Published in: The Proceedings of the 22nd International Symposium on Logistics (ISL 2017), Publisher: Centre for Concurrent Enterprise, Nottingham University Business School, Editors: Kulwant S Pawar, A. Potter, A. Lisec, pp.654-662. Please refer to www.isl21.org for further information and the final version of the proceedings. SUPPLIER RELATIONSHIP MANAGEMENT IN A CIRCULAR ECONOMY: CORE BROKERS IN AUTOMOTIVE REMANUFACTURING Matthias Kalverkamp Carl von Ossietzky Universität Oldenburg, Department of Business Administration, Economics, and Law, Research Group Cascade Use Ammerländer Heerstr. 114-118, 26129 Oldenburg, Germany E-Mail: matthias.kalverkamp@uol.de INTRODUCTION The circular economy is a driving force in a sustainability-oriented industry environment. The awareness for environmental impacts and growing material demand (EC, 2015) per- suade industries to seek for alternatives to linear business models. Accordingly, businesses shift their focus towards sustainability objectives such as described by the triple bottom line (Elkington, 1994). One contribution to sustainability can be the reuse of products due to the residual value hence the potential to conserve resources (Thierry et al., 1995), which ceteris paribus lowers environmental impacts. Remanufacturing as one circular economy strategy experiences a growing interest from industry and policy alike (EC, 2015; Ellen MacArthur Foundation, 2013), inter alia, due to the business case of additional value-added lifecycles, and due its regional demand for labour. Despite positive market projections, the automotive remanufacturing industry claims supply and transparency issues (Weiland, 2012). Experts rather identify supply of cores as an issue than the demand for remanufac- tured products (Steinhilper, 2012; own research). Cores are used components and the key commodity for remanufacturing. The increasing variety of new components challenges the remanufacturing Supply Chain (SC). Increasing data on component variety hampers the identification of correct cores. Therefore, middleman, so called core brokers, play a crucial role in consolidating cores in the independent reverse SC for remanufacturing. Core brokers deal with cores, which they acquire mainly at vehicle dismantlers, and they distribute cores to remanufacturers. Through a manufacturing-like process, remanufacturers turn these cores into components (spare parts) of a quality comparable with original new components. A brief analysis of the market regarding the core broker following Porter’s (2008) ‘five forces’ model of competitive rivalry shall help to understand the importance of supplier relations between core brokers and their suppliers. The most important threats for core brokers stem from the bargaining power of dismantlers and from substitutes. Dismantlers have different sales options besides remanufacturing, mainly material recycling, and the costs of part dismantling can challenge their profit margin. If remanufactures fail in their key challenge of coordinating supply and demand, substitutes in the form of part copies may reach the market earlier than remanufactured parts. The copied part substitutes the remanufactured part hence indirectly substitutes the core broker’s key commodity. The threat of substitutes extends to the bargaining power of the customers, i.e. the remanu- facturers, who, by far, represent the predominant distribution channel for core brokers. Especially labour and resource costs drive remanufacturing profitability. Therefore, the core price is a major factor for the profitability of remanufacturing. The market forces due to the threat of entry are relatively low, because core brokers need to establish relations to a high number of dismantlers and must develop a deep understanding of cores and their demand patterns. According to market experts, the rivalry between core brokers is rela- tively high, which already reduced their total number. Identifying reasons and potential solutions for these challenges motivates this research. Improving core supply may increase the potential contribution of remanufacturing to the triple bottom line. Especially important are supply uncertainties and risks due to the bar- gaining power of dismantlers and the core supply lead-time. Therefore, the driving research questions is how independent actors in the remanufacturing SC implement supplier rela- tionship management. A focus is on core brokers and dismantlers. The study leads to im- plications for independent reverse supply channels in remanufacturing.