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REMANUFACTURING
THE PATH TO SUSTAINABLE GROWTH
Maggie Slowik, global industry director for manufacturing, IFS, explains the process of remanufacturing and the crucial role of data capture, AI and IoT
he process of remanufacturing involves taking used or old parts and products, dismantling them, and returning them to a like-new, same-as-new, or better-than-new condition. Today this sector is experiencing dynamic growth, with Oakdene Hollins Research and Consulting projecting an EU market potential of €90bn by 2030. This forecast highlights remanufacturing as a critical component of the future of manufacturing industries. It is an approach that not only helps companies reduce waste and carbon emissions but by integrating remanufacturing into their operations, manufacturers can establish circular supply chains, where products and materials are continuously cycled back into production. This reduces dependence on virgin raw materials, saving costs, and creates a more resilient supply chain that can better withstand fluctuations in material availability and costs. Advantages also include the possibility of tapping into new market opportunities. Several factors are fuelling market growth. The increasing demand for sustainable solutions is a primary driver, increasing demand for remanufactured products. This trend is evident in the automotive industry, where manufacturers like Renault and BMW have implemented remanufacturing programmes to support sustainability and address consumer demand for environmentally-friendly products. Additionally, regulatory pressures are playing a significant role. The European Union's Circular Economy Action Plan and the
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forthcoming Corporate Sustainability Reporting Directive (CSRD) are pushing companies to adopt more sustainable practices, including remanufacturing. For example, the EU's Ecodesign for Sustainable Products Regulation (ESPR), which includes requirements for product longevity and recyclability, directly supports remanufacturing efforts.
Despite the promising trajectory, many companies only partially engage in true remanufacturing practices. One of the main barriers is the difficulty in accessing and integrating the right Environmental, Social, and Governance (ESG) data within operational systems. Effective remanufacturing requires comprehensive data management to track the lifecycle of products, assess their condition, and determine their remanufacturing potential.
Another challenge is the establishment of return logistics paths to collect used products. Traditional linear manufacturing models do not account for the return of end-of-life products, necessitating the development of new logistics strategies. For instance, companies must decide whether to incentivise returns through deposits or buy- back programs, similar to the recycling schemes used for beverage containers. In the
Ultimately, the integration of remanufacturing into business models not only promotes environmental sustainability, but also drives economic growth
electronics sector, companies like Apple have launched trade-in programmes that encourage customers to return their old devices, which are then refurbished and resold. To fully embrace remanufacturing, organisations need to overcome these data accessibility barriers and commit to sustainable business models. Companies must develop robust data management systems that can capture and analyse ESG data effectively. This involves automating data collection from various sources, such as supplier invoices and product usage reports, to track environmental impacts and identify opportunities for improvement. Developing efficient return logistics is crucial. This can involve partnerships with third-party logistics providers or creating incentive programs for customers to return used products, as previously mentioned. Advanced technologies such as AI and IoT can enhance remanufacturing processes. AI can help design products for easier disassembly and reuse, while IoT devices can provide real-time data on product usage and condition, facilitating more accurate assessments of remanufacturing potential. In line with this, companies are using IoT sensors to monitor the condition of machinery, allowing them to predict when components will need remanufacturing. As the machinery ages, IoT can initially be used to predict when a component needs repairing. Then when the component is beyond repair and is up for remanufacturing, the data collected provides in-depth insight into the state of the component and what elements of it can be used again.
Remanufacturing offers significant financial advantages, including cost savings and new market opportunities. By reusing existing materials, companies can reduce the costs associated with raw material extraction and processing. This approach aligns with the circular economy’s goal of creating closed- loop systems where products are continuously reused, repaired, and recycled. To capitalise on the growth of
remanufacturing, companies must overcome challenges related to data integration and return logistics. By doing so, they can achieve financial benefits, reduce environmental impacts, and position themselves as leaders in the transition to a circular economy. IFS
www.ifs.com 28 JULY/AUGUST 2024 | PROCESS & CONTROL
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