Back in the late 1980s, Rochester
Institute of Technology (RIT)
industrial engineer Nabil Nasr was doing design work for marquee
companies ranging from Ford to Johnson & Johnson to Xerox. He
noticed that the lifespan of many components was much longer than
the products that contained them, things like copiers and medical
equipment. Why not put these bits and pieces to use again? reasoned
Nasr, who in 1992 published a paper on the merits of “remanufacturing.”
Unlike most scholarly papers, however, this one caught the eye of
the Associated Press, the international news syndicate. Nasr’s
notions of gleaning cash from trash ended up running in around 500
newspapers. That’s when the remanufacturing industry came
The “reman” industry wasn’t new. Mostly comprised of small- to medium-sized companies, it dates back at least to the early days of automobile plants. Indeed, remanufactured car parts remain the industry’s mainstay. While reman execs reveled in Nasr’s attention, what they really liked was the idea of taking a more scientific, technological approach to their craft. So they—and the U.S. Department of Energy—gave Nasr $125,000 in 1995 to conduct a two-year investigation into remanufacturing techniques. “I discovered the whole industry was based on art,” Nasr recalls, meaning if a method worked, it was used, no questions asked. “I saw the opportunity to translate art into science,” he explains, to understand why and how techniques worked so they could be transferable or perhaps improved.
Next, along with another engineer and a few grad students, Nasr
set up a center at RIT dedicated to the study of remanufacturing.
As the industry expanded well beyond auto parts and became more
technically astute, Nasr’s venture blossomed with it. It’s
now the National Center for Remanufacturing and Resource Recovery
(NC3R), perhaps the country’s leading academic center for
applied research in remanufacturing. The organization, part of RIT’s
Center for Integrated Manufacturing Studies, which Nasr also heads,
has $12 million in research grants (an amount that’s also
growing), employs 40 researchers and has facilities that occupy
70,000 square feet of space. It’s also at the center of a
fast-growing, $53 billion industry that employs 480,000 workers
and now includes such big names as Caterpillar, Xerox and Boeing.
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Waste Not, Want Not
Remanufacturing is not the same as refurbishing a product, which merely replaces the degraded parts. Rather, it’s like “bringing the odometer back to zero,” Nasr explains. In reman, a product is completely disassembled, with as many components as possible—ideally all of them—salvaged and cleaned to a good-as-new state. The newly enhanced parts are then reassembled into a born-again product. For lots of goods, it’s a process that can be repeated many times over.
“Remanufacturing represents perhaps the largest untapped resource for productivity improvement in American industry,” raved Ron Giuntini, executive director of the OEM Product-Services Institute, in a 2003 Business Horizons article he wrote with Kevin Gaudette, a Ph.D. business student at Indiana University. What’s the attraction? Reman products cost less than half the price of new goods to make because they involve lower materials and energy expenses as well as less waste. Indeed, waste can go from being a drag on the bottom line to a source of revenue.
For instance, Nasr notes, there are now several businesses competing to get their hands on what was once junk: empty toner cartridges used in copiers, which are rebuilt and sold as “recharged” cartridges. The industry’s customers benefit, too. Reman goods are often 50 percent to 75 percent cheaper to buy than new ones.
Heavy-equipment maker Caterpillar is the leading multinational purveyor and proponent of remanufacturing. BusinessWeek says its reman unit had sales of $1 billion in 2005. The company’s spokesperson, Anne Leanos, won’t confirm that amount but notes “it is one of the fastest-growing divisions at Caterpillar.” And the firm expects the entire sector will continue to grow. Reman is “also seeking out other opportunities,” says William Hauser, a Boston University engineering professor who has studied the industry with his colleague, Robert Lund. In addition to remanufacturing its own diesel engines, for example, Caterpillar is remaking rail and automotive goods.
Beyond diesel engines and auto parts, reman products typically include aircraft engines and tires, compressors, automated teller machines and office furniture. In the past, the industry tended to focus on durable goods that weren’t susceptible to rapid changes in technology. “But the reman industry of today is different from five years ago,” Nasr says. Copiers and other frequently upgraded products are now fair game for reman makeovers. Even such stalwarts as diesel engines must meet ever-changing fuel and air quality standards and thus require frequent tech upgrades.
Nasr says fast-changing technologies have “not weakened the case for remanufacturing” because the industry easily keeps up with them. “It is almost exclusively a B2B (business-to-business) industry,” Lund says, but a small number of remanufactured products can be sold directly to consumers. Staples, Office Depot and other office-supply chain stores sell those “recharged” toner cartridges—often at a sizable discount compared with new printer and photocopier ink. Motorola ships cell phones with remanufactured innards as warranty replacements. And, except for their outside casings, single-use cameras can be remanufactured up to 10 times.
Remanufacturing carries obvious environmental benefits as well. Current operations, for example, save enough raw materials in a year to fill 155,000 railway cars, enough for a 1,100-mile-long train. Remanufacturing also saves 400 BTUs in energy annually; if that were crude oil, it would produce enough gasoline to power six million cars for a year. Waste reduction and sustainable design technologies developed at NC3R have won the center several national and state pollution-prevention awards. The methods, notes Nasr, are both economical and environmentally friendly, “and you can’t do any better than that.”
Of course, “businesses tend to think of the environmental component as a bonus,” Nasr adds. “For them, the main thing is the cost.” But that could be changing, too, as more companies equate green practices with good business. Moreover, many businesses face a swelling number of potentially expensive environmental regulations. The European Union, for example, says that no more than 15 percent of a car can be sent to the scrap yard; eight years from now, that amount will drop to 5 percent.
Spreading the Gospel
Wringing gold from the old may sound like alchemy, but remanufacturing actually requires an awful lot of research and development. That work basically concentrates on two fronts: designing goods ahead of initial production with remanufacturing in mind, so they’ll be easier to disassemble; and developing more effective restoration techniques. Explains Caterpillar’s Leanos: “Much of our reman-specific R&D efforts are focused on either improving existing salvage technology or developing new technology that will allow us to remanufacture more of the product. In essence, our goal is to remanufacture a (product) in its entirety without having to use new parts.”
As the academic leader in applied reman research, the NC3R is filling a necessary gap. “The ability to bring parts to new condition can be hampered by a lack of technology,” Nasr says. Some of NC3R’s research has, for instance, analyzed how materials age and how to slow the process, as well as new and environmentally safer ways to clean grime from components. One project determined a cost-effective welding technique to salvage cracked cast-iron engine blocks.
Although Rochester’s NC3R dominates this field, its founding director wants to see more schools get involved. Nasr is a tireless proselytizer for reman research. If more engineering schools devoted research to remanufacturing, he says, it wouldn’t increase competition, but rather it would be a collaborative way to grow the field. Nasr fears that engineers are still too fixated on the brand-new when they need to be more open-minded. “There is a lack of understanding and appreciation for the work,” he admits. “I am always talking to colleagues, other academics, telling them it is a great opportunity to do excellent research. We encourage a lot of schools to get into it. A few years ago, I had no takers, but that is changing.” So far, he adds, most of the increased interest has come from business schools, not colleges of engineering.
Still, Nasr clearly has been able to attract many top-notch researchers. Once they understand what the center does, how it works with major companies and how it focuses on designing products with several lifecycles in mind, he says, engineers get hooked. “It’s a challenge, and engineers typically like to be challenged,” Nasr notes. Moreover, the field is wide open. “I can’t think of any discipline that wouldn’t have a role in reman.”
Caterpillar’s Leanos concurs, pointing out that the company’s reman operation has hired engineers with mechanical, ceramic, metallurgical, chemical and manufacturing engineering degrees.
So will there one day be a separate remanufacturing engineering discipline? That seems doubtful, if only because the field needs such a wide range of engineers working in an interdisciplinary fashion. “Our engineers learn practical applications outside their specific area of study,” Leanos says. “They have the opportunity to interact with engineers across the enterprise.” Still, Rochester will soon begin offering a Ph.D.—and eventually a master’s—in sustainability for students who want to focus on environmentally friendly production. And for a growing list of manufacturers, sustainable production in the future will include finding ways of using their “waste lines” to improve their bottom lines.
Thomas K. Grose is a freelance writer based in Great Britain.