The Lure of 'Like New': Remanufacturing Arrives

by Derek Guest

Source: FTI Journal

Remanufacturing is a series of steps that return a product to "like new" performance, with a similar or extended warranty to match. Remanufacturing can provide consumers with products that are up to 40 percent less costly than new products while significantly lessening the environmental impact of their production. Remanufacturing is where good business and good corporate citizenship meet. However, remanufacturing processes cannot simply be bolted onto existing manufacturing systems. Remanufacturing requires a dedicated return- management process and different financial and demand-planning models. This makes remanufacturing adoption challenging for many companies in a variety of sectors. This article describes those challenges, discusses how to meet them and explains ways to use remanufacturing to gain competitive advantage.

The take (raw materials from the earth) — make (add energy to the raw materials) — dispose (in toto or piecemeal) linear business model of most traditional global manufacturing is becoming ever more unsustainable as the world comes to understand that the earth’s resources are finite and rapidly becoming depleted.

Some 65 billion tons of raw materials entered the world’s economic system in 2010, and that figure is expected to grow to about 82 billion tons by 2020. At the same time, solid waste in OECD (Organisation for Economic Co-operation and Development) countries, which rose 40 percent from 1980 to 1997, is projected to increase another 40 percent by 2020.

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