Eco-efficiency gains from remanufacturing A case study of photocopier remanufacturing at Fuji Xerox Australia

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1 Journal of Cleaner Production 9 (2001) Short communication Eco-efficiency gains from remanufacturing A case study of photocopier remanufacturing at Fuji Xerox Australia Wendy Kerr a,*, Chris Ryan a, b a International Institute for Industrial Environmental Economics at Lund University, PO Box 196, Lund , Sweden b National Centre for Design at Royal Melbourne Institute of Technology, PO Box 2476V, Melbourne, Victoria 3001, Australia Received 16 January 2000; accepted 30 April 2000 Abstract Achieving eco-efficient production and consumption systems requires closing the loop to create cyclic systems. Product systems based on remanufacturing, where used products or components are restored to as new condition for reuse, offer the potential to create such cyclic systems. For some existing manufacturers, the economic efficiency of remanufacturing is clear and it has become a widely held assumption that such systems would also be more eco-efficient. However, this assumption has not been systematically tested. This research attempted to quantify the life cycle environmental benefits achieved by incorporating remanufacturing into a product system, based on a study of Xerox photocopiers in Australia. The study found that remanufacturing can reduce resource consumption and waste generation over the life cycle of a photocopier by up to a factor of 3, with greatest reductions if a product is designed for disassembly and remanufacturing. This research represents a first-level assessment, limited by certain estimates and assumptions. It is intended that this research will form the basis of a larger, more detailed study of Xerox remanufacturing, worldwide Elsevier Science Ltd. All rights reserved. Keywords: Remanufacturing; Eco-efficiency; Life cycle assessment; Xerox photocopiers 1. Introduction 1.1. Remanufacturing and eco-efficiency Sustainable production and consumption will only be possible with closed cyclic systems in which resources are recovered from the waste stream at the end-of-life (EOL) of a product. However, a system that closes the loop through recycling may only be slightly more environmentally and economically efficient than one that discards the EOL product as waste. In each stage of a closed recycling system, energy is expended and, depending on the specifics of the system, this may represent a significant environmental impact. 1 Returning * Corresponding author. Tel.: ; fax: addresses: wendy.kerr@iiiee.lu.se (W. Kerr), chris.ryan@iiiee.lu.se (C. Ryan). 1 Specifics include issues of scale, such as the distance over which products and recycled materials are transported. and reusing manufactured components or subcomponents (rather than recycled raw materials) should always be a much more eco-efficient pathway, provided that those components can be reused in the manufacture of another product [1 3]. For this reason, sustainable systems of production and consumption involving manufactured material products are usually envisaged as involving some form of remanufacturing, with the restoration of used products or product components to an as new condition, through refurbishment and/or partial rebuilding. A generic model of such a remanufacturing system is shown in Fig. 1 [1,4 7]. Remanufactured products and components, in principle, serve the same function and are of the same quality as new products. By utilising recovered EOL parts, remanufacturing should be able to reduce the environmental and economic costs of manufacturing and disposing of products and components. With remanufacturing, a much smaller fraction of the EOL resources needs to be recovered through recycling. In addition, intelligent remanufacturing systems provide the opportunity for /01/$ - see front matter 2000 Elsevier Science Ltd. All rights reserved. PII: S (00)

2 76 W. Kerr, C. Ryan / Journal of Cleaner Production 9 (2001) Fig. 1. A generic \nremanufacturing process. product upgrades, thereby extending product life and incorporating less environmentally harmful technology [1,4,7]. By providing customers with remanufactured products, companies can provide the same level of service using fewer resources. In this way, remanufacturing can reduce the resource intensity and increase the ecoefficiency of product systems. The level of reduction in resource intensity that could be achieved by efficient and intelligent remanufacturing systems is a matter of some speculation; data from studies of existing remanufacturing systems have been limited and patchy. To date, surprisingly few other studies have attempted to quantify the environmental benefits of remanufacturing, and none of these takes into account the entire product life cycle. This study was an attempt to begin filling this gap in knowledge by quantifying the

3 W. Kerr, C. Ryan / Journal of Cleaner Production 9 (2001) overall life cycle environmental benefits of remanufacturing, based on a study of the Xerox Corporation s remanufacturing system Remanufacturing at Xerox One of the most widely reported remanufacturing systems is that of the Xerox Corporation, a global company offering products and services for printing, publishing, copying, storing and sharing documents [4,8,9]. Xerox has recovered used equipment since the 1960s, but developed a more formal remanufacturing system in the late-1980s and early 1990s to maximise the profitability of remanufacturing operations. Today, Xerox has remanufacturing programmes for used photocopiers, and print and toner cartridges, from all around the world. It has remanufacturing facilities in the United States of America (USA), the United Kingdom, The Netherlands, Australia, Mexico, Brazil and Japan. By remanufacturing used photocopiers, Xerox has saved millions of dollars in raw material and waste disposal costs. Remanufacturing has also helped Xerox to enhance its image as an environmentally conscious company. Some analysts claim that Xerox s success is due to the fact that its products are robust, large, easy to disassemble, and valuable when remanufactured [2]. Although Xerox s success may ultimately rest on these factors, the company has had to invest substantially over the last ten years to guarantee the viability of its remanufacturing processes [10]. The integration of remanufacturing into the company s overall business strategy has also been critical to Xerox s success Purpose of this study Proponents of remanufacturing claim that it can significantly reduce raw material and energy consumption, as well as the amount of waste requiring disposal. The experience of Xerox in Europe, the USA and Australia generally supports these assertions. However, remanufacturing also has additional system requirements that are often overlooked by those promoting its environmental advantages. For example, additional packaging and transport are necessary to return products for remanufacturing. Energy, water and materials are also required during the remanufacturing process. When assessing the environmental benefits of remanufacturing, it is therefore essential to consider the entire product/system life cycle. The purpose of this study was to analyse a well-established remanufacturing system by following the life cycle of a product, to generate data able to provide a more rigorous assessment of the contribution of remanufacturing to reducing total resource consumption and waste generation. The research was conducted with the cooperation and support of Fuji Xerox Australia (FXA), 2 the International Institute for Industrial Environmental Economics (IIIEE) at Lund University, Sweden, and the National Centre for Environmental Design at RMIT University in Melbourne, Australia. It was planned as a pilot study for a much larger and more comprehensive analysis of the Xerox remanufacturing system worldwide. 2. Study approach 2.1. Outline of approach The study was based on a comparison of the life cycles of remanufactured and non-remanufactured Xerox photocopiers in Australia. The comparison was a quantitative assessment, similar to a life cycle inventory. Four photocopier life cycles were compared: 1. The life cycle of Xerox 5100 photocopiers, assuming there is no remanufacturing. The Xerox 5100 photocopier is a medium- to high-volume, black and white analogue photocopier that was released onto the Australian market in The life cycle of DC 265 photocopiers, assuming there is no remanufacturing. The DC 265 is a fully modular, digital, black and white photocopier that was released by FXA in It has been designed specifically for disassembly and remanufacturing. 2 Fuji Xerox is a partner of Xerox, being a joint venture between Xerox and the Fuji Photo Film Corporation. Fuji Xerox has its headquarters in Japan. It operates in Japan, Australia, New Zealand, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. Fuji Xerox Australia (FXA) is Fuji Xerox s Australian operation. FXA is a world leader in remanufacturing technology. In 1997, its remanufacturing facility in Sydney was voted as Xerox s global benchmark for remanufacturing and the company continues to lead the development of new technology and new remanufacturing programmes. 3 Analogue photocopiers use light lens technology. To begin the copying process, the surface of a photoconductor is electrostatically charged. The image to be copied is projected onto the photoconductor surface using a light lens or laser. Toner moves onto various places on the photoconductor surface by differential charging (based on the image being copied), and is subsequently transferred to the substrate, again through differential charging. The substrate then passes through a heat roller to fuse the toner onto the substrate surface. After this process is complete, residual toner is removed from the photoreceptor surface using a brush or blade. An erase lamp is also used to remove residual voltage on the photoreceptor surface before the charging process recommences. The entire process is repeated each time a copy is made [11]. 4 Digital photocopiers use a similar printing process to analogue photocopiers. The main difference is that, using a digital photocopier, the image is electronically scanned and stored in memory prior to printing. This means that numerous prints can be made from one scan, as compared to analogue photocopiers where the image is rescanned for every copy. This makes digital copying faster and more efficient, reducing the amount of residual toner and the need to continuously charge and discharge different surfaces.

4 78 W. Kerr, C. Ryan / Journal of Cleaner Production 9 (2001) The life cycle of Xerox 5100 photocopiers, assuming these photocopiers are remanufactured. 4. The life cycle of DC 265 photocopiers, assuming there is remanufacturing of photocopier modules. It was assumed for each life cycle that 12 million copies are produced over a maximum period of ten years. The life cycles of manufactured and remanufactured photocopiers were compared based on five parameters: raw materials consumption (measured in kilograms); energy consumption (measured in megajoules); greenhouse gas emissions (measured in kilograms of carbon dioxide equivalents); 5 water consumption (measured in litres); and waste going to landfill (measured in kilograms) Study limitations Owing to data availability and time limitations, the scope of the research was limited in the following ways: The case study assessed the savings brought about from avoided manufacturing and avoided waste disposal. It did not incorporate the potential benefits of product upgrades that may occur as part of the remanufacturing process. The comparison of remanufactured and non-remanufactured photocopiers was limited to the five parameters listed above. There was no inclusion of other parameters, such as toxics dispersion or emissions to air and water. The study was a first-level assessment in which there was no attempt to identify or quantify environmental impacts arising from resource consumption, landfilled waste or greenhouse gas emissions. The study required a number of estimates and 5 Energy consumption provides a measure of the total energy use over the life cycle of a photocopier. However, this measure does not differentiate between different types of energy. This means that the most environmentally damaging energy sources are given the same weighting as less damaging ones. The parameter greenhouse gas emissions attempts to measure in some way the relative environmental impact of the energy mix used over each product life cycle, assuming that, over a photocopier s life cycle, the majority of greenhouse gas emissions are related to energy use. 6 Data on material and energy flows at each stage of each product life cycle were obtained from interviews with representatives of FXA, observations of remanufacturing operations at FXA, unpublished data from FXA, published data on photocopiers and other electronic goods, and LCA databases. These data were entered into Sima Pro 4.0, a widely used LCA software package produced by PRé Consultants in The Netherlands. Using Sima Pro 4.0, the data were analysed to calculate the materials consumption, energy consumption, water consumption, waste generation and greenhouse gas emissions associated with each stage of each product life cycle. assumptions. This means that the results should be interpreted as indicative rather than as a precise measure of the degree to which remanufacturing can contribute to eco-efficiency. In short, this study set out to investigate whether remanufacturing could reduce the resource intensity of a product system. It was not meant to assess the overall life cycle environmental impacts of a photocopier or the remanufacturing of such products Why choose these four life cycles for comparison? The life cycles used for the study broadly reflect historical developments in FXA s remanufacturing activities and those of Xerox internationally; that is, a traditional pre-remanufacturing system, a previous remanufacturing system, and a future remanufacturing system. The first and second life cycles recreate the traditional pre-manufacturing system, with the disposal phase estimated from current data on waste management for electronic and electrical equipment in Australia (and including repair and resale, recycling and landfilling). The third life cycle represents FXA s remanufacturing processes from 1993 to 1998 when there was remanufacturing of entire photocopiers. During this period, FXA had a remanufacturing programme specifically for the Xerox 5100 and data from this programme were used for the study. The final life cycle represents the future of remanufacturing at FXA with remanufacturing of individual modules from modular machines that are designed for remanufacturing. At the beginning of 1999, FXA ceased almost all machine remanufacturing programmes and is instead focusing on module and parts remanufacturing. The shift away from machine remanufacturing is occurring because rapid technological change is reducing the expected life of photocopiers, and hence the economic viability of remanufacturing entire photocopiers. To facilitate the shift towards parts remanufacturing, Xerox has begun developing modular photocopiers such as the DC 265. The DC 265 has seven modules that contain the majority of moving parts in the photocopier. Each module can be removed and replaced in minutes, making disassembly and remanufacturing faster and easier. Modular copiers also offer greater potential for the continual upgrading of technology and the sharing of components between product lines. Photocopiers like the DC 265 are the result of design innovations in modular machines, based on Xerox s experience with disassembly and remanufacturing over the last decade. FXA s machine-based and parts-based remanufacturing systems are described below.

5 W. Kerr, C. Ryan / Journal of Cleaner Production 9 (2001) Remanufacturing at FXA 7 FXA imports products (predominantly photocopiers) and spare parts from the USA, Europe and Japan. It distributes these products, and provides additional services, to customers all over Australia. FXA has its headquarters and remanufacturing facility in Sydney. Most of the equipment returned to the remanufacturing facility comes from Australian customers, although FXA also imports used equipment from countries that do not have the appropriate remanufacturing facilities and programmes to deal with it Machine-based remanufacturing Between 1993 and 1998, FXA remanufactured various types of photocopiers. Remanufacturing programmes tended to concentrate on the more costly high-volume photocopiers. When photocopiers were received at the remanufacturing facility, they were sorted into four categories: test and demonstration models, suitable for refurbishment; photocopiers with one or two months average use, suitable for reprocessing; photocopiers for which there was a remanufacturing programme; and other photocopiers, suitable for asset recovery, sale overseas, or disposal. Refurbishment of test and demonstration models involved cleaning the photocopier and replacing any defective or worn parts. Replaced parts were remanufactured if there was an appropriate remanufacturing programme. Reprocessing involved cleaning the photocopier and replacing all high-frequency service items (HFSIs) such as feed rollers. HFSIs were replaced regardless of condition or use. Other parts were replaced depending on their condition and expected remaining life. Replaced parts were remanufactured if possible. Remanufacturing was a much more labour intensive process that involved disassembling the machine to subassembly level. Subassemblies of good or moderate quality were cleaned, tested and reconditioned. Visible parts were repainted and recoated. The photocopier was then reassembled. If there was a demand, some used machines were exported to countries with less developed markets, such as Taiwan and the Philippines. Asset stripping was used for machines that could not be refurbished, reprocessed, remanufactured or sold overseas. These machines were cannibalised to recover components for use as spare parts. Recovered parts were tested, validated, packaged and placed in the spare parts warehouse, ready for sale to service engineers. Leftover parts were sorted and recycled where possible Parts-based remanufacturing FXA no longer has any machine remanufacturing programmes except for high-speed photocopiers. 8 However, FXA still refurbishes test and demonstration models and reprocesses newer models that are in good condition. When copiers are returned to the remanufacturing facility, they are still sorted into the four categories listed above. Machines that cannot be refurbished, reprocessed or remanufactured are further categorised into: 1. modular photocopiers; 2. photocopiers suitable for resale overseas (which are exported to countries with less developed markets); and 3. photocopiers suitable for cannibalisation for useful and valuable spare parts (which are treated as described previously). Modular photocopiers are disassembled. All parts are cleaned, the modules are remanufactured and tested, and the photocopiers are then reassembled. FXA also remanufactures parts that are recovered from cannibalised copiers. FXA currently has remanufacturing programmes for around 300 different types of parts, including mechanical subassemblies, electronic parts, roster output scanner (ROS) assemblies, and customer replaceable units such as print and toner cartridges. The company is continually developing new parts remanufacturing programmes. Signature analysis is a key feature of FXA s remanufacturing process. Signature analysis has been developed to improve Xerox s testing procedures. Signature analysis is a diagnostic tool to examine critical performance parameters of subassemblies and components. It does this by comparing the signature of a used part to that 7 This information is based on observations of the remanufacturing process and discussions with FXA representatives, including Graham Cavanagh-Downs (Director, Manufacturing and Supply), Patrick Dunn (Parts Recovery Operations Manager), Dan Godamunne (Engineering Development Manager), Steve Godman (Project Manager, Mechanical Subassembly Remanufacturing), Manwinder Mavi (Production Engineer) and Michael Wilson (Production Manager). 8 There are no plans to phase out remanufacturing programmes for high-speed photocopiers because these programmes are still profitable. They are likely to continue to be profitable because FXA has developed ways to upgrade high-speed photocopiers to keep up with technological developments. Through remanufacturing, FXA is able to convert these copiers from analogue to digital photocopiers. It is also able to incorporate new technology into the photocopiers to increase copying speed.

6 80 W. Kerr, C. Ryan / Journal of Cleaner Production 9 (2001) Table 1 The savings achieved by remanufacturing Xerox 5100 photocopiers Xerox 5100 copiers (non-modular) DC 265 copiers (modular) % saving Reduction by a factor of % saving Reduction by a factor of Materials consumption (kg) Energy consumption (MJ) Water consumption (L) Landfilled waste (kg) CO 2 equivalents (kg) of a new part. For example, signature analysis for a motor might measure output current, noise and vibration. Using signature analysis, it is possible to determine the remaining life and performance potential of used parts, including electrical, electronic, electromechanical and mechanical components. the amount of additional transport and packaging required for remanufacturing; and the type and amount of waste generated by discarded products. 4. Can remanufacturing reduce resource consumption and waste generation? The study of the life cycles of remanufactured and non-remanufactured Xerox photocopiers in Australia shows that remanufacturing can reduce resource consumption and waste generation over the life cycle of a photocopier. The results are presented in Table 1. 9 The savings are consistent with the general assertions in the literature on remanufacturing. The results also show that products designed for disassembly and remanufacturing can deliver much greater savings than can be achieved through the remanufacturing of a product that was not designed with this intention. This finding supports the argument that design plays a key role in determining economic and environmental benefits of remanufacturing (see for example [1,4,8,9,12,13]). While the study results are fairly case specific, they point to the fact that remanufacturing can contribute to increasing the eco-efficiency of a product system. The environmental savings that could be expected from remanufacturing will obviously differ according to specific features of the product system such as: the relative environmental costs of manufacturing and remanufacturing processes; 9 It should be noted that the results do not incorporate the resource consumption and waste generation associated with photocopier use. Although electricity and paper consumption during photocopier use are major causes of resource consumption and waste generation, they are deducted from these calculations so that the relative benefits of avoided manufacturing and waste disposal become more evident. Excluding electricity and paper consumption focuses the comparison on life cycle stages that are most relevant to assessing the savings that remanufacturing can bring about. 5. Concluding comments Theoretically, remanufacturing can contribute to more eco-efficient and sustainable product systems. However, the contribution that remanufacturing can make will be limited by the suitability of products for remanufacturing. The suitability of a product for remanufacturing depends on many aspects of the product system, such as product design, the frequency, volume and condition of product returns, transportation distances and costs, the value of remanufactured products and the demand for these products, and the cost of remanufacturing relative to the cost of other alternatives for dealing with EOL products. The results for the DC 265 are encouraging with better than factor 3 reductions in energy consumption (translating into a reduction of factor 2.9 of CO 2 equivalents). Yet, taken together, the resource and energy savings from remanufacturing at Xerox do not support hopes that current remanufacturing systems present a model for future sustainable closed-cycle systems of production and consumption, where reductions factors of 4 to 10 are seen as desirable targets (see for example [14,15]). Moreover, the rapid rate of technological change in many industries, including the electronics and electrical industry, poses another major challenge to remanufacturers. Products life spans are decreasing, thus creating a technological pull away from the environmental principles of longevity, reuse and resource productivity [2,16,17]. For these products, upgrading will become crucial to ensuring the continued viability of remanufacturing, and to ensure that remanufacturing does not merely prolong the life of an inefficient and obsolete product.

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