Manufacturing made smarter: digital supply chain, feasibility studies (REMP)

Remanufacturing returns end-of-life (EOL) products to a like-new functional state with matching warranty, thus, extending product service life (200% to 300%), capturing residual value from EOL components and providing superior economic and environmental benefits compared to traditional Original Equipment Manufacturer (OEM) new production. Remanufacturing can reduce greenhouse gas (GHG) emissions by more than 80 per cent in appropriate sectors, reduce new material requirements(costs) by a similar amount and create employment through increasing skilled labour hours by up to 120 per cent [IRP 2018] while still reducing overall cost.

However, despite these triple-win benefits the UK remanufacturing industry is still at its infancy, e.g. the ratio of remanufacturing to manufacturing is strikingly low, only at around 2 per cent (ERN 2015). In addition, almost 98 per cent of remanufacturers are small and medium-sized enterprises (SMEs) [SIR 2020] and struggle with inadequate resources to establish their brand, limited access to cores (used products as starting material for remanufacturing) and scarce sales channels to reach their customer base. Crucially the sector has an image problem and customers do not trust the quality of remanufactured products. Furthermore, as a result of significant inefficiencies and inhibitive costs arising from small scale remanufacturing volumes, remanufacture is often abandoned in favour of other lower value end-of-life processes such as recycling of the materials.

SMEs have benefited greatly from the Electronic Marketplace Places (EMPs) such as eBay and Amazon which introduce the network effect of bringing together market participants so that increasing numbers of customers to attract a greater number of merchants and partners, and vice versa. However, such EMPs are not suitable for remanufactured products as they do not address the fundamental issue facing remanufacturing, namely a lack of quality control for remanufactured products and intermittent access to cores.

With an initial focus on automotive components, REMP will develop a new concept of an EMP tailored for remanufactured products specifically one that is embedded with quality assurance mechanisms, blockchain and data analytics capability to enable remanufacturers to benefit from plug-in, modular, scalable services without the constraints of funding the full costs of a platform business up front, and access to cores, new markets and distribution channels via the platform.

REMP will bring many benefits to the nascent remanufacturing industry: It creates and captures value along the supply chain and passes the benefits on to customers. A successful REMP will catalyse growth in sustainable use of materials through remanufacturing.