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Introduction - Refurbish/Remanufacture

Remanufacturing and refurbishment is the industrial process whereby used products referred to as ‘cores’ are restored. It is a process of recapturing the value added to the material when a product was first manufactured. The process can be performed on either entire products or the parts that constitute the product.

Remanufacturing is the process of restoring the product or part functionality to “as-new” quality. Reconditioning is the process of restoring the product or part to “like-new”, but the process will not be as thorough as remanufacturing. For example, reconditioning could simply be improving the aesthetics of a product (Gray and Charter, 2007).

The typical process for Remanufacturing is shown below: (Ijomah et al, 2007)

Reman Diagram

Benefits

  • Remanufacture can be twice as profitable as manufacture (Steinhilper, 2006)
  • Progression towards a ‘‘Green’’ company (Subramoniam et al. 2009)
  • Reduce energy, material and other negative environmental impacts of production waste
  • Creates a market for skilled employment (Gray and Charter, 2007)

Considerations

Consideration
Challenge
Opportunity
Price for the customer Price must be low enough to compete against new products. There is also a risk of cannibalising new sales. Reduced price can still allow for healthier profits, new markets and further sales, with reduced manufacturing costs compared to new parts. Cannibalisation is possible, but it can be a benefit if profits are better for remanufacture/ refurbishment.
Core Supply Core supply must be steady to maintain production. Core supply can be incentivised through schemes such as exchange, rebate or deposit.
Quality of remanufactured or refurbished products Product quality must still meet customer requirements. Quality can be restored to 'as new' standards, if not better. Warranties can also be offered for customer reassurance.
Core Quality Poor quality products cannot be remanufactured or refurbished. Quality standards can be placed on cores supplied, third party collectors can sort quality or quality returns can be incentivised through rebates.
Core variability and complexity Variation in cores can cause issues due to design, tolerances and part identification. Variability can be managed if there is control of core supply, processes, systems and people.
Remanufacturing/ refurbishment capability (incl. equipment, experience, skills etc.) Potential investment and transition for equipment, processes, skills and management. Providing a remanufacturing/refurbishment service has multiple financial and environmental benefits.
Continuous improvement (incl. innovation, keeping ahead, Engineering changes) Product designs continuously evolve and reman/ refurb capabilities must keep-up. Keeping up-to-date retains business and can provide opportunities in new areas.

Product Design

To improve remanufacturing and refurbishment, the following should be considered in the design phase, or if the product already has these features there could be potential to remanufacture or refurbish:

  • Ease of disassembly
  • Number of connections
  • Tools required to disassemble
  • Damage caused when disassembling
  • Ease of re-assembly
  • Ease of identification
  • Potential to Upgrade
  • Part modularity (Ijomah et al, 2007)

Collection

There are 3 ways that collection can be managed as show in the diagram:

1. Customer gives the product to the retailer, who passes it to the manufacturer
2. Customer sends product directly back to the manufacturer
3. Customer gives the product to a third party collector, who then passes it to the manufacturer
Reman Collection

(Kumar and Putnam, 2007)


Incentives can improve the rate of product return, the 3 common ways are:

  • Exchange – ‘New’ product or part is provided once the old is returned
  • Rebate - money is given to the customer upon return of product or part
  • Deposit - deposit money is paid at time of purchase and reimbursed when the product or part is returned

(Fleischmann, 2001)

Case studies

  • Graphic Design

    Cummins take engines and parts at the end of their useful life and return them to productive use. Cummins remanufacturing had sales of $1 billion in 2011, remanuafacturing 1,000 components and 2,000 engines. Remanufacturing requires about 85 percent less energy than manufacturing the same product with new parts. Link

  • Graphic Design

    HP offer a variety of remanufactured products which can be purchased for a reduced cost to the customer. The remanufacturing process also includes testing certification and warranty to ensure the high quality standards are met. Link

  • Graphic Design

    Giroflex design and manufacture office chairs. Their 656 chair series has been awarded cradle-to-cradle certification for the closed-loop usage of materials. For ease of remanufacturing, the chair can be totally disassembled in 10 minutes before the parts are reused. Link

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