Remanufacturing in Vietnam: key challenges

A 2016 conference document drawn up by Thomas Guidat of the Vietnamese German University points out strategies for improving the circularity of Vietnam’s economy – illustrating the manufacturing and assembly process, recycling, reuse, the earth’s ecosystem and so on. ‘Circular economy as an enabler for sustainable manufacturing in Vietnam: the case of remanufacturing’ also explains the global scale of remanufacturing: aerospace (worth $42 billion), plant/heavy vehicles ($15.9 billion), auto parts ($12.8 billion), IT equipment ($11.5 billion) and machinery ($7.9 billion). The US has the highest remanufacturing turnover, the European Union the most diverse product range, China the fastest growth in remanufacturing, and so on. Against this backdrop, Guidat also shows the gulf between basic repair activities in Vietnam and a clinical, efficient-looking Bosch remanufacturing plant in Ukraine. In Vietnam, he says, there is a bad quality of repaired products, low capacity and high lead time, lots of waste in the process and bad ergonomy for the workers. The Bosch operation, meanwhile, means a “high quality of remanufactured products”, “higher value-added activity”, “reduced waste due to lean application”, and a “good ergonomy for the workers”. Referring to two photographs which show the stark contrast between the Vietnamese and Ukranian repair and remanufacturing operations, he stresses the economic differences which inevitably have a huge impact on the respective processes. A repaired product may cost 5-10% of its original price, but for a remanufactured product, restored to its original high-quality state, that cost may spiral to 70%. Guidat considers remanufacturing to be an intrinsic and natural part of general manufacturing processes. “Our task is not only to tell the students what products can be used, to reach remanufacturing quality, but also to let them understand that remanufacturing has to be a big part of manufacturing,” he adds.