Remanufacturing DOES save money and resources – and here’s the proof

A new German study has used case studies to quantify exactly how much companies can save by remanufacturing. UIrike Lange picks out some highlights

A new study has highlighted the resource efficiency potential provided by the reuse of cores – allowing companies to reduce costs and strengthen their competitive advantage over the long term. ‘Ressourceneffizienz durch Remanufacturing – Industrielle Aufarbeitung von Altteilen’ (Efficient use of resources through remanufacturing) was produced by the VDI Zentrum Ressourceneffizienz (Centre for Resource Efficiency) (VDI ZRE) and uses various case studies to highlight its arguments. In the manufactur-ing industry, material costs can reach more than 40% - often the largest cost factor in the company. Remanufacturing makes it possible to save material and energy expenses. The report has quantified this precisely, finding that reman:

• made it possible to achieve up to nearly 90% reduction in emis-sions and materials

• used 56% less energy compared to equivalent newly-manufactured products

• Some reman products can be offered at approximately 40-80% of the acquisition price for an equivalent new product

The resulting savings for manufacturers and customers only arise, howev-er, in the presence of:

• return system for core parts

• remanufacturing process

• marketing of reman products

Return system of core parts
An adequate return system is one of the key prerequisites for a remanu-facturing company to operate in an economical manner. Corresponding procurement management or acquisition must ensure that there is a steady supply of quantities of core parts over time with consistently high quality and reasonable prices to the extent possible. A low market quantity of products complicates return logistics while market saturation reduces the demand for remanufactured products in the marketing stage.

Remanufacturing process
The design of the remanufacturing process must be adapted to the type and variety of the core parts and must be economical - the costs of tech-nical measures should not exceed the income from remanufactured prod-ucts. In particular, it is currently not yet or barely possible to inspect core parts on the basis of automated process steps; in particular, manual visual inspection is necessary and requires specific expertise, that is, adequately qualified employees. Furthermore, the logistics system and associated transport expenses must efficiently network return channels, remanufac-turing locations and available marketing channels.

Marketing
The remanufactured products must have a reasonable product value, that is, there should be constant demand to ensure successful marketing. It is as such more difficult to remanufacture short-lived electronics than automo-tive products like starters or alternators, which are used over longer peri-ods of time. Having an established aftermarket is also helpful. Furthermore, the sales channels where the remanufactured products are offered must continually be readjusted and adapted to the requirements of the custom-ers and current market developments.

Market development
By 2030, the Europe-wide remanufacturing industry is expected to grow by more than 50%. If political and economic conditions are favourable, it is expected to grow more than three-fold. This emphasises the growing im-portance of remanufacturing for industrial production and also opens up further potential for the efficient use of resources. The new study serves to give small- and medium-sized business ideas on how to implement re-manufacturing processes, create incentives for the use of reman products, raise awareness for the efficiency potential of remanufacturing – and also to encourage further exploration of this topic.

• An extended version of this article can be found at www.rematec.com

• ‘Ressourceneffizienz durch Remanufacturing – Industrielle Aufar-beitung von Altteilen’ is available in German at www.ressource-deutschland.de/publikationen/kurzanalysen. An English translation will be available later this year.