Remanufacturing – Reasons that Make a Rebirth for Old Parts Valuable to Businesses

“Remanufacturing is a standardized industrial process by which a previously sold, worn or non-functional product is returned to the equivalent, or better, condition and function of the new original product. The remanufacturing process incorporates technical specifications and yields a fully warranted product.”– ISO.

The remanufactured automotive parts industry is estimated to be an approximate $85-100 billion industry worldwide, as per the reports from the Office of Transportation and Machinery, U.S. Department of Commerce (2011).

Let us analyze the reasons that make remanufacturing valuable to businesses.

Low-priced: Automotive Parts Rebuilders Association (APRA) suggests that about 88% of the original parts are reused in remanufactured machines. Remanufactured products are priced 20-40% lower than equivalent new products and come with an equivalent version of warranty terms. New product warranties cost 1-4% of its sales revenues, and if you do the math, an equivalent remanufactured warranty cost is lesser for the OEMs.

The remanufacturing process usually begins with the OEM’s exchange policy to push new product sales and product returns from warranty programs. Lack of new parts, retention of old technology or up-gradation of technology into old parts and environmental consciousness are other incidents that trigger remanufacturing.

As Good As New: A remanufactured part goes through the same level of processing and testing as a new product and often turns out to be better than the original.

Remanufacturing a part created ten years ago will always give us the advantages of the technology & engineering improvements, giving us apart with improved specifications. While new parts like transmission come with a year’s warranty, a remanufactured equivalent comes with a 3-year warranty.

The remanufacturing process comprises of rigorous testing and sorting where broken/worn parts that do not match industry standards is discarded. The selected parts are cleansed/inspected and fabricated where new components are installed and reassembled. The final product undergoes an even more strenuous testing process including visual inspection and mechanical tests such as decay testing, gauging and crack detection.

Collecting, inspecting, disassembling and replacement/reprocessing worn-out parts are some basic steps to be followed as per ISO standards (ISO/TS/P 239 is the quality standard followed for remanufacturing). This process is backed with robust documentation and appropriate warranty issuance. Such an established process ensures a certain level of quality.

Compensates for new part demand: OEMs tend to stock spare parts that are fast-moving. These fast-moving parts are manufactured after a lot of planning –planning involves identifying market demand, accounting for buffer stock and plan for setups at the shop floor to manufacture parts in huge quantities.

Slow-moving parts fit into fewer machines and are not produced in small quantities as the costs associated are higher. This demand gap is met by remanufactured parts.

Meeting the demand on time translates into reduced machine time and improved customer satisfaction for the OEMs.

Sustainable Manufacturing Methods: In remanufacturing, the parts are closely inspected for reuse and undergo multiple steps of cleaning, segregation and reprocessing before it is fitted into the main machine. This way, the chances of parts directly reaching landfills are reduced.

Since remanufacturing encourages reuse and reprocess of existing parts, this saves the energy and water consumption required to produce new parts. It also reduces the impact of emissions and effluents as a by-product of manufacturing.

Remanufacturing extends the life of existing parts and ensures that sustainable manufacturing methods are followed.

Benefitting from an economical, qualitative and sustainability perspective, Remanufacturing is making new inroads in the industry and is here to stay.

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