Remanufacturing -an example of sustainable practices in production and logistics. Paulina Golińska, PhD Poznan University of Technology

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1 Remanufacturing -an example of sustainable practices in production and logistics Paulina Golińska, PhD Poznan University of Technology

2 Agenda Sustainability What is it remanufacturing Drivers for remanufacturing SIRO project Conclusions

3 Sustainability The Brundtland Commission officially elaborated in December 1987 report Our Common Future in which appeared the definition of sustainability as: development that meets the needs of the present without compromising the ability of future generations to meet their own needs

4 Sustainability challenge New elements of competitiveness - companies have to enter two new elements in their strategy (beside Profitability) People and Planet (the 3Ps). The circular economy by D. Pearce (1990) introduces thinking about the economy as a closed system. It highlights four economic functions of the environment (Andersen, 2007): amenity values a resource base for the economy a sink of residual flows a life-support system

5 Extended supply chain Legislative regulations Macroeconomics supply Production / reassembly distribution customers Improved products & technology reprocessing of materials (re-supply) Dissasembly & inspection collection inspection Enviromental impacts Economic value re-distribution disposal alternative markets

6 Incentives Porter (1991) said properly constructed regulatory standards which aim at outcomes and not methods, will encourage companies to re-engineer their technology. The result, in many cases, is a process that not only pollutes less but also lowers costs and improves quality. the industry practices show that closing the loop can be an answer to problems that companies face: the increasing cost of energy, the increasing cost of raw materials, the increasing cost of waste disposal.

7 Reuse options Reuse of returned product Recycling Reuse as it is Remanufacturing Energy recovery Materials recycling Remanufactured as whole product Remanufactured parts

8 What is remanufacturing Remanufacturing is an industrial process whereby products referred as cores are restored to useful life. During this process the core pass through a number of remanufacturing steps: inspection, disassembly, part replacement/refurbishment, cleaning, reassembly, and testing to ensure it meets the desired product standards (Sundin, E. and B. Bras, Making functional sales environmentally and economically beneficial through product remanufacturing, J. of Cleaner Production, 13(9): p , 2005) (..) By remanufacturing a product may be returned to service with a reasonably high degree of confidence that it will endure (at least) another life cycle (Bras, B. and Hammond, R., Design for remanufacturing metrics. 1st International Working Seminar on Reuse, Eindhoven, November 1996, pp , 1996)

9 What is remanufacturing

10 European perspectives by Prof Rolf Steinhilper

11 American perspective by prof. N. Nasr

12 European perspectives by Prof Rolf Steinhilper

13 European perspectives by Prof Rolf Steinhilper

14 Preferable Product Properties for Remanufacturing RemPro Matrix Source: Sundin E. and Bras B. (2005) Making Functional Sales Environmentally and Economically Beneficial through Product Remanufacturing, Journal of Cleaner Production, 13(9), pp

15 Company incentives of remanufacturing Profit Cost reductions Customer demands New sales models Environment Legislation Moral & Ethical issues Policy Protecting aftermarket Protecting brand Providing additional aftermarket solutions Remanufacturing win-win-win Source: Östlin J., Sundin E. and Björkman M. (2008) Importance of Closed-Loop Supply Chain Relationships for Product Remanufacturing, International Journal of Production Economics, 115(2), pp

16 New business model challenge PSS Toyota Materials Handling Provides 3-7 year long PSS contracts Products after contracts are remanufactured Remanufactured products are redistributed Xerox Assets recovery programme since1987 remanufacturing facilities in the USA, the UK, The Netherlands, Irland, Australia, Mexico, Brazil and Japan Diffrent redistribution chanells

17 Surveys found in literature 1 Study Product Environmental result A. Kerr & Ryan (2001) Photocopier Reman is 19% better B. Sundin & Tyskeng (2003) Washing Machine & Refrigerator C. Lindahl et al (2006) Toner cartridge, Forklift truck & Brake caliper D. Four elements consulting (2008) E. Sutherland et al (2008) Cartridges Diesel engine WM: Greenhouse G: Recycl R: Greenhouse G: Reman Reman F. Kim et al (2008) Alternator Reman New production Reman is 90% better Source: Sundin E and Lee H.M. (2011) In what way is remanufacturing good for the environment?, Proc. of the 7th International Symposium on Environmentally Conscious Design and Inverse Manufacturing (EcoDesign-11), Kyoto, Japan, pp

18 Surveys found in literature 2 Study Product Environmental result G. Gell (2008) Toner cartridges Reman is 25-60% better H. Kara (2009) Gear Box Reman is 34% better I. Kara (2010) Inkjet cartridge Reman is 33% better J. Baustani et al (2010) Dishwasher, Washing machines & Refrigerators Reman is 44%, 32% and 14% better K. Amaya et al (2010) Truck injector Reman is 8-46% better L. Goldey et al (2010) Wireless switch & Wireless base station Reman Source: Sundin E and Lee H.M. (2011) In what way is remanufacturing good for the environment?, Proc. of the 7th International Symposium on Environmentally Conscious Design and Inverse Manufacturing (EcoDesign-11), Kyoto, Japan, pp

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26 Conclusions The sustainability focus could lead to new business opportunities It might help the better utilization of resources Provide new interaction dimensions between companies and their customers

27 Thank you for attention Any questions?