Technological advances in the automotive sector are producing ever more sophisticated vehicles with increasing longevity. The cars on our roads today are older and wiser. This has opened the door for innovative “spare part” and “reuse” solutions within the remanufacturing industry. Remanufacturers are offering superior alternatives to reconditioning and newly manufactured parts, but their offering is being met by an environment of misconception. Within the automotive sector, both manufacturers and consumers are sceptical of the remanufacturing process so they are instead opting for costly new, or (potentially) inferior quality reconditioned, parts. Such scepticism is the product of unfamiliarity on the meaning and benefits to be reaped from remanufacturing.
Tackling Perceptions – Remanufacturing vs Reconditioning
Time and time again “remanufacturing” and “reconditioning” are viewed as being interchangeable, despite being worlds apart. Grasping the fundamental differences between the two processes will be crucial to confronting misconceptions and hesitation in the automotive sector.
Reconditioning involves stripping, disassembling, cleaning, replacing damaged components and reassembling. Reconditioned parts should attain satisfactory working condition, but the process is unregulated leaving substantial scope for subjectivity. Consumers are consequently left with no assurance of longevity or performance against original equipment manufacturer (OEM) standards and no warranty protection.
In contrast, the remanufacturing process restores parts to at least their original performance in line with original factory specifications and design, but more often than not, achieves a standard greater than that of a newly manufactured product. This is possible because the process provides scope for design improvements and rectification of “kinks” in original designs. Remanufacturers are required to meet standards established by the British Standards Institution which means users can be confident that the parts are safe and of a good quality.
With remanufacturing, there is certainty that parts will be as good as new or exceed original performance, reliability and lifespan. Better still, remanufactured products come with a fresh warranty to provide consumer reassurance and protection.
Given the regulated nature of remanufacturing, there is inevitably a cost to high quality production, namely in equipment and a skilled labour force. This added cost will flow to users and remanufactured parts will consequently be more costly than their lesser, reconditioned peers.
So why Bother?
While equipment and workforce costs drive up the price of remanufactured parts, the enhanced quality and extended lifespan means that remanufacturing represents better value. The remanufacturing process recovers material and the energy content of parts thereby reducing raw material and energy consumption to produce an end product which is typically 40-50 per cent cheaper than a newly manufactured part. Remanufacturing restores value and produces impressive profit margins in a highly price-sensitive market.
While parts are often originally manufactured outside the UK, remanufacturing can take place locally, incentivising the creation of jobs and development of expertise while reducing waiting times and increasing product availability in the UK.
For motorists searching for ways to reduce their carbon footprint and find eco-friendly solutions, remanufacturing presents a process that is kinder to the environment. On average, remanufacturing salvages 85 per cent of an engines original components. This is particularly significant in respect of critical raw material subject to a supply risk. Unsalvageable aluminium, steel and other metal elements can often be recycled to reduce the amount of product that ends up in landfill. By limiting the need for raw materials, remanufacturing typically uses 80-85 per cent less energy than new manufacturing therefore reducing CO2 emissions.
Competition from low-cost new or remanufactured products from Far East countries is becoming a particular challenge, however, whether such parts comply with industry standards and provide the same level of user confidence as UK remanufacturing is questionable. Nevertheless, this is a threat that should not be taken lightly by remanufacturers, but also original equipment manufacturers (OEMs) whose intellectual property rights and reputation could be at risk.
The automotive sector is making technological advances at intense speed, with remanufacturers at risk of being unable to keep pace. Advances have increased the reliability, but also the complexity of parts. In particular, the push towards electronic parts in the wake of clamp downs on emissions, has left remanufacturers with a skills gap in their labour forces. Remanufacturers will need to invest more in building the relevant expertise and capabilities to keep pace with current, and future, technological strides.
Increased complexity of vehicle components and a restrictive approach by OEMs on access to technical information is hindering remanufacturers. Such approach is likely to have been driven by OEMs striving to prevent “copying” of their products. However, this only represents one element of a wider intellectual property debate in the remanufacturing industry.
Watch this space…
An abundance of legal and commercial issues flow from remanufacturing, which we will be considering in future articles, including the intellectual property rights of OEMs.
Overall, remanufacturing re-instils value, quality, economic and performance longevity while reducing environmental impact. Simply put, remanufacturing makes sense.