensive integration of remanufacturing within Company A's operations. 6. Conclusions In the final section of this thesis, the research questions that drove this study are addressed. Furthermore, the implications and contributions of the study are examined, providing significance and relevance to the findings and their contribution to knowledge in implementing circularity strategies, specifically in the automotive manufacturing industry. Lastly, the key limitations of the study are reviewed, along with recommendations for future research on the presented topic, aimed at advancing the field of knowledge. 42 6.1. Answering the Research Questions With the growing environmental concerns and the mounting pressure on organizations to address sustainability, the circular economy has emerged as a promising solution. Among circular strategies, remanufacturing enables companies to repair faulty products, reduce environmental impact, reuse invested resources, minimize waste, and maintain quality standards. This research focuses on the transition from a linear to a circular economic paradigm in the Swedish automotive manufacturing industry, specifically examining the opportunities and challenges associated with implementing remanufacturing for Electronic Control Units (ECUs). Remanufacturing is seen as a specific strategy within the broader concept of circularity, and its applicability to ECUs, a product offered by automotive manufacturers, is explored. Despite remanufacturing being well-known in the automotive sector, its adoption by manufacturers has been limited. Hence, this research aims to provide a strategic and holistic perspective by identifying the potential advantages and disadvantages of implementing remanufacturing. The research is guided by two formulated research questions: RQ1: What are the main opportunities for manufacturers of the automotive industry in the implementation of remanufacturing systems for ECUs? RQ2: What are the main challenges for manufacturers of the automotive industry in the implementation of remanufacturing systems for ECUs? The responses to these questions will be now provided, drawing on the research conducted for this thesis. 6.1.1. Main opportunities for manufacturers in the automotive industry in the implementation of remanufacturing systems for ECUs Opportunities for implementing remanufacturing systems in the automotive industry were classified into three categories: intrinsic characteristics of ECUs, strategic and business-related opportunities, and industry and regulatory-driven opportunities. Regarding intrinsic characteristics in ECUs, these products possess high-quality components, advanced technology, reliability, and added value, making them suitable for recovery strategies that extend their useful life. Moreover, the increasing demand for electronic components and ECUs presents an opportunity due to their integral role in modern vehicles. Addressing resource scarcity through remanufacturing techniques reduces waste and contributes to resource conservation thus constituting another opportunity. Additionally, recovering valuable components from faulty units reduces ECU scrap rates. ECUs have a unique nature, combining software and hardware. Software remanufacturing is simpler and requires less effort compared to hardware remanufacturing. Leveraging the ECU manufacturer's ownership and software repair knowledge opens opportunities for remanufacturing purposes. There are also opportunities to recover ECUs sent for fault analysis that are finally identified as “No fault found” units. Strategic and business-related opportunities include cost savings from efficient resource use, reduced raw material consumption, lower production costs, and waste minimization. Remanufacturing helps solve sustainability concerns and address some customers’ circularity 43 requirements, aligning with the demand for environmentally responsible practices. Cost savings can lead to more affordable prices for customers, enhancing competitiveness and brand value. At the same time, remanufacturing enables new service offerings, innovation through circular business models, and exploration of new markets, contributing to business growth and profitability. Moreover, the opportunity of introducing design strategies for circularity can simplify remanufacturing processes and reduces effort and resources. Remanufacturing opportunities driven by regulations and the industrial context respond to the increasing demand for sustainable practices and environmentally responsible trends in the automotive sector. These opportunities reflect the forward-looking perspectives of professionals and empirical discoveries. 6.1.2. Main challenges for manufacturers in the automotive industry in the implementation of remanufacturing systems for ECUs As the opportunities presented, the challenges associated with implementing remanufacturing in ECUs were categorized into three areas: characteristics of ECUs, strategic and business-related issues, and challenges arising from the industrial and regulatory context. In terms of ECUs' characteristics, one significant challenge is the complexity and sensitivity of their components, making handling and disassembling for repair difficult without causing further damage. These challenges mainly apply to hardware component remanufacturing processes. Although, software remanufacturing also presents challenges, particularly regarding cybersecurity requirements and restricted access to ensure information security. Another challenge is the analysis and diagnosis of faulty units to determine the root cause of failure. Existing failure analysis processes may not always identify the specific component or reason for failure, necessitating technological advancements. Additionally, automation will also be required to ensure effective and efficient remanufacturing processes. However, developing automation for remanufacturing remains a challenge. ECUs labelling poses a challenge as current practices do not allow modifications to indicate whether an ECU has been remanufactured. These labels exist for traceability purposes, therefore reflecting the entire production chain, but they do not permit adding information if the products were remanufactured. Strategic and business-related challenges encompass several key areas. The higher costs involved when opting for sustainable practices, over linear production paradigms, hinder the adoption of remanufacturing. Operating costs, investments in implementing remanufacturing systems, and supply and inventory costs add to the financial and managerial difficulties. Ensuring the quality and safety of remanufactured parts is a significant concern. While professionals’ express confidence in equivalent quality, potential performance issues can have serious consequences for liability, brand image, and credibility. Customer acceptance, design and performance requirements, and cradle-to-gate responsibilities also pose challenges. The industrial and regulatory context presents challenges that, according to this research, outweigh opportunities. Stringent safety regulations and automotive standards make remanufacturing difficult due to the risk of compromising passenger safety. The lack of established concepts, standards, and successful business models further complicates implementation. Modifications to current regulations and standards are necessary, requiring 44 collaboration, alliances, stakeholder engagement and agreements with policy makers, which can be challenging given diverse interests and priorities. 6.1.3. Company A’s capabilities for remanufacturing and proposed actions for its implementation The empirical research conducted on Company A identified strengths and weaknesses related to the implementation of remanufacturing practices. The organization's strategic position and industry experience, financial and technological resources, the fact that remanufacturing practices are not something new for the firm, are identified as strengths. Company A's commitment to circularity and sustainability is also seen as a positive factor. However, there are weaknesses, including uncertainty and a lack of know-how in remanufacturing strategies and implementation. The professionals of the organization consider themselves still in the early stages of developing expertise in this area. Based on the organization's capabilities and a thorough analysis, eight proposed activities are suggested to capitalize on opportunities and address challenges. These activities include identifying suitable ECUs for remanufacturing based on failure characteristics, assessing ECUs safety risks, obtaining customers agreements, developing circular business models, redesigning products for circular practices, establishing agreements with partners, developing industry concepts and standards if necessary, and advocating for regulatory changes to support remanufacturing adoption. 6.2. Implications and contributions The research conducted in this study has significant implications and contributions to knowledge, as well as potential practical applications. Two main conclusions are highlighted here to emphasize the study's key contributions. Firstly, this study addresses a gap in the existing literature by highlighting remanufacturing opportunities associated with ECU features, an aspect that has received limited attention thus far. Through empirical research, the study achieves a better balance between remanufacturing opportunities and the specific challenges related to ECUs. While previous academic literature has predominantly focused on identifying remanufacturing challenges associated with ECUs, portraying a negative implementation scenario, this study provides a more balanced perspective and uncovers new remanufacturing opportunities. On the other hand, the analysis reveals a significant imbalance between the challenges imposed by the industrial and regulatory context and the corresponding remanufacturing opportunities, with the former significantly outweighing the latter. This finding underscores that the regulatory and industrial context presents a substantial obstacle to the implementation of remanufacturing systems. Below some theoretical and practical implications will be reviewed. 6.2.1. Theoretical implications This research has made a significant contribution to knowledge regarding the implementation of remanufacturing systems for ECUs in the automotive industry. It stands out from previous studies in two main aspects. 45 Firstly, this paper focuses on identifying opportunities and challenges specifically for manufacturers in the automotive industry, whereas previous research primarily targeted players in the aftermarket, such as contract or independent remanufacturers. While remanufacturing practices have been more prevalent in the aftermarket, this study recognizes their relevance for automotive manufacturers like Company A and highlights various opportunities for their businesses. Furthermore, this thesis successfully identifies opportunities and challenges specific to ECUs, as one type of products offered by the automotive manufacturers. Existing literature related to remanufacturing processes in ECUs is limited. Although some scholarly articles offer valuable perspectives, they tend to focus mainly on technical advantages and specific technological applications. In contrast, this research takes a holistic and strategic approach to the implementation of remanufacturing in ECUs. 6.2.2. Practical implications The practical implications of this research offer valuable guidance for organizations, particularly those similar to Company A, operating as multinational automotive manufacturers and Tier 1 suppliers in the Swedish or Nordic market. These organizations can derive a holistic perspective on the implementation of circular practices, specifically remanufacturing, from the findings of this study. In addition to understanding the overall opportunities and challenges associated with circularity, organizations can leverage the identified specific advantages of remanufacturing ECUs as a specific product offered by the automotive market. The research also sheds light on the potential hurdles and challenges in the remanufacturing process for ECUs, allowing further guidance to organizations assessing to pursue this circular strategy. To facilitate successful implementation, it is essential for organizations to consider their own strengths and weaknesses, taking inspiration from the capabilities identified in Company A. This will enable organizations to tailor their strategies accordingly. Moreover, to capitalize on the opportunities and address the challenges, organizations are encouraged to support their strategies towards circularity from the actions proposed with this purpose. By following these recommendations, organizations can enhance their understanding of circular practices, optimize their approach to remanufacturing, and navigate the path towards a more sustainable and circular future. 6.3. Limitations and recommendations for future research This research work has identified certain limitations that should be acknowledged. Firstly, the time limits and constraints imposed by administrative aspects of this thesis work, as well as the limitations in document length, have influenced the depth and breadth of the analysis. Additionally, being a qualitative study conducted by a single researcher has restricted the range of perspectives and aspects considered relevant. To overcome these limitations, future research can build upon the findings presented in this study. To enhance the contributions to knowledge on the topic, alternative methodology design strategies could be explored. For instance, a comparative design strategy could be employed to assess the applicability of remanufacturing opportunities and challenges across various companies and contexts within the automotive industry. Similarly, comparing the advantages and 46 disadvantages of remanufacturing ECUs with other automotive products could provide valuable insights for implementation in different goods. Furthermore, certain aspects have not been thoroughly examined in this research. For example, there is a need for in-depth evaluation of circular techniques for software repair in Electronic Control Units (ECUs), as they present specific opportunities distinct from hardware remanufacturing. Additionally, the strategic and holistic focus of this research has prevented the detailed exploration of specific solutions to the identified challenges. Future studies should develop comprehensive action plans to guide organizations in effectively overcoming these barriers. The regulatory context and technical aspects related to ECUs and their remanufacturing have not been extensively studied within the scope of this research. Future investigations should explore the regulatory implications and propose specific solutions to challenges arising from regulations and compliance. Additionally, delving into the technical aspects of ECUs and their remanufacturing, alongside considering sustainability and environmental benefits, would generate valuable insights and contribute to the field. Lastly, it is recommended that future research delve into business models for remanufacturing to identify profitable alternatives that can drive the adoption of these practices among organizations. Investigating different business models will provide organizations with a better understanding of the financial implications and enable them to promote the widespread adoption of remanufacturing. This research has identified limitations and provided recommendations for future studies. 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(2018) 51 Appendix C Interview Guide Sustainability and Circularity Sustainability has been broadly described as a societal goal that relates to the ability of people to safely co-exist on Earth over a long time. The Circular Economy has been presented as an alternative solution to achieve sustainability through the efficient use of resources and waste management. Understanding Circularity, as a system were goods and resources are repaired, maintained and recycled, to extract every bit of use in order to prolong their useful lifespan… 1. How relevant do you think are circular strategies for the automotive manufacturing industry today? 1.1. How relevant do you believe are circular strategies for Company A? 1.2. What do you know about Company A’s initiatives on that regard? 2. What do you think would be the benefits of implementing circular strategies in Company A? Opportunities for Remanufacturing Understanding Remanufacturing as a Circular strategy where used products are returned to "like new" conditions, through their repair and reconditioning, with the objective of reusing the resources applied in their production prior to their recycling, as shown in the next figure. Figure 7: Four Main Circular Strategies 3. What do you think are the opportunities of implementing remanufacturing practices in the ECUs from Company A? 3.1. How do you think this implementation could create opportunities for Company A’s business and strategy? 3.2. Are there special characteristics in the ECUs products and businesses that, in your opinion, could allow for remanufacturing opportunities, in comparison with other Company A products? 4. Do you think Company A has internal capabilities that would strengthen the remanufacturing opportunities (in comparison to other industry actors)? How? 52 Challenges for Remanufacturing 5. What do you think are the challenges of implementing remanufacturing practices in the ECUs from Company A? 5.1. How do you think this implementation could create challenges for Company A’s business and strategy? 5.2. Are there special characteristics in the ECUs products and businesses that in your opinion could present challenges for the implementation of remanufacturing, in comparison with other Company A products? 5.3. Would you consider remanufacturing more challenging for some specific ECUs? Which ones and why? 6. Are there any threats for the implementation of remanufacturing from the industrial context? 7. How do you think Company A could work through these challenges? 7.1. Are there special capabilities that would allow Company A to defeat these challenges? Closing 8. Are there any other opportunities or challenges that you could identify for the implementation of remanufacturing in ECUs? 9. Do you know other circular strategies or sustainability initiatives (such as recyling or recoinditioning) that could have more opportunities to be implemented among ECUs? 10. Is there anything else you would like to add? 53 Appendix D Thematic Analysis Figure 8. Thematic Analysis 54 Appendix E Research Methodology Summary Figure 9. Research Methodology, Strategies and Design Relationships Summary 55 Appendix F Empirical Findings Analysis of Capabilities, Opportunities, and Challenges. Table 3. Main organizational capabilities of Company A identified from interviews. RESPONDENTS CAPABILITIES Total R1 R2 R3 R4 R5 R6 R7 R8 R9 R10 1 Strategic position and experience X X X X X X X X 8 2 Financial, operational, tech. resources X X X X X 5 Strengths 3 Remanufacturing is not something new X X X 3 4 Circularity goals and current initiatives X X X 3 Uncertainty about remanufacturing and Weaknesses 1 X X X 3 lack of know-how Table 4. Main remanufacturing opportunities identified from interviews in Company A REMANUFACTURING RESPONDENTS Total OPPORTUNITIES R1 R2 R3 R4 R5 R6 R7 R8 R9 R10 1 Resources shortage X X X X X X X 7 2 ECUs scrapping rates X X X X X X 6 3 SW characteristic and ease of reman X X X X X X 6 ECUs 4 Quality of components X X X X X 5 Characteristics 5 Increased demand of ECUs X X X X 4 6 "No Failure Found" cases X X X 3 7 OEMs ownership over ECUs SW X 1 1 Cost Savings X X X X X X X X 8 2 Compliance customers requirements X X X X X X X 7 3 More sustainable practices X X X X X X X 7 4 New services to customers X X X X X X 6 Strategic and 5 Competitive advantage X X X X X 5 Business 6 Design for circularity X X X X X 5 7 Brand image and value X X X 3 8 New business models X X 2 9 Affordable prices for customers X X 2 Industrial and 1 Sustainability regulations X X X X X 5 Regulatory 2 Automotive industry transformation X X X X X 5 Table 5. Main remanufacturing challenges identified from interviews in Company A RESPONDENTS REMANUFACTURING CHALLENGES Total R1 R2 R3 R4 R5 R6 R7 R8 R9 R10 1 Sensibility and complexity of components X X X X X X 6 2 Technology and automation X X X X X 5 ECUs 3 Cybersecurity requirements (SW) X X X X 4 Characteristics 4 Disassembly process (HW) X X X X 4 5 Analysis and evaluation X X X 3 6 ECUs labeling X X X 3 1 Cost of sustainability X X X X X X X X 8 2 Safety/quality risks, and guarantees X X X X X X X 7 3 Customers requirements and acceptance X X X X X X X 7 4 Operative costs and investment X X X X 4 Strategic and 5 Supply chain and inventory costs X X 2 Business 6 Brand image risks and loss of credibility X X 2 7 Cradle-to-gate responsibility X X 2 8 Cannibalization X X 2 9 Perverse incentives for reman X 1 1 Safety regulations and automotive standards X X X X 4 Industrial and 2 Lack of reman concepts and standards X X X X 4 Regulatory 3 Inter-organizational collaborations X X X X 4 4 Stakeholders and policy makers agreements X 1 56 Appendix G Main Remanufacturing Opportunities Identified in Literature and by Interview Respondents Table 6. Main remanufacturing opportunities from literature review and data collection REMANUFACTURING Identified in Identified by OPPORTUNITIES Literature respondents 1 Cleaning processes X 2 Quality of components X X 3 Collection costs X 4 Increased demand of ECUs X X ECUs 5 Wireless analysis X Characteristics 6 Resources shortage X 7 ECUs scrapping rates X 8 SW characteristic and ease of reman X 9 "No Failure Found" cases X 10 OEMs ownership over ECUs SW X 1 Quality + Affordability X 2 Reman market projections X 3 Update of components X 4 Stronger synergies with partners X 5 Cost Savings X X 6 Comply w/customers requirements X Strategic and 7 Sustainability concerns X X Business 8 New services to customers X X 9 Competitiveness X 10 Design for circularity X X 11 Brand image and value X 12 New business models (and markets) X X 13 Affordable prices to customers X X Industrial and 1 Sustainability regulations X Regulatory 2 Automotive industry trends X 57 Appendix H Main Remanufacturing Challenges Identified in Literature and by Interview Respondents Table 7. Main remanufacturing challenges from literature review and data collection Identified in Identified by REMANUFACTURING CHALLENGES Literature respondents 1 Sensibility and complexity of components X X 2 Technology and automation X X ECUs 3 Cybersecurity requirements (SW) X Characteristics 4 Disassembly process (HW) X X 5 Analysis and diagnostic X X 6 ECUs labeling X 1 Supply and collection of cores X 2 Production Process X 3 Planning X 4 Many supply sources X 5 Demand uncertainties X 7 Sustainability rebound effects X 8 Cost of sustainability X Strategic and 9 Safety/quality risks, and guarantees X X Business 10 Customers requirements and acceptance X X 11 Operative costs and investment X X 12 Supply chain and inventory costs X X 13 Brand image risks and loss of credibility X 14 Cradle-to-gate responsibility X 15 Cannibalization X 16 Perverse incentives for reman X 1 Competition with other reman actors X Safety regulations and automotive 2 X X standards 3 Uncertain market and business models X X Industrial and 4 Lack of reman concepts and standars X X Regulatory 5 Lack of know-how X X 6 Inter-organizational collaborations X X Stakeholders and policy makers 7 X X agreements 58 Appendix I Proposed Actions for the Implementation of Remanufacturing in ECUs Figure 10. Proposed actions and the effects on particular opportunities and challenges 59