New perspectives show remanufacturing's full circular economy potential

There’s no silver bullet for decarbonizing the industrial economy. But, according to a growing number of experts across the business, research, and policy worlds, remanufacturing has a definite and important role to play.

Remanufacturing has been in practice for over a century as an industrial process for returning used or worn parts and products to a like-new or better condition. It’s already well-established among a number of leading global manufacturers while a growing number of companies are turning to it as part of their sustainability strategies.

Last October, remanufacturers, policymakers, researchers, and companies new to the sector convened in Rochester, New York, for the 2022 RIC-RIT World Remanufacturing Conference.

The event focused on remanufacturing’s potential as a driver of industrial sustainability. Two days of keynote presentations, panel discussions, and interactive sessions looked at remanufacturing from four strategic perspectives—that of the customer, the policymaker, the designer, and the sustainability executive—to uncover opportunities and challenges facing the industry.

Read on for conference learnings and takeaways based on these different perspectives.

The customer perspective

Remanufacturing can be a complex industrial process. One reason comes down to the logistics required to collect products and components at the end of their life (known as “cores”) from the market. Added to this are the technical challenges that come with managing a nine-step process designed to bring aftermarket materials to a “like-new or better” condition.

But a sole preoccupation on these operational and engineering barriers can blind some companies to the most important problems they need to solve: those of their customers. This is according to Brian Edwards, senior vice president of Caterpillar Inc.’s remanufacturing division (Cat Reman).

Edwards’s keynote presentation argued that remanufacturing’s best opportunity for growth really comes down to how well the industry can meet customers’ needs at a better price. Cat Reman has calculated that it saves 40–50 percent of total production costs through remanufacturing, a savings that can be passed onto its customers.

In 2011, the company introduced remanufactured components for more than 400 unique engines and machine models that are no longer produced new. Not only did this deliver sustainability benefits—it offset the need to extract tons of material to make new vehicles—but it was a tangible cost and value saving for Cat Reman’s customers.

For Edwards, the better companies understand remanufacturing as a cost-saving solution, the stronger the relationship becomes. “I want our customers to be able to come to us and ask ‘Can you reman this?’” said Edwards in closing.

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This question was echoed by Joe Kripli, president of the Automotive Parts Remanufacturers Association (APRA), in a panel discussion. He noted that the recent disruption to the supply of newly made auto parts drove a surge in new customers to APRA members, many of them asking that very question.  

The policymaker perspective 

Lawmakers aren’t resistant to remanufacturing or circular economy—they’re just not aware of it. That’s according to Verena Radulovic, another keynote speaker who is the VP for business engagement at the Center for Climate and Energy Solutions.

Radulovic works with Fortune 500 companies to galvanize business support for climate mitigation and resilience. She helps companies advance climate-related initiatives, such as financial risk disclosure and supply chain sustainability.

“Take a step back and ask yourself, ‘Are people aware?’” she asked the audience.

Drawing on her experience of bringing companies and U.S. policymakers together, she called on remanufacturers to become active “storytellers” and advocates of their industry’s benefits when it comes to decarbonizing U.S. industry. They can do this by joining organizations that interface with legislators, such as policy working groups and trade associations.

She believes remanufacturers can lead a conversation to help legislators expand the focus of climate policy beyond energy supply to include material production. Currently, she explained, concepts like life cycle emissions and material efficiency are not on the table for lawmakers. But, given the significant funding made available through Infrastructure Investment and Jobs Act (2021) and the landmark Inflation Reduction Act (2022), right now is an opportune moment to educate federal and state agencies about the proven benefits of remanufacturing and other resource recovery methods.

Radulovic advised attendees to fully understand the federal protocol for measuring and tracking greenhouse gas (GHG) emissions. Pointing to programs like the U.S. Environmental Protection Agency’s (EPA) GHG calculator and Green Power Partnership, she suggested that they take the time to learn about what companies downstream from them are doing to mitigate climate impacts. This, she stressed, will only allow them to tell the remanufacturing story better.

“Show your customers what you’re doing,” she said.

How well policymakers know and appreciate the value of remanufacturing is not just about far-off future possibilities; the knowledge gap has immediate consequences for the industry. One of the most important being the impact of trade policy on the flow of remanufactured goods and cores.

A common challenge remanufacturers face has to do with how remanufactured products and end-of-life materials are labelled in the trade policies of different countries. In the worst-case scenario, these products and components are labelled as “trash” simply because they don’t originate in an original equipment manufacturer’s production facility.

Sushan Demirjian is the acting assistant U.S. trade representative (USTR) for small businesses, market access, and industrial competitiveness. A returning keynote speaker to the conference, she spoke about the Office of the USTR's efforts to successfully create a dedicated category for remanufactured goods in the 2020 United States-Mexico-Canada Agreement (USMCA). 

Demirjian broke down the USTR office’s current work at the international level to introduce customs regulations at the World Trade Organization’s (WTO) sustainability working group that would support the kind of trade that circular economy demands. These would allow end-of-life materials that can be usefully recovered or recycled to move freely across boundaries.

When asked by an audience member what the industry can do to support more remanufacturing-friendly trade policies, Demirjian echoed Radulovic’s call for advocacy: “Have as many conversations with policymakers as possible. The more voices in the room at the WTO, the more reman will be included in the conversation.”

The designer perspective

“If you’re part of the design process, you can change the game,” said Brian Hilton, a sustainable design technical program manager at the Golisano Institute for Sustainability (GIS) at Rochester Institute of Technology (RIT), during a plenary session on the second day of the conference.

Hilton took attendees on a deep dive into research underway that could revolutionize the industry. The project addresses a long-standing problem that nearly every remanufacturer faces: The products and components they work with were not designed to be remanufactured.

During his presentation, Hilton summarized his work with a group of international firms—which includes Caterpillar, BorgWarner, Trane, ZF Group, and Autodesk—to rethink the remanufacturing process from a designer’s viewpoint.

“Remanufacturing’s potential as a driver of circular economy will remain untapped if we don’t change how products are designed from the get-go,” Hilton has observed previously.

Common design tools, such as computer-aided design (CAD) software, currently cannot take into account what happens to a product that is recovered for remanufacturing. This means that, if a designer wants to make something that is easy to remanufacture, he or she needs to anticipate all the potential steps and variables that would entail by pen and paper—a staggering and impractical task for most businesses.

“Very often designers and remanufacturers in a single company don’t talk,” Hilton said. “Products are designed following conventional rules that don’t anticipate the steps remanufacturers have to take when a product or component reaches the end of its first life cycle.”

Hilton showed how his team created a set of design rules and guidelines based on a careful analysis of the remanufacturing process. These were then used to update existing design for remanufacturing (DfReman) practices.

The collaboration aims to translate the DfReman rules into a plugin that could be installed into the popular CAD tools Autodesk and Creo. Put simply, Hilton says the tool will allow designers to identify the parts or components that are most likely to fail in a product and to then create DfReman rules for them.

The sustainability executive perspective

“‘Sustainability’ means so many things. The words gets thrown around,” observed Kara Fulcher, who is the director of sustainability at Michelin North America. “But a company makes it meaningful to their customers and suppliers by creating transparency around how goals are being measured, what terms mean, and how progress looks.”

Fulcher’s observations are in sync with a report from the 2022 U.N. Climate Change Conference (COP27) conference that calls for “zero tolerance for greenwashing.”

A panel discussion between sustainability executives explored the pressure companies are under to put real, tangible numbers to their climate commitments. How should a company measure its environmental impacts? What impacts are its responsibility? What aren’t?

“The closer a company can align its sustainability efforts to science-based targets, the better,” advised Matt Kupcak, director of global environmental and sustainability at BorgWarner.

Kelvin Sanborn, who is the director of ESG strategy and operations at GE Healthcare, says that companies need to move from a mindset of ROI (return on investment) to one of “risk of inaction.” He believes that the value of incorporating sustainability into how a business works is more about offsetting risks (and the costs they might incur) than unearthing windfall profits. In other words, Sanborn encourages sustainability advocates within companies to ask, “What will happen if we don’t do it?”

But corporate sustainability—also known as environmental, social, and governance (ESG) strategy—is about more than just the environment. Or, as BorgWarner’s Kupcak put it, “the ‘E’ is easy, but the ‘S’ and ‘G’ are harder.”

To explore corporate sustainability through a social lens, an executive conversation on diversity, equity, and inclusion (DEI) was held on the second day of the conference.

“Organizations need people to be their authentic selves if genuine diversity is going to unfold,” said panelist Julian Webb, manager of reman products, global parts at AGCO Corporation.

Johane Domersant, global director of talent supply and DEI at Deere and Company, sees DEI as integral to a talent-acquisition strategy that communicates sustainability. “DEI has to be part of the larger brand narrative and goals,” she said.

The panel’s moderator, Joanne Philips, a senior product compliance engineer at Deere and Company, noted in closing that remanufacturing is “inherently diverse” compared to traditional manufacturing. She explained how the remanufacturing process is perfect for people who not only have a broad range of skills, but who are creative about coming up with solutions.

The remanufacturing perspective

More than 30 years ago, conference co-chair Nabil Nasr asked, “How do we translate the art of remanufacturing into a science?”

Since then, Nasr has founded and continues to lead multiple initiatives to answer that question, including the Center for Remanufacturing and Resource Recovery (C3R) and GIS at RIT. He played a pivotal role in launching the Remanufacturing Industries Council (RIC), whose current board chair, Jeffrey Stukenborg, head of global reman engineering at ZF Group, led the conference with him. In 2016, Nasr spearheaded the creation of the REMADE Institute, a Manufacturing USA® research-and-development consortium dedicated to advancing circular economy for U.S. manufacturing.

The World Remanufacturing Conference complements these strategic efforts that connect the dots between remanufacturing and a decarbonized, sustainable industrial future. By taking in the perspectives of customers, policymakers, designers, and sustainability executives, remanufacturers are, in turn, better able to raise the profile of their own perspective at a time when it is most needed.