WHY SMALL BUSINESSES CAN EMBRACE REMANUFACTURING
Remanufacturing is a process where a particular product is taken apart, cleaned, repaired, and then reassembled to be used again. Many different types of products can go through this process, including auto parts, tyres, furniture, laser toner cartridges, computers, and electrical equipment. Essentially, any product that can be manufactured can also be remanufactured. In order for a product to be considered remanufactured, most of its components should be used (although some of them can be new if the older parts are too defective to be salvaged).
As society continues to better understand the effects of pollution and the consequences that come with the depletion of our natural resources, different steps are taken to ensure the health of the environment for future generations. This general awareness has led to many new developments to preserve our world. Remanufacturing is one of such development. This process is responsible for large energy savings, extending the lives of landfills, and cutting down on the amount of air pollution that would normally occur when a product goes through a reprocessing procedure.
While the basic concept is quite simple, remanufacturing is actually an expensive process. It requires that a used product be completely disassembled in order to assess its actual condition. If it is determined that remanufacturing is worthwhile, various parts of the product are cleaned, restored, repaired, and replaced. Further refinements are then performed and the product is reassembled so that it once again operates in the manner for which it was intended.
The product is then ready to be used again. Each step in this process is essential to the entire concept of remanufacturing and careful precautions must be taken to ensure that each step is carried out correctly.
Misconceptions about Remanufacturing
Often, the process of remanufacturing gets confused with other similar activities. Rebuilt and recharged products are very close to remanufactured ones and the three terms can be considered synonymous with each other. Rebuilt products usually refer to auto parts, while recharging is usually performed on imaging products like the aforementioned toner cartridges.
Other types of products are almost completely different from those that have been remanufactured. For example, a remanufactured product is not a recycled one. Recycling involves using a product or its parts as raw materials for a different product and is generally applied to consumable goods like newspapers, bottles, and cans. Very rarely are recycled products resold to be used as they were originally intended, and when they are, the quality is not as good as a remanufactured product.
In addition, a remanufacture product should not be confused with a repaired one. Usually when a product is repaired, the whole remanufacturing process is disregarded and only defective parts are investigated and replaced. Likewise, restored and reconditioned products are ones that are brought back to their original condition, but these changes are usually cosmetic and apply to things like antiques, rather than mass market consumer products.
In addition, remanufactured products should not be classified as “used.” A used product is one that has not been repaired and therefore has no guarantees regarding its performance. Finally, de-manufacturing and remanufacturing should not be confused with each other. De-manufacturing is simply the disassembly step that all products that are going to be remanufactured must go through.
Remanufacturing vs. Recycling
Although remanufacturing and recycling are two different things, many environmental groups are embracing the concept of remanufacturing over recycling because it cuts down on the use of energy and resources used for processing. While recycled goods are consumed, then returned to their original raw material form to be used again, remanufacturing “recycles” the value originally added to the raw material.
Remanufacturing differs from recycling also, most importantly because it makes a much greater economic contribution per unit of product than does recycling. The essential difference arises in the recapture of the value added. Value added is the cost of labor, energy and manufacturing operations that are added to the basic cost of raw materials in the manufacture of a product. For all but the simplest durable goods, value added is by far the largest element of cost. Even in a product as simple as a beer bottle, the cost of the basic raw materials (sand, soda, and lime) is much less than 5 percent of the cost of a finished bottle. The rest is value added.
For a product such as an automobile, the value of the raw materials that can be recovered by recycling is only in the order of 1.5 percent of the market value of the new car. Value added is embodied in the product. Recycling destroys that value added, reducing a product to its elemental value, that is, its recoverable raw material constituents.
Further, recycling requires added labor, energy, and processing capital to recover the raw materials. When all of the costs of segregation, collection, processing, and refining are taken into account, recycling has significant societal cost. Society undertakes recycling only because, for all nondurable and many durable products, the societal cost of any other disposal alternative is even greater.
Remanufacturing and Small Businesses
Aside from environmental benefits, there are many other reasons why remanufactured goods exist. Like many good business decisions, remanufacturing simply saves money by prolonging the economic life of a product. A small business with a tight budget can save money by using remanufactured products because they often cost less (anywhere between forty and sixty percent less) and come with warranties and extra services that guarantee their performance.
If a small business decides to get into the remanufacturing industry, it must first and foremost study and understand the market. Despite the recent successes in remanufacturing, there is still a negative perception among consumers regarding products that contain used parts. Many consumers feel that a remanufactured product is not durable as a brand new one and may require additional maintenance in the future. This is a serious issue that must be addressed before a small business decides whether it is worth it to pursue remanufacturing as a vocation.
Like any business venture, remanufactured products must be properly marketed in order for the company producing them to ultimately succeed. Management must target consumers who will appreciate the fact that remanufactured good are a great financial alternative to new ones, but educate them enough so that they understand they are not sacrificing quality for price. A sound warranty plan and follow up calls that gauge the product’s performance are also suggested. Like any product or service, a remanufactured product will benefit from positive word of mouth and grow into a solid business because of it.
Most importantly, a small business must have the means at its disposal to locate and recover the products and resources that will be used in the remanufacturing project and ultimately perform the task at hand. Once these products are found, they must be transported to the destination where disassembly will take place. After that, they will most likely be transported to another location that specializes in reassembly. Finally, any unusable parts and products must be collected and transported to the recycling centers or other places that specialize in their disposal.
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