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Remanufacturing in India: Approaches, Potentials & Technical challenges

Authors:
  • International Institute of Hotel Management Bangalore

Abstract

Remanufacturing is an attractive business process of returning end-of-life products to original "as-good-as-new" condition in a manufacturing environment. Remanufacturing has been accepted by western world but India is yet to take it up as an organized industrial sector. Remanufacturing industry in India has huge potential for employment and wealth generation. But it needs a new approach to the sector. In this paper, we will discuss about industry approaches towards remanufacturing, its potential to grow in India and technical challenges faced by the industry, environment and society.
International Journal of Industrial Engineering and Technology.
ISSN 0974-3146 Volume 3, Number 3 (2011), pp. 223-227
© International Research Publication House
http://www.irphouse.com
Remanufacturing in India: Approaches, Potentials &
Technical challenges
Nita Choudhary1 and Niranjan Kumar Singh2
1Lecturer, Department of Management Studies,
C.N.K. Reddy College of Business Management,
No. 193, Double Road, Indiranagar 2nd Stage, Bangalore–560038, India
E-mail: nitu_bit2005@yahoo.com
2Engineer (QE), BEML Ltd., New Thipassandra Post,
Bangalore–560075, India
E-mail: niju98@gmail.com
Abstract
Remanufacturing is an attractive business process of returning end-of-life
products to original “as-good-as-new” condition in a manufacturing
environment. Remanufacturing has been accepted by western world but India
is yet to take it up as an organized industrial sector. Remanufacturing industry
in India has huge potential for employment and wealth generation. But it
needs a new approach to the sector. In this paper, we will discuss about
industry approaches towards remanufacturing, its potential to grow in India
and technical challenges faced by the industry, environment and society.
Keywords: Remanufacturing, as – good - as new.
Introduction
Remanufacturing is a form of product recovery process, where used and discarded
products/components/parts of equipment are subjected to a sequence of activities, so
as to convert them into the same as new condition. In remanufacturing, returns are
completely disassembled to parts/ components, thoroughly inspected, defective and
worn-out parts are repaired or replaced by new ones and then finally reassembled to
build up the remanufactured product. As far as quality is concerned, a remanufactured
item is ‘as-good-as-new’. Technological upgradations of some parts or modules are
also possible during the remanufacturing process (Dekker et al., 2000; Guide et al.,
2003). During Second World War many manufacturing facilities changed from
ordinary production to military production, thereby the remanufacturing industry got a
224 Nita Choudhary and Niranjan Kumar Singh
boost in order to keep society running. The concept of remanufacturing has spread
during the latest decades to sectors such as those dealing with automotive products
and components, electrical apparatus, toner cartridges, home appliances, machinery,
cellular phones (Sundin, 2004). Remanufacturing is a hot business opportunity
worldwide. The business of e-waste is the most lucrative and effective. As India is the
second most populated country in the world, a need was identified for
remanufacturing a decade ago. The country is still trying to tap into the vast potential
of the industry. Among various information technology products, recycled and
remanufactured imaging products were receiving maximum attention worldwide
when India decided to follow its peers. International players soon carved a niche and
turned it into their success story. Indian players, making a slow start, are yet to come
to terms with it and thus the industry is still in its infancy.
Literature Review
Remanufacturing in India is not in organized now a days. Without the policy, it is
unorganized. In India, EMD Locomotive Technologies Pvt. Ltd. is already practicing
remanufacturing concept on locomotive engines and getting various benefits (Sinha,
2009). GE is using remanufacturing for engines, Solar Turbines, Engineering and
Track Services (Nainar, 2009). Indian Railway is using remanufacturing for Engine
Block, Traction Motor Housing, Loco under frame, Bogie Frame at DMW, Patiala
(Chaudhary, 2009). Timken used remanufacturing for its valuable customer like Essar
Steel, Tinplate Company of India and Usha Martin and value created of $ 14,075, $
46,000 and $ 75,000 respectively as a direct saving (Gupta, 2009). Still less numbers
of corporate houses involved in remanufacturing as organized business sector like
Xerox ModiCorp Ltd., United Van der Horst Ltd., Timkin India Ltd., and few
cartridge refilling companies (Mukherjee, 2009). Cartridge World is one of the
world's largest retail chain selling remanufactured products through 1,500 franchise
outlets. The retailer has aggressive plans for India and targets to open 250 stores by
2010, of which seven are already operational.(Geetha, 2010). In India,
remanufacturing of cartridges are widely used. The size of the remanufacturing sector
in the United States is $53 billion, with over 70,000 _rms and 480,000 employees.
The average profit margin is estimated to exceed 20%. Throughout the world, the
total size of remanufacturing has reached more than $100 billion (Lund and Hausar,
2003).
Remanufacturing for Automotive/Earthmoving Sector
The automobile industry has the longest tradition in remanufacturing and is the most
important industry in the manufacturing market. The automotive product
remanufacturing accounts for two thirds of all remanufacturing and is a 53 billion
dollar industry in the USA alone and an at least 100 billion dollar industry throughout
the world. 10% of all cars and trucks require an engine replacement during their life.
OEMs and independent remanufacturers alike rework worn out or defective engines
back to their original equipment performance specifications, possibly even
Remanufacturing in India 225
incorporating state-of-the-art technology into these cores. About €120 million worth
of remanufactured products were sold in 2005 world wide. And 60 million pieces of
remanufactured products were produced (Steinhilper, 1998). Caterpillar is the market
leader for remanufacturing of earthmoving equipments.
Remanufacturing of Cartridge
Cartridge remanufacturing is a big business worldwide estimated around $35 billion,
contributing nearly 30 percent to the $115 billion worth printer cartridges sold
globally (Geetha, 2010). HP is the market leader in the area of cartridge
remanufacturing.
Remanufacturing of Electronic/Electronics Items, Home Appliances
Whirlpool is using remanufacturing technology. Many shops/showrooms are being
established in India for used electronic/electric equipments like Television, Mobile
phones.
Environmental Issue with remanufacturing in India
In the era of global climate change, when all countries have a moral duty to contribute
towards green environment, remanufactured products can reduce carbon emission and
provide better environmental safety to the nation and consumers.
Conventional manufacturing is unsustainable because of its significant adverse
environmental impacts. Manufacturing generates more than 60% of annual non-
hazardous waste and causes problems including pollution and shortages and therefore
high cost of landfill space and virgin materials (Winifred and Ijomah,2009).
Remanufacturing facilitates less consumption of energy and materials during
production, and reduce waste, thereby contributing to sound solid waste management
and environmental stewardship. Remanufacturing reduces Green House Gases, Raw
Material Use, Landfill Waste, Energy Use, Water Use.
The existing environmental legislations like Environment (Protection Rules), 1986
– Rule 3A, Schedule VI, Annexure I, The Recycled Plastics Manufacture and Usage
Rules, 1999, The Batteries (Management and Handling) Rules, 2001- Rule 4 are Not
very compulsive/stringent (Mukharjee, 2009).
Technical Issue with remanufacturing in India
As the technology and product features are changing rapidly, here is a fast increase in
consumption of remanufactured products like Cars from M/s. Maruti True Values or
used car showrooms, Used motorcycles, Personal Computers, Mobile Phones, Home
appliances. Remanufacturing is labour-intensive, so cost of remanufacturing will be
less in India.
226 Nita Choudhary and Niranjan Kumar Singh
Technical Challenges
1. No specific market for remanufactured products in India
2. Relatively, there are few customers in the market
3. Customers may think remanufactured goods to be inferior. Mindset of people
is not like the western world.
4. Much expertise is not available in this area in India
5. Unforeseen demand fluctuations
6. Uncertainty lies in the timing, quantity and quality of returns
7. Managing the reverse logistics of remanufactured items are difficult. Due to
complex and costly reverse logistics system
8. Low acceptability of remanufactured product due to unawareness of its quality
and price.
Remanufacturing into current WTO negotiations
India needs to be alert on this issue. Remanufacturing can have tremendous impact on
India as it will affect severely its burgeoning industry and large-based consumers.
Before India makes any binding commitments in the WTO, the following issues need
to be clarified:-
1. A definition of remanufactured goods
2. Prevention of dumping
3. The presence of various non-tariff barriers (NTBs) such as import bans, higher
tariffs and fees, or stringent regulation, certification and inspection
requirements. It should not affect transfer of technology
4. Remanufactured goods should be defined in the Foreign Trade Policy
5. Effect of remanufacturing on domestic manufacturing
6. Environmental concern
Conclusion
Tremendous scope of remanufacturing is available in India as the move is towards
green environment manufacturing and sustainable growth but still much less corporate
houses involved in remanufacturing as organized business sector. So far India does
not have stringent policy for remanufacturing. Companies like BEML, L & T, Tata
Motors, Ashok Leyland, Maruti Suzuki etc. should come forward in this area.
References
[1] Chaudhary, R. 2009 A TOOL FOR RECLAMATION OF DIESEL-
ELECTRIC LOCO COMPONENTS BY WELDING ON INDIAN
RAILWAYS, ASSOCHAMNational Seminar on Remanufacturing, New Delhi
[2] Dekker, R., Van der Laan, E. and Inderfurth, K., 2000, ‘A review on inventory
control for joint manufacturing and remanufacturing’, In Conference in
Remanufacturing in India 227
Management and Control of Production & Logistics, IEEE, July 5-8, France,
(2000).
[3] Geetha, N. 2010, Remanufacturing Growth,
http://www.channelbusiness.in/index.php?option=com_content&task=view&id
=355&Itemid=78
[4] Guide, V.D.R.Jr. and Wassenhove, L.N.V., 2003, ‘Managing product returns
for remanufacturing’, In Guide, V.D.R.Jr. and Wassenhove, L.N.V., Business
Aspects of Closed-loop Supply Chains, Carnegie Mellon University Press,
Pittsburgh, PA .
[5] Gupta, S. 2009 The importance of Remanufactured Components in
Maintenance and Life Cycle Management, ASSOCHAM National Seminar on
Remanufacturing, New Delhi
[6] Lund, R. T. and Hausar, W.M. 2003, The remanufacturing industry: Anatomy
of a giant. Tech. rep., Boston University, Boston, MA
[7] Mukherjee, K. 2009 Redesigning the supply chain process , ASSOCHAM
National Seminar on Remanufacturing, New Delhi
[8] Nainar, A. 2009 The Global Remanufacturing Industry: Benefiting Consumers,
industry and the Environment, ASSOCHAM National Seminar on
Remanufacturing, New Delhi
[9] Nasre, N. and Varel, E. 1996. Lifecycle analysis and costing in an
environmentally conscious manufacturing environment. APICS
remanufacturing symposium proceedings, pp. 44–47, USA.
[10] Sinha, A. 2009, The Importance of Remanufactured Components in
Maintenance & Life Cycle Management, ASSOCHAM National Seminar on
Remanufacturing, 18 Sept., 2009, New Delhi
[11] Steinhilper. R., 1998, Remanufacturing-The Ultimate Form of Recycling,
Fraunhofer IRB Verlag, Stuttgart
[12] Sundin E., 2004, Product and Process Design for Successful Remanufacturing,
in Production Systems, Department of Mechanical Engineering, Linköping
University: Linköping, Sweden.
[13] Winifred L. Ijomah, 2009, Addressing decision making for remanufacturing
operations and design-for-remanufacture: International Journal of Sustainable
Engineering, Vol. 2, No. 2, pp. 91–102
... Due to uncertainties related to returns (e.g., timing, quality, quantity, disassembly and reassembly, homogeneity of product range), the collection function is challenged (Mukherjee and Mondal, 2009 [27]). In the same manner, the distribution function can potentially be affected when end users do not support remanufactured goods due to negative user perception and unawareness of its quality and price, to name a few (Choudhary and Singh, 2011 [28]; Serrano et al., 2013 [24]; Sharma et al., 2016 [29]). ...
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The importance of Remanufactured Components in Maintenance and Life Cycle Management
  • S Gupta
Gupta, S. 2009 The importance of Remanufactured Components in Maintenance and Life Cycle Management, ASSOCHAM National Seminar on Remanufacturing, New Delhi
2009 Redesigning the supply chain process
  • K Mukherjee
Mukherjee, K. 2009 Redesigning the supply chain process, ASSOCHAM National Seminar on Remanufacturing, New Delhi
The Global Remanufacturing Industry: Benefiting Consumers, industry and the Environment
  • A Nainar
Nainar, A. 2009 The Global Remanufacturing Industry: Benefiting Consumers, industry and the Environment, ASSOCHAM National Seminar on Remanufacturing, New Delhi
The Importance of Remanufactured Components in Maintenance & Life Cycle Management Remanufacturing-The Ultimate Form of Recycling
  • A Sinha
Sinha, A. 2009, The Importance of Remanufactured Components in Maintenance & Life Cycle Management, ASSOCHAM National Seminar on Remanufacturing, 18 Sept., 2009, New Delhi [11] Steinhilper. R., 1998, Remanufacturing-The Ultimate Form of Recycling, Fraunhofer IRB Verlag, Stuttgart
Remanufacturing Growth
  • N Geetha
Geetha, N. 2010, Remanufacturing Growth, http://www.channelbusiness.in/index.php?option=com_content&task=view&id =355&Itemid=78
The remanufacturing industry: Anatomy of a giant
  • R T Lund
  • W M Hausar
Lund, R. T. and Hausar, W.M. 2003, The remanufacturing industry: Anatomy of a giant. Tech. rep., Boston University, Boston, MA