Remanufacturing in the UK: a significant contributor to sustainable development?
Summary
‘Remanufacturing is the practice of taking end-of-life goods and re-engineering them back to as-new condition, with warranty to match. Figure 1 (in the full report) places remanufacturing within the hierarchy of recovery techniques. In the USA, the practice has been well documented and quantified, and now attracts government subsidies to promote its benefits as a contributor to sustainable development. No such analysis has been conducted in the UK; this study is the first to attempt such a task, but also to question the business enablers for remanufacturing with a view to proposing actions that could boost activity.
Lund (1996) estimates the GNP of remanufacturers in the USA to be over $50 billion. They are also responsible for the direct employment of around 500,000 people, and many others in connected industries.
Our study concludes that remanufacturing in the UK, driven by economics rather than environmental motives, is making a significant contribution to materials efficiency embodying substantial equivalent carbon savings. This unrecognised sector is contributing around £5 billion to GNP, recovering around 270,000 te of materials with an equivalent carbon saving of 800,000 te CO2e, and employing around 50,000 people (see Table 2 in the full report).
Enlightened remanufacturers are often at the forefront of marketing novel product-service offerings, usually entailing greater profit margins than “make and sell” businesses. Those sectors that compete on lowest price – whether manufacturers or remanufacturers – are suffering against lower price competition, commonly from abroad. Leading edge remanufacturers also embrace state of-the-art manufacturing processes – lean techniques, investment in people, material traceability – because they are key to business success.
Remanufacturing has the potential for even greater contribution to sustainable consumption, and there are steps that all stakeholders can take to enable this. Foremost amongst these are elimination of legal impediments such as:
denial of access to manufacturer design information
banning of remanufactured components in new goods
redefinition of what constitutes waste
Removal of these would increase competition and force evolution of improved services, including remanufacturing. We do not recommend unilateral fiscal measures to skew markets towards remanufacturing, even if this achieves the sustainability objective. These moves would create artificial markets, and ultimately stifle healthy competition. We believe that there is a place at a multilateral level for such policies as freedom of information, lifetime warranty to spur design fitness, and a liberalisation of the distinction between waste and resources to encourage trade in exploitable materials.
Further success of remanufacturing will also entail concerted efforts by companies and industries to drive out poor operators, and establish reputation for quality through branding. There will be opportunities for brokers and other agents to source and sort cores for a range of sectors. There could be significant opportunities for companies capable of facilitating vertical integration, reverse logistics and core broking. For example there is a role for waste management companies to provide a more comprehensive “waste resource” service to return end-of-life products back into the manufacturing chain.’