I am writing this article having recently
returned from the REMATEC exhibition in the beautiful city of Amsterdam.
Having seen a marked decline in other trade shows this year, it was
very refreshing to see how buoyant this event still is, reflecting the
healthy state of remanufacturing in general.
So
why are remanufacturing equipment suppliers and contractors bucking the
global manufacturing downturn? Recent studies suggest that there are
over 70,000 remanufacturing companies in the USA alone, turning over $50
billion per annum. The market is huge, encompassing automotive, aerospace, marine, electronics and many more sectors too numerous to mention.
The
first answer is clearly to do with cost savings. With budgets
everywhere under pressure, the cost of remanufactured goods is 40 – 60%
less than new. And such is the quality on offer that it is often
difficult to tell the difference between new and remanufactured
products. When you throw in the fact that most items are supplied with a
warranty, it makes an attractive proposition.
Secondly,
this trend is being driven by legislation. For instance, EU regulations
dictate that only 15% of a car can end up in a scrapyard. That
percentage will drop to 5% in 2015, a requirement that should boost the
industry’s growth, since remanufacturers need a steady supply of
broken-down goods for the process to work efficiently.
Finally, there are the environmental issues. Materials
represent 70% of costs for a new product, but only 40% for a
remanufactured one. And because there's less casting and smelting, a
particularly power-hungry aspect of production processes, energy costs
are up to 85% lower than in manufacturing new products.
The
growth of remanufacturing is forcing OEMs to rethink their entire
business models. Until recently, many products such as cars,
photocopiers, white goods and other electronic items were designed with
built-in obsolescence. So consumers could be persuaded to buy new models
every 2 or 3 years. The shocking decline in the auto industry means
that manufacturers will not be able to constantly develop new models
because there will not be markets for them. Instead they will have to be
designed with future remanufacturing potential in mind. In the long
term, this will benefit both manufacturers and consumers.
What
does this mean for our industry? I believe that there is already
increased demand for efficient, environmentally-sound surface technology
equipment. The plethora of new cleaning and degreasing equipment
suppliers is evidence of this. This trend also extends to powder
coating, specialist coatings, shot blasting, polishing, heat treatment
and many other surface finishing processes.
Machine
tool suppliers are also acutely aware of this trend. Remanufacturers
require machines for grinding, milling, lapping, honing and many other
metal cutting and forming processes. The fact that the machine tools
themselves are being remanufactured produces a product cycle that feeds
upon itself. We are remanufacturing the machines in order to
remanufacture more machines, and so on!
At
Riley Surface World we are seeing a deluge of enquiries from
remanufacturers of all types and sizes. From one man doing up alloy
wheels in his garage at home to large aerospace companies applying new
specialist coatings to old parts, the scope is enormous. Those of us
that depend on surface finishing for our livelihoods ignore the
potential of remanufacturing at our peril.
