Can Remanufacturing Build the Industrial-Sized Circular Economy?

Conversations on sustainability are typically focused on consumer goods like apparel and bottled water, but the circular economy also needs to take into account the manufacturers of the industrial machinery that produces the goods we use on a daily basis. We’re talking about the factories that produce the equipment and parts for vehicles, data centres, elevators, cars, wind turbines, heating and ventilation equipment, and more. In other words, we’re talking about the factories that produce the infrastructure of contemporary digital society. An industry-wide objective is bridging the gap between sustainable ambitions and commercial realities.

According to respondents from the high tech and industrial manufacturing sectors in a recent Oxford Economics survey, the benefits of their circular economy activities included improved brand recognition (80%), higher innovation (79%), and improved regulatory compliance (78%).

The Circular Economy Meets the Demands of Sustainable Business

The need for circular manufacturing has increased. Costs are rising as a result of material shortages. Supply chains that are susceptible to disruption make things more difficult since one setback in one part of the world might have a hugely detrimental effect on output in other parts of the world. Manufacturers must simultaneously determine if energy usage for one-time-use products is profitable in light of the growing regulations. Remanufacturing can assist businesses in lowering the Scope 1, 2, and notably 3 emissions of the Greenhouse Gas Protocol, which account for a large portion of the carbon debt in their products. Even more environmentally favourable is localised remanufacturing.

Supply Chains for Remanufactured Goods Converge Around Sustainability

The circular economy includes determining which machines and components make sense to reuse based on actual product value and carbon emissions saved for heavy equipment manufacturers, who often have enormous portfolios. The cost of materials, components, and manufacture is factored in, as well as depreciation and lifetime energy consumption. When manufacturers acquire back certain items from their distributors, they can disassemble the machines, clean up the high-value components, and improve the component’s functionality so it can be used in future versions.

Sustainable business practises deep in the industrial manufacturing supply chain aren’t a given, despite government requirements and consumer influence. Customers still need incentives to return the items; perhaps the payout for returns outweighs the expenses of dumping. This is true even after a manufacturer has determined which pieces make the most sense for reuse. It will take ground-breaking industry cooperation to manage the logistics of product identification, inspection, and return.

News Source : SAP News

1 thought on “Can Remanufacturing Create a Circular Economy of Industrial Size?”

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