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Remanufacturing: an opportunity

Remanufacturing is a concept with potential for confusion, so it is worth noting that the British Standards Institute defines it as ‘returning a used product to at least its original performance with a warranty that is equivalent or better than to that of the newly manufactured product’. This illustrates a crucial difference from definitions of repair or reconditioning, as the user of a remanufactured good can expect to have the same performance as a brand new item, having had any worn out components replaced.

Although it has a lower public profile than recycling, the remanufacturing sector in the UK is still significant in economic and environmental terms. According to the Centre for Reuse and Remanufacturing (CRR) it has an estimated value of £5 billion, representing UK-wide savings of 270,000 tonnes of raw materials and 800,000 tonnes of CO2 equivalent.  The majority of this is within the businesses to business sector and is spread across a range of specialist industries. A CRR survey in 2009 found that the greatest proportion of remanufacturing by value was found in the toner and ink cartridges sector , beyond this the highest proportion of remanufacturing is found in sectors associated with mechanical or powered machinery.

Cost-effective product recovery is integral to the whole remanufacturing approach and has had a profound effect on the traditional make-and-sell business model. It has led to the development of closed loop manufacturing systems requiring a high degree of recyclability or reusability to be integrated into a product at the design stage and has seen a shift in skills towards repair and re-making. This post-purchase support and maintenance of products is known as ‘servicisation’ and, generally has a higher labour content than manufacturing. It has attracted the attention of the Department of Business Innovation and Skills (BIS) and is promoted as part of its New Industries, New Jobs Agenda.

Businesses seem to have woken up to the benefits of remanufacturing, but why has it not taken off in consumer facing industries? As with broader attitudes to reuse, despite widespread professed interest in the environment, it seems the public just aren’t convinced, especially when it comes down to quality. Although hampered by a lack of research, the CRR conclude that there are two broad public attitudes: those that buy second hand for financial reasons, but wish that they did not have to; and those who have a choice but do so based on a variety of motivations including economic, individuality, environmental or even political.

This public unwillingness has created an apparent logjam, where manufacturers are unwilling to promote remanufactured goods because of customer unwillingness to accept them. Apart from isolated examples, remanufacturing for consumers has remained in restricted product categories, such as retreaded tyres, ink and toner cartridges and single-use cameras.

But there are some encouraging signs. Mobile phones are arguably the defining status symbol of the last 10 years, with rapid developments in technology and changes in fashion leading to short obsolescence times. According to industry body Telephia, 27% of European mobile users replace their phones every year. With the widespread use of contract packages, however, the servicisation of the sector means that once handsets are no longer needed, customers are incentivised to return them in return for cash or discounted upgrades. This gives manufacturers access to their own handsets, which they have the technological know-how to remanufacture, and even encourages customers to take better care of handsets during use for greater value at end of use. Handsets can then be refurbished and resold in markets with greater acceptance of older technology. This model could act as a template for other electrical and electronic items: why not buy a TV as part of a cable and satellite package, with an opportunity to upgrade after a year or two?

The question we need to address as waste managers is how can we, from our end of pipe perspective, encourage this to happen at the front end? A good start would be a concerted attempt to improve the public perception of remanufactured goods, with quality guarantees and favourable cost differentials. It underlines the importance of the need of extended, and individual, producer responsibility, helping manufacturers to see a clear and private benefit from designing items that are easier to reuse, remanufacture, recycle, and longer lasting - and providing an equally transparent penalty for not doing this.

Mike Webster is a senior consultant at environment charity Waste Watch

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