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 1
Lecturer, Department of Management Studies, C.N.K. Reddy College of Business Management, No. 193, Double Road, Indiranagar 2nd Stage, Bangalore–560038, India E-mail:
[email protected] 2 Engineer (QE), BEML Ltd., New Thipassandra Post, Bangalore–560075, India E-mail:
[email protected]
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
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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
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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 nonhazardous 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.
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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 DIESELELECTRIC 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
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Management and Control of Production & Logistics, IEEE, July 5-8, France, (2000). Geetha, N. 2010, Remanufacturing Growth, http://www.channelbusiness.in/index.php?option=com_content&task=view&id =355&Itemid=78 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 . Gupta, S. 2009 The importance of Remanufactured Components in Maintenance and Life Cycle Management, ASSOCHAM National Seminar on Remanufacturing, New Delhi Lund, R. T. and Hausar, W.M. 2003, The remanufacturing industry: Anatomy of a giant. Tech. rep., Boston University, Boston, MA Mukherjee, K. 2009 Redesigning the supply chain process , ASSOCHAM National Seminar on Remanufacturing, New Delhi Nainar, A. 2009 The Global Remanufacturing Industry: Benefiting Consumers, industry and the Environment, ASSOCHAM National Seminar on Remanufacturing, New Delhi Nasre, N. and Varel, E. 1996. Lifecycle analysis and costing in an environmentally conscious manufacturing environment. APICS remanufacturing symposium proceedings, pp. 44–47, USA. Sinha, A. 2009, The Importance of Remanufactured Components in Maintenance & Life Cycle Management, ASSOCHAM National Seminar on Remanufacturing, 18 Sept., 2009, New Delhi Steinhilper. R., 1998, Remanufacturing-The Ultimate Form of Recycling, Fraunhofer IRB Verlag, Stuttgart Sundin E., 2004, Product and Process Design for Successful Remanufacturing, in Production Systems, Department of Mechanical Engineering, Linköping University: Linköping, Sweden. 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
