What drives companies towards remanufacturing?
Recovering, reprocessing, remanufacturing and redistributing parts was not an economically beneficial option for manufacturers in the post-industrial revolution linear economy. The picture in the first part of the 21st century is very different, and an increasing number of companies have identified the opportunities of adopting remanufacturing as a larger part of their business, particularly in the aerospace, automotive and construction sectors.
“The security of cores, future spare parts supply and brand protection (market share) are indicated as the underlying reasons for OEM’s taking up remanufacturing”, according to a recent piece by Pankaj Arora for ReMaTec. The key point of Arora’s article being that even beyond the more often stated economic and environmental benefits, there are other critical business considerations where remanufacturing brings advantages, in particular the need to have a secure and consistent material and parts supply.
Of course, facts and figures representing significant business successes also contribute to the building of a positive picture: 30-50% cost savings in parts, 80% less energy, 88% less water, 92% fewer chemical products and 70% less waste production have all been achieved at Renault’s Choisy-le-Roi plant, the most profitable production centre in the automotive manufacturer’s business. Crucially, all of the parts remanufactured at Choisy-le-Roi have the same warranties and guarantee as new components. Perhaps what makes Choisy-le-Roi most interesting, is the fact that the plant has been optimised to maximise the used parts, components and materials: 43% of the carcasses are fully re-usable, a further 48% are recycled in company foundries to produce new parts and the final 9% are valorised through the company’s treatment centres.
There are similar stories in a familiar group of industries, including aerospace and construction, generally sectors where there are large expensive parts. Still, despite the economic information out there and various business drivers, there are still reasons to believe that many are missing out on a potential opportunity.
Identifying the opportunities to instigate even larger scale and broader remanufacturing, and discussing the key barriers, is a speciality of Rochester Institute of Technology’s Dr. Nabil Nasr. Earlier this year, Circulate caught up with Dr. Nasr and recorded this short podcast, which is a must listen for anyone interested in the topic.