Key indices of the remanufacturing industry in China using a combined method of grey incidence analysis and grey clustering

Abstract Remanufacturing is a critical tool for solving resource depletion and environmental deterioration by reducing raw material and embedded energy consumption. The Chinese government, like many other countries, has been keenly interested in remanufacturing during the past ten years, because of its potential material and energy usage reductions. However, the development of the remanufacturing industry has been unsatisfactory because of little knowledge of its key industry indices. Many potential customers of remanufactured products do not trust the quality of remanufactured products. The major objectives of this paper are to classify the key industrial indices of the remanufacturing industry and to suggest future directions for improvements. To achieve these objectives, this paper used a combined method of grey incidence analysis and grey clustering, which are suitable for distinguishing critical industry indices that can measure the status of development situation of the remanufacturing industry. This approach was successfully applied to a case in Jiangsu Province, China, and consequently developed useful governmental and industrial policy recommendations for remanufacturing enterprises to promote that industry. The research results identified the “total number of employees with a master's degree or above”, the “total number of engineering and technical staff” and the “number of intermediate technicians” as the most appropriate industry indices to reflect the development situation of the remanufacturing industry in China. There are two more important findings. The first is that remanufacturing talents are the most important internal impetus of the remanufacturing industry and should be paid more attention to. The second is that investment in the remanufacturing industry does not have a strong positive correlation with industry characteristics. The “annual revenue of the remanufacturing industry” and huge investment have not played an effective role in promoting this industry so far. The main contribution of this paper is to provide an effective decision-making tool for defining key industry indices that have an important effect on the remanufacturing industry. The tool provides decision-makers a scientific basis for developing and implementing appropriate industry policies and improvement measures to expand the size and scope of the remanufacturing industry in the future.