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Remanufacturing

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Remanufacturing is a process where a particular product is taken apart, cleaned, repaired, and then reassembled to be used again. Remanufacturing has long been associated with expensive technical products, but the technique is spreading. C. Franke and his coauthors, writing in Omega made the point as follows: "Today, the remanufacturing of expensive, long-living investment goods, e.g., machine tools, jet fans, military equipment or automobile engines, is extended to a large number of consumer goods with short life cycles and relatively low values. Reuse is an alternative to material recycling to comply with recovery rates and quantities as well as special treatment requirements" mandated by regulatory authorities. The list today includes mobile phones, tires, furniture, laser toner cartridges, computers, and electrical equipment. Essentially any product that can be manufactured can also be remanufactured. In order for a product to be considered remanufactured, most of its components must be used, although some of them can be new if the older parts are too defective to be salvaged.

Remanufacturing thus has two underpinnings. One is economic and the other is public or governmental regulatory pressure. From an environmental view point, remanufactured good are held out of the waste stream, conserve energy and thus reduce green-house gases, and protect ground-water from potentially toxic leachates—especially important in context of electronic goods. The economic motive is obvious in the case of very massive and expensive products such as machine tools and oceangoing vessels; they can also be quite real if public participation in the return of the products in part subsidizes the costs of their return to a remanufacturing facility.

While the basic concept of remanufacturing is simple, the activity is complex. It requires that a used product be completely disassembled in order to assess its actual condition. If it is determined that remanufacturing is worthwhile, various parts of the product are cleaned, restored, repaired, and replaced. Further refinements are then performed and the product is reassembled so that it once again operates in the way it was originally intended to function. The product is then ready to be used again. Each step in this process is essential to the entire concept of remanufacturing and careful precautions must be taken to ensure that each step is carried out correctly.

RELATED PROCESSES

The reuse of an object can take place after application of different kinds of processes and in various forms. The simplest form of fundamental reuse is recycling, represented by steel or aluminum beverage cans extracted from waste or separately collected which are then reintroduced into steel or aluminum furnaces scrap and may return in some other kind of form to the market.

Similar to recycling is a process of disassembly sometimes referred to as "demanufacturing"—after which the components thus obtained may be handled by recycling processes, remanufacturing methods, direct sale to end users, or by disposal. Many automobiles delivered to junk yards are demanufactured. Engines are removed and sometimes sold to remanufacturers, components pars are sold as found to individuals or repair shows, seats are removed and sold or disposed of as waste, structural components are separated and sold as scrap steel. Ship-breaking follows a similar cycle.

Certain products seen by the consumer as single entities may have the distinct roles of "container" and "content." The classical case is a returnable bottle which ends up, without its closure, at the bottling plant again to be cleaned, refilled with soda, and closed with a new cap. Toner cartridges used in laser printers are such container-content combinations, the cartridge itself designed for reuse, the toner used in printing.

In instances where the product is remanufactured, it will once again end up performing the same function it performed before after a more or less intensive remanufacturing process. To meet the "remanufactured" definition, the product must undergo some extensive process that is significantly more than "repair." A simple example of remanufacturing is the retreaded tire in which the basic inner core of the tire is retained, the remaining tread is cut off, and new rubber is applied and bonded to the core. In essence remanufactured products undergo significant processing beyond cleaning, repair, and maintenance. They are thus restored to a much higher functionality as a "used" product. Many auto parts must be remanufactured for sustained use and represent a major element of the remanufacturing industry.

INDUSTRY SIZE AND BENEFITS

The Automotive Parts Remanufacturers Association (APRA), citing research conducted by Boston University, estimated that remanufacturing had sales of $52 billion in the United States and estimated volume in excess of $100 billion worldwide. In the U.S., more than 70,000 firms are active in some kind of remanufacturing. APRA also cited data from the German Fraunhofer Institute to the effect that energy savings worldwide due to remanufacturing exceed the equivalent of 10.7 million barrels of crude oil. Substantial elimination of solid waste generation and atmospheric pollution follows.

REMANUFACTURING AND SMALL BUSINESSES

Aside from environmental benefits, there are many other reasons why remanufactured goods exist. Like many good business decisions, remanufacturing simply saves money by prolonging the economic life of a product. A small business with a tight budget can save money by using remanufactured products because they often cost less (anywhere between 40 and 60 percent less) and come with warranties and extra services that guarantee their performance.

Remanufacturing is also a business opportunity for small businesses with the appropriate technical skills and equipment deployments. For example, an auto repair business can potential branch out and begin to offer remanufactured goods as part of its services, or a small business that repairs office machines may be able to gain the necessary knowledge to remanufacture related products at the same time as it conducts its normal business activities.

If a small business decides to get into the remanufacturing industry, it must first and foremost study and understand the market. Despite the recent success of remanufacturing, there is still a negative perception among consumers regarding products that contain used parts. Many consumers feel that a remanufactured product is not durable as a brand new one and may require additional maintenance in the future. This is a serious issue that must be addressed before a small business decides whether it is worth it to pursue remanufacturing as a vocation.

Like any business venture, remanufactured products must be properly marketed in order for the company producing them to ultimately succeed. Management must target consumers who will appreciate the fact that remanufactured goods are a great financial alternative to new ones, but educate them enough so that they understand they are not sacrificing quality for price. A sound warranty plan and follow-up calls that gauge the product's performance are also suggested. Like any product or service, a remanufactured product will benefit from positive word of mouth and grow into a solid business because of it.

Inexperienced remanufacturing firms must also be careful not to compete against themselves when marketing remanufactured and new goods at the same time. In addition, management must work with their own employees so that they understand the many benefits of the remanufacturing process. Many employees may be hesitant to offer remanufactured goods to their customers for fear of a potential prejudices regarding the performance of the product.

Most importantly, a small business must have the means at its disposal to locate and recover the products and resources that will be used in the remanufacturing project and ultimately perform the task at hand. Once these products are found, they must be transported to the destination where disassembly will take place. After that, they will most likely be transported to another location that specializes in reassembly. Finally, any unusable parts and products must be collected and transported to recycling centers or other places that specialize in their disposal.

There are many legal and regulatory issues that affect the remanufacturing industry that businesses must be aware of. Intellectual property and anti-trust matters; federal, state and local recycling procedures; and government economic incentives are just a few of these issues. The Remanufacturing Institute is the watchdog organization for the entire industry and they are constantly monitoring these issues and representing the views of the businesses that are involved in remanufacturing. In addition, the federal government requires that all remanufactured goods must be labeled as such so that they cannot be passed off as new products.

BIBLIOGRAPHY

"APRA Urges Trade Barrier Removal." Automotive Parts Remanufacturers Association. Available from http://www.apra.org/GlobalConnection/Nov/G8_Trade_Barrier.asp. Retrieved on 17 May 2006.

Bhamra, Tracy and Bernard Hon. Design and Manufacture for Sustainable Development 2004. Professional Engineering Publishing Limited, 2004.

Debo, Laurens G., L. Beril Toktay, and Luk N. Van Wassenhove. "Market Segmentation and Product Technology Selection for Remanufacturable Products" Management Science. August 2005.

Franke, C., B. Basdere, M. Ciupek, and S. Seliger. "Remanufacturing of Mobile Phones—Capacity, Program and Facility Adaptation Planning." Omega. December 2006.





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