Remanufacturing explained: Definitions, benefits, examples

If you’re an industrial manufacturer, chances are you’re not really sure if should build a business around remanufacturing your own products. After all, your plate’s already full with digital transformation, keeping supply chains flowing, and meeting market and investor expectations.

But if you ignore the remanufacturing trend, you could be missing out on significant revenue, operational improvement, and sustainability opportunities for your business.

That’s why every manufacturer should spend some time understanding this trend and its business and environmental benefits.

What is remanufacturing?

Remanufacturing is the process of restoring used products or components to a “like-new”, “same-as-new”, or “better-than-new” condition through disassembly, cleaning, repair or replacement of parts, and testing.

This comprehensive process involves:

• Collecting salvageable parts: Gathering used products or components suitable for remanufacturing.
• Evaluation: Assessing each part’s condition to determine repairability.
• Cleaning: Thoroughly removing dirt, corrosion, and old finishes.
• Repair or replacement: Fixing damaged parts or substituting them with new ones.
• Reassembly: Putting the product back together following original specifications.
• Quality assurance testing: Rigorously testing to ensure the remanufactured product performs like new.

By the end of the process, the remanufactured product is almost indistinguishable from a brand-new item, offering the same performance and reliability.

But definitions may vary by industry. In healthcare, for example, the US Food and Drug Administration (FDA) is grappling with the question of what constitutes a “serviced” vs. “remanufactured medical device” and has been seeking input on that question.

What does remanufactured mean?

Remanufactured refers to a product or component that has been restored to a like-new condition through a comprehensive and controlled industrial process known as remanufacturing. A remanufactured product is intended to perform as well as, or even better than, a new item. It often comes with a warranty similar to that of a new product, providing consumers and businesses with confidence in its reliability and longevity.

Remanufactured vs. refurbished goods

There’s also some confusion around the difference between remanufactured and refurbished goods. With refurbished items, you replace components that have failed or are close to failing. With remanufactured goods, on the other hand, most or all components get replaced, surfaces are cleaned up, and the result should be almost indistinguishable from new, out-of-box items.

With the growing industrial focus on sustainability and operational efficiency, re-manufacturing is gaining traction. Consider these numbers:

• The US market for remanufactured goods is expected to grow at a healthy 6% compound rate each year through 2025.
• About 90% of that remanufacturing activity is in the business-to-business (B2B) space.
• The automotive industry is estimated to be the biggest remanufacturing sector, with two-thirds of all remanufacturing activities worldwide.

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How is remanufacturing different from recycling?

While both remanufacturing and recycling are essential processes that contribute to sustainability and waste reduction, they operate in fundamentally different ways and serve distinct purposes within the circular economy.

Recycling definition

Recycling is the process of collecting and processing used or waste materials to convert them into new raw materials or products. It involves breaking down items into their basic elements — like melting down plastics or metals — so they can be reconstituted into entirely new products. Commonly recycled materials include paper, glass, plastic, and metals.

Key differences between remanufacturing and recycling

1) Purpose

Recycling focuses on recovering the raw materials from used products. The goal is to reclaim base materials to produce new items, which often differ from the original products.

Remanufacturing, in contrast, aims to restore entire products or components to their original or improved condition. It preserves the integrity of the original item by refurbishing and upgrading it, rather than breaking it down completely.

2) Energy consumption

Recycling can be energy-intensive because it often requires high temperatures or chemical processes to break down materials. For example, melting metals or processing plastics consumes significant amounts of energy.

Remanufacturing is generally more energy-efficient. By reusing most of the original components and only repairing or replacing what’s necessary, it conserves the energy that would have been used to manufacture new parts from scratch.

3) Quality of output

Recycled materials may experience degradation during the recycling process. For instance, the quality of recycled paper diminishes with each cycle due to fiber shortening, and recycled plastics might be less durable.

Remanufactured products are restored to meet or even exceed the original manufacturer’s specifications. They undergo rigorous testing to ensure they perform like new, offering reliability and longevity comparable to brand-new items.

4) Environmental impact

Remanufacturing extends the life cycle of products, reducing waste and the demand for new raw materials. By keeping products in use longer, it minimizes landfill use and lessens the environmental footprint associated with manufacturing new goods.

Recycling reduces the need for raw material extraction by reusing existing materials. This conserves natural resources and decreases the environmental damage caused by mining, logging, or drilling. Recycling also cuts down on energy consumption and greenhouse gas emissions associated with producing new materials.

Understanding these differences helps businesses and consumers make informed decisions about product lifecycle management and sustainability practices. Both processes are integral to building a more sustainable future but choosing between them depends on the specific goals—whether that’s conserving materials, reducing energy consumption, or maintaining product quality.

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What’s the difference between rebuilt, reconditioned, and remanufactured?

When it comes to breathing new life into used products, terms like rebuilt, reconditioned, and remanufactured often surface. While they might seem interchangeable, each represents a different level of restoration and quality. Understanding these differences is crucial for making informed purchasing and business decisions.

Definition: Rebuilt

Rebuilt products are repaired to function but may not meet the original manufacturer’s specifications. The primary goal is to get the product working again, focusing solely on functionality rather than restoring it to its original state.

Process:

• Selective repair – only the broken or worn-out parts are replaced or fixed.
• Basic testing – minimal testing is conducted to ensure the product operates.
• Original components – many of the original components remain if they are still functional.

Quality level: Functional but may have reduced performance, efficiency, or lifespan compared to new or remanufactured products.

Warranty: Limited or no warranty, reflecting the lower confidence in long-term reliability.

Cost implications: Typically the least expensive option due to minimal repairs and lower labor costs.

Definition: Reconditioned

Reconditioned products are used items restored to working order but not necessarily brought back to original factory specifications. The focus is on improving both function and appearance.

Process:

• Cleaning – thorough cleaning to enhance cosmetic appearance.
• Minor repairs – replacement or repair of parts that are visibly worn or damaged.
• Partial testing – basic operational tests are performed to ensure functionality.

Quality level: Better than rebuilt, offering improved performance and aesthetics, but may still fall short of original specifications.

Warranty: Usually comes with a short-term warranty, providing some assurance of quality.

Cost implications: Moderately priced, offering a balance between cost savings and product reliability.

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Definition: Remanufactured

Remanufactured products undergo a comprehensive restoration process to return them to a like-new, or even better-than-new, condition. They are rebuilt to the original manufacturer’s specifications using a controlled, reproducible, and sustainable process.

Process:

• Complete disassembly –  the product is entirely taken apart to inspect every component.
• Inspection and replacement – all parts are examined, and worn or outdated components are replaced with new or upgraded ones.
• Cleaning and refinishing – all parts are cleaned, machined, or refinished to meet original standards.
• Reassembly – the product is reassembled following the original manufacturing guidelines.
• Rigorous testing – extensive testing is conducted to ensure the product meets or exceeds original performance specifications.

Quality level: Equivalent to, or sometimes better than, a new product in terms of performance, reliability, and lifespan.

Warranty: Often accompanied by a warranty similar to that of a new product, reflecting high confidence in quality and durability.

Cost implications: While more expensive than rebuilt or reconditioned options, remanufactured products offer significant savings compared to brand-new items, typically at a 20% to 40% discount.

Implications for buyers

Understanding these distinctions is essential for making choices that align with your needs and expectations:

• Performance and reliability needs: If you require a product that performs like new and offers long-term reliability, a remanufactured product is the best choice. It’s ideal for critical applications where performance cannot be compromised.
• Budget constraints: If budget is a primary concern and some compromise on performance and longevity is acceptable, rebuilt or reconditioned products might be suitable options.
• Warranty considerations: Remanufactured products often come with warranties similar to new products, providing peace of mind. Reconditioned products offer limited warranties, while rebuilt products may offer little to no warranty.
• Environmental impact: All three options contribute to sustainability by extending product life and reducing waste. However, remanufacturing offers the most significant environmental benefits due to its thorough restoration process and emphasis on quality and longevity.

Choosing between rebuilt, reconditioned, and remanufactured products depends on your specific requirements for quality, reliability, and budget. Remanufactured products offer the highest level of assurance, closely matching new products in performance and often backed by comprehensive warranties. Reconditioned products provide a middle ground with improved functionality and appearance at a moderate price. Rebuilt products are the most budget-friendly but come with trade-offs in performance and durability.

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What can be remanufactured?

Not all products are suitable candidates for remanufacturing. Identifying items that can be effectively remanufactured involves understanding certain characteristics and criteria that make the process economically viable and technically feasible.

General criteria for remanufacturing of products

1. Economic viability: Products with a high initial cost are often more economical to remanufacture. The value recovered through remanufacturing justifies the investment in the process.
2. Material longevity: Items made from durable materials that can withstand multiple life cycles are ideal. Components should retain structural integrity after use.
3. Ease of disassembly and reassembly: Products designed with standard parts and modular components simplify the remanufacturing process.
4. Limited outmodedness: Products that are not rapidly outdated by new technology ensure that remanufactured items remain relevant and valuable to consumers.
5. Compliance and sustainability goals: Products subject to environmental regulations or sustainability initiatives may be prioritized for remanufacturing to reduce waste and resource consumption.
6. Intentional engineering: Products specifically designed for remanufacturing, with features that facilitate easy disassembly, cleaning, and reassembly, enhance the efficiency and effectiveness of the process.

Assessing Remanufacturability

When evaluating whether a product can be remanufactured, companies should consider:

• Physical condition: The extent of wear and damage affects the feasibility of restoration.
• Market demand: There must be a demand for remanufactured versions of the product.
• Technical feasibility: Availability of the necessary technology and expertise to remanufacture the product to original specifications.
• Cost-benefit analysis: Remanufacturing should be cost-effective compared to producing new items or other forms of product recovery.

Strategic considerations

Identifying remanufacturable products aligns with broader business strategies:

• Sustainability initiatives: Remanufacturing supports environmental goals by reducing waste and conserving resources.
• Customer value proposition: Offering remanufactured products can meet customer demands for affordable, high-quality, and sustainable options.
• Competitive advantage: Companies that effectively incorporate remanufacturing can differentiate themselves in the marketplace.

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What’s old is new again: Examples of remanufacturing

Just about any physical items can be remanufactured, but some common examples include:

1. Aircraft components – Higher costs and a shortage of new parts has driven demand for re-manufactured aircraft components, which reportedly cost 20% to 40% less than new parts. Indeed the global automotive remanufacturing market is expected to be worth $60.78 billion by 2030, growing at a CAGR of 9.9%, according to Fortune Business Insights.
2. Car parts/engines – This market has really accelerated with more than 15,000 U.S. companies remaking and reselling parts compared to only 3,800 making new ones. The global market for automotive parts remanufacturing, meanwhile, is projected to increase at a CAGR of 8.7% and reach $96.4 billion by 2027.
3. Medical devices – Companies such as General Electric (GE), Stryker, Vanguard AG, and Meditek ReNew are actively remanufacturing and distributing medical devices around the world. Common devices that are refreshed in this way include magnetic resonance imaging (MRI), computed tomography (CT), X-ray, interventional cardiology, and assorted ultrasound devices.
4. Office furniture – A whole cottage industry has arisen around furniture that’s not only remade, but customized to meet business customer specifications. Dealers promote the environmental benefits of such purchases and emphasize how remanufacturing can produce better-than-new furniture for 45% to 75% less money.
5. Electronics – Computing, routing, printing, and other technology leaders not only remake their own products to extend their lives and cut carbon footprints, but create entire business lines for doing it, boosting their bottom lines.

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Benefits of remanufactured goods

Why go to the trouble of remaking a product? Wouldn’t it be easier to stick with standard manufacturing processes and focus on producing new goods?

Ultimately, the benefits of remanufactured products — for industry, consumers, and our planet — are too compelling to ignore:

1. Contribute to a circular economy – The idea of a circular economy is that you protect the planet by manufacturing products that can be returned to production when their original life comes to an end so they don’t end up in overflowing landfills. In fact, remanufacturing has been called “the backbone of the circular economy.”
2. Demonstrate sustainability – Aligning with the circular economy concept helps manufacturers reduce their consumption of natural resources to cut their greenhouse gas emissions and meet a growing number of regulatory requirements. Remade products also can show customers that a business is committed to the environment by reducing its impact on the planet.
3. New profit opportunities – Many large companies, including GE Healthcare, Caterpillar, Applied Materials, and Cisco Systems have reportedly boosted revenues by adding businesses dedicated to remanufacturing their products.
4. Create jobs – The remanufacturing industry employs more than 180,000 people in the United States and more than 450,000 worldwide, according to the Remanufacturing Industries Council.
5. Reduce costs – Manufacturers often see significant savings because they don’t have to spend as much on raw materials, energy, or water. For example, by some estimates, businesses use 85% less energy to remake parts than they would to produce new ones. And within offices, remanufactured equipment saves money. If a computer, printer, or some other piece of office equipment has been remanufactured, it’s warrantied to operate as if it were new – but at a 20% to 40% discount.
6. Faster turnaround – Remanufactured products typically take less time than producing newer ones since you’re not starting completely from scratch. These items also frequently produced closer to points of purchase, which reduces shipping times. This means businesses and consumers don’t have to wait as long to receive orders that are in short supply.

Navigating challenges in remanufacturing: Perceptions, processes, and parts

The benefits of remanufacturing outnumber the disadvantages, but there are some gotchas worth knowing about, including:

• Perception – Rightly or wrongly, many business and consumer buyers still view remanufactured items as second class and worry they won’t work as well or last as long as new products.
• Work in progress – Taking back products for remanufacturing requires new processes and logistics management. Success depends on obtaining accurate data and forging industry collaboration. It’s no small feat.
• Parts availability – We all felt the impact of supply chain challenges during the pandemic, and they continue to plague materials and parts production in numerous industries. Combined with an unreliable supply of used products or parts, this could cause delays in in production.

Getting started and looking ahead

Remanufacturing starts with careful analysis of which products make the most sense for reuse, from an environmental and economic standpoint. Not all products are viable candidates.

Before developing processes for remaking products, manufacturers needs to consider all parties that will be impacted by the process, including suppliers, retailers, and logistics. Other key considerations: Having workers with the right skills, and incentivizing customers to return used products.

There’s little doubt remanufacturing is here to stay. Its business and consumer benefits clearly outweigh the challenges, and its environmental benefits are undeniable. Companies that start now will drive growth and stand out from the competition.