Process and Facility Planning for Mobile Phone Remanufacturing

G. Seliger ( I ) , C. Franke, M. Ciupek, B. Bagdere Institute for Machine Tools and Factory Management, Technical University Berlin,

Dept. of Assembly Technology and Factory Management, Berlin, Germany.

Abstract

Successful remanufacturing of electric and electronic products must meet the challenges of continuously falling prices for new products, short life cycles, disassembly of unfriendly designs and prohibiting costs in high-wage countries. Mobile phones are identified as suitable products for profitable remanufacturing. A generic remanufacturing plan for mobile phones is developed. For the planning of remanufacturing capacities and production programs a linear optimization model is introduced. In order to analyze the performance of the remanufacturing facilities under consideration of uncertainties regarding quantity and conditions of mobile phones, reliability of capacities, processing times, and demand, discrete-event simu- lation is applied. The simulation model is generated by an algorithm using results from the linear optimi- zation approach. The introduced method allows the continuous adaptation of remanufacturing facilities under quickly changing product, process, and market constraints.

Keywords: Mobile phone remanufacturing, linear optimization, discrete-event simulation

1 INTRODUCTION Today, the remanufacturing of expensive, long living investment goods, e.g. machine tools, jet fans, military equipment or automobile engines, is extended to a large number of consumer goods with short life cycles and relatively low values. Reuse is an alternative to material recycling to comply with recovery rates and quantities as well as special treatment requirements as prescribed by European legislation with the directive on Waste of Elec- trical and Electronic Equipment (WEEE) [ I ] . Market studies regarding offer and demand for mobile phones with GSM standard [2] show the worldwide po- tential for mobile phone remanufacturing. The studies revealed that with a total quantity of over 200 Mio. unuti- lized mobile phones, Europe can serve as a supply mar- ket whereas demand markets can be found in Asia and Latin America, e.g. China and Brasil where market pene- tration is as low as 20% and - in the case of Brasil - where the old TDMA mobile communication standard is replaced by the GSM standard. By means of low cost remanufactured phones, one cannot only serve commu- nication demands of lower income classes in those re- gions, but it is possible to recycle phones complying with WEEE requirements and thus provide services for OEMs within the scope of the directive. In order to evolve mobile phone remanufacturing into a profitable business segment, it is necessary to provide remanufacturers with efficient planning methods and tools, capable to deal with the special procurement, remanufacturing and distribution processes. The tools and methods should allow to determine the cost minimal adaptation of remanufacturing facilities under considera- tion of the fast changing product, process and market situation. The most frequently changing input parame- ters are the type and quantity of mobile phones offered at the market. In Western Europe, with the average replacement cycle of phones being less than 18 months and more than 100 new phone models every year it is feasible to assume that the remanufacturing program

requires adaptation several times during a year. In this paper, an approach is presented to support the remanu- facturing program planning under the above stated framework. The remanufacturing program and required capacities are determined by means of combinatorial optimization. Based on the results, the planner is en- abled to adapt and evaluate the existing remanufacturing facility using discrete-event simulation.

2

In the following, the process chain of mobile phone re- manufacturing is analyzed to identify aspects that need to be considered in the planning of a remanufacturing facility. The procurement of phones can be realized in cooperation with OEMs, e.g. by acquisition of overpro- duction, or in cooperation with net providers, supermar- kets or other private and public organizations who have frequent and close contact to phone users, in so-called take backs. Experience has shown, that consumers are willing to either turn in their used phones as a charitable donation or trade them in for benefits such as free phone minutes [3]. After the take back, phones need to be separated, e.g. from chargers or earphones, and identified. Experience of remanufacturers shows that about 70 percent of phones recovered in Europe and the USA are consid- ered beyond economic reuse, i.e. that either remanufac- turing costs are to high or demand is too low for these phones, and they are consequently sent to material recycling. The remaining phones need to be tested to determine optical or functional faults that can be as- cribed to the main elements housing, printed circuit board (PCB), display, microphone and speaker. The combination of faults results in different process times for disassembly and reassembly [3,4]. Replacement components are supplied either by external procurement or internal retrieval of components from used phones.

CONSTRAINTS FOR PLANNING OF MOBILE PHONE REMANUFACTURING

Experience of mobile phone remanufacturing in the USA has shown, that customers are willing to remunerate value adding upgrades of phones, e.g. software update or surface treatment by polishing. Offering different qual- ity classes for the same phone model is an approach to meet the market demand. Customers show more flexibil- ity in accepting alternative phone models as substitutes, as long as they offer comparable features, such as soft- ware updates. A more elastic demand for mobile phones simplifies the handling of the high variability on the phone procurement side. Future demand could also come from OEMs or independent service entities procur- ing retrieved phone components to cope with post pro- duction supply, i.e. the supply of spare parts to custom- ers and service networks beyond the time of the produc- tion of the product. Recovering components could help to reduce warehousing of large quantities of spare parts over long periods of time, respectively to reduce the extend of the continuing production of spare parts.

3 GENERIC REMANUFACTURING PROCESS CHAIN To enable meeting a cost efficient treatment decision for each phone, a generic remanufacturing process was modeled (figure 1). Options for phone utilization are reuse, components retrieval and material recycling. In case of reuse, three different quality classes are differen- tiated, according to the extent of remanufacturing. Upon arrival phones are separated from accessories and iden- tified. Accessories, e.g. chargers or earphones, are identified and tested to assign them to reuse or recy- cling. Following identification, phones can be sent di- rectly to recycling or can be tested. Faultless mobile phones are assigned to either reuse (ReMobile Class 1) or software update. Updated phones can be assigned to either reuse (ReMobile Class 2) or polishing (ReMobile Class 3). Defective phones are assigned to alternatively manual or automated disassembly, cleaning and reas- sembly. Hereafter, phones can undergo additional value adding processes, i.e. software update or polishing, or be sent directly to reuse. When deciding which phones are to be assigned to which process, certain constraints, e.g. the availability of, and demand for phones and components, the condition of available phones or the cost for and number of re- manufacturing resources need to be considered. The problem of assigning each phone to a cost optimal treatment belongs to the class of combinatorial optimiza- tion. Combinatorial optimization deals with models and methods to find the best solution for problems with dis- crete choices, and is well established in disassembly planning [5]. In the described problem the discrete choices are related to the discrete amount of required capacities for remanufacturing processes and the dis- crete number of mobile phones which are assigned to every remanufacturing process.

4

Based on the generic remanufacturing process, a mathematical model was developed to determine the required process capacities for identification, testing, manual or automated disassembly, reassembly, software update, and polishing for a given number of offered and demanded mobile phones. Available product, process and market data are considered regarding product struc- ture and condition of used phones, operating times for remanufacturing processes, capacities of resources, offer for used phones and demand and revenues for sold phones and components as well as costs for assigned process capacities.

MODEL FOR CAPACITY AND PROGRAM PLANNING

Figure 1 represents all assignment options for products, and all types of remanufacturing resources considered in this model. For example, the decision variable HT,,, describes the quantity of the mobile phone type m with the condition z that is assigned to the process testing after being identified, whereas HY,,, represents the quantity of the mobile phone type m with the condition z that is assigned to recycling. All assigned mobile phone quantities are defined as non-negative integers.

Figure 1: Optional phone treatment. The following sets are used in the model:

Set of mobile phones: M; M = {I, .. . , i}; index m E M

Set of components: C; C = {I, ... ,j}; index c E C

Set of conditions: 2; 2 = {I, ... ,k}; index z E 2. Set of resources: R; R = {I, ... ,I}; index r E R.

Set of processes: P; P = {I, ... ,n}; index p E P Analysed phones can have different conditions regarding the functionality of the five basic mobile phone compo- nents, i.e. housing, PCB, display, speaker, and micro- phone. In this model, only two conditions for each com- ponent - functional and non-functional - are considered resulting in 32 (=Z5) possible phone conditions. Data about the failure probability of mobile phone components is available from market surveys.

The objective in this approach is to maximize the profit margin considering revenues for material recycling RYm, components reuse RCU, and phone reuse, i.e. ReMobile Classes 1 - 1 1 1 RUI,, RUII,, RUIII,, as well as costs CR, for installed resources RQ,.

MAX

The solution is being derived under consideration of constraints for material flow continuity, available re- source capacity, and the demand and offer for phones and components. According to figure 1, the constraints 2-7 guarantee material flow continuity for the remanufacturing program. K, = HT, + HY, Vm,Vz

HT, = HTY,, + HCM,+HCA,, +

HTU, + HTS, + HDM,, + FDA, (3) Vm,Vz

HR, = HDM,, + HDA,

Vm,Vz

HR, = HRS, + HRU,

Vm,Vz

HTS, + HRS,, = HSU,, + HPU,,

Vm,Vz

HTS,+HTU,= 0

Vm,Vz t 2

(4)

(7)

Resources required to perform remanufacturing proc- esses are assigned under consideration of the previ- ously stated requirements of the remanufacturing pro- gram. Decision variables for resource capacities need to be defined as non-negative integers as only whole re- sources can be assigned. Constraint 8 guarantees that the capacity RC, of all assigned automated disassembly stations RQ, is sufficient for the disassembly of all phones assigned to these stations. The disassembly time DAT,,, required for the automated disassembly of the mobile phone type m with a certain condition z is derived by test disassemblies.

~ ~ ( H D A , ~ +HCA,)XDAT, ~ R Q , XRC, m z (8) V r = l Analogical, constraint 9 guarantees the required re- source capacity for manual disassembly, with DMT,,, being the disassembly time required for the manual disassembly of a phone with a certain condition.

,n\ r n z (31

V r = 2 Whether or not a disassembly process of a phone can be automated or not is described by the binary variable

B,, with B,=l indicating that automation is possible. Constraints 10 and 11 guarantee that no phones are assigned to automated disassembly if B,=O.

xHDA,= 0 ~ H C A , = o z z (10) (11)

VrnlB,,, = 0

Constraint 12 assures the required reassembly capacity, considering the time required for reassembly RMT,,,.

VrnlB,,, = 0

xxHR, XRMT,, g RQ, xRC, m z

Vr=3

Constraints 13-17 guarantee resource capacities for identification (13), testing (14), cleaning (15), software update (16), and polishing (17). The process time PT,,, depends on the phone type m, not on the condition z.

The market driven demands for phones and components are being considered in constraints 18-22. Constraint 18 determines the type and quantity of components that can be obtained by manual and automated disassembly of phones assigned to component recovery, and assigns components to material recycling CY, or to the compo- nents for reuse class Recover CU,. BCO,,,,, is the bi- nary variable describing which functional component c can be obtained from phone type m with a certain condi- tion z. Constraints 19 guarantees that the quantity of sold components CU, is not higher than the correspond- ing demand DCO,.

~ ~ ( H c M , , + HCA,,)XBCO,,,= CY,+CU, m z (18) vc

CU, < DCO, vc Constraints 20-22 assure that the quantity of phones assigned to ReMobile Classes 1 - 1 1 1 are smaller than the demand for these classes DUI,, DUII, and DUIII,.

x (HTU,, +HRU, ) g DUI, Z

Vrn

XHSU, < DUII,

Vrn

xHPU, < DUIII,

Vm

Z

Z

5 IMPLEMENTATION The developed capacity and program planning model is described as a combinatorial optimization problem. To solve this type of problem two classes of methods can be distinguished: exact methods, that guarantee an optimal solution and heuristic methods, without any a priori guarantee in terms of solution quality. Exact meth- ods apply mainly tree search technique with complete enumeration and bounded enumeration. For bounded enumeration the branch 8, bound algorithm has been proved to find the optimal solution, yet with non polyno- mial running time behavior [6]. In recent years efficient meta heuristic search methods, e.g. Genetic Algorithms, Evolutionary Strategies, Simulated Annealing, Threshold Accepting and Tabu Search for formulation and solution of complex, reality-based problems have been devel- oped. These heuristics are mainly applied for problems, where enumeration methods would require extremely long computation time, to find the optimal solution. The selection of an adequate method deals with the trade off between solution quality and computation time. Also, the selection of a method depends on the time available for the implementation of the model, and the necessity of adapting the model due to frequently changing decision variables or constraints in the decision problem. In this approach, modifications of the described problem like remanufacturing technologies or possible material flow alternatives are very probable. If the problem complexity, described by number of decision variables and con- straints allows the application of enumeration methods it is advantageous to use standard solvers, e.g. CPLEX, GAMS or LINGO. These solvers are using branch 8, bound algorithms to find the optimal solution, according to the applied data. Solvers provide a modeling lan- guage for a fast implementation of the developed mathematical model. The developed Integer Linear Pro- gramming (ILP) model was implemented using the solver LINGO.

6 FACILITY PLANNING AND EVALUATION To support the planner in the periodic adaptation of an existing remanufacturing system he needs to be enabled to apply the results from the capacity and program plan- ning model efficiently. Simulation models allow the plan- ner to model and test systems under consideration of relevant factory elements, e.g. storage, transport and processing resources. In order to increase the efficiency, simulation models need to be generated automatically under consideration of the results derived by the ILP model. For this purpose the object oriented simulation tool eM-Plant was selected. The software allows to gen- erate and configure predefined object classes, e.g. stor- age and conveyor systems, remanufacturing resources, and workers. The developed algorithm for the data driven generation of remanufacturing facility models creates entities of these object classes and forms an executable simulation model. The required data for the entity configuration is imported via the Open DataBase Connectivity (ODBC) interface from a database where the ILP model results as well as the given model struc- ture of a remanufacturing facility are stored. Figure 2 shows the steps, required data and used software for adaptation and evaluation of a mobile phone remanufac- turing facility. The developed methods, models and data structures support a fast and continuous adaptation of remanufac- turing facilities under quickly changing product, process, and market constraints. However, a conducted sensitivity analysis clarified the enormous sensitivity of the factory in respect to the processing time for dis- and reassembly and the quality of the incoming mobile phones. This demonstrates the challenges in the planning of a re-

manufacturing factory for mobile phones, in particular against the background that there is no firm data about the amount and quality of mobile phones offered at the m arket.

Figure 2: Steps for remanufacturing facility design

7 CONCLUSION The presented approach for capacity and remanufactur- ing program planning by means of combinatorial optimi- zation and discrete-event simulation supports the plan- ner in the periodic adaptation of an existing remanufac- turing system. The process capacities and the remanu- facturing program are determined by the optimization model. Based on these results, an executable simulation model is generated automatically for the remanufactur- ing system considering process capacities, and re- sources for transport and storage. The simulation model allows the planner to determine the required transport and storage capacities, and the performance of the re- manufacturing system.

8 ACKNOWLEDGMENTS This paper presents results of the CRC 281 financed by the Deutsche Forschungsgemeinschaft (DFG).

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