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Remanufacturing: the next disruptive force? - 11.07.2018

Leaders in reman engines, Ivor Searle, looks at how the concept of recycling has grown in the UK and how remanufacturing is a better bet both economicially and environmentally. Enginebelt.JPG

Britain is a nation of recyclers. The business of removing, managing and recycling waste has grown exponentially over the past decade. Yet recycling is not the only way to build sustainable supply chains and it may not be the best for the long term either.
Another way to minimise the amount we send to waste is by remanufacturing, the process of re-engineering a product at the end of its life to its original state and, if possible, improving on its performance. This begins a new cycle in the life of the product, which now carries a new warranty from the remanufacturer.
Although the UK’s remanufacturers tend to fly under the radar of mainstream news (though not within the automotive trade – see Ivor Searle’s press coverage) they save Britain an estimated 10 million tonnes of CO2 every year. Remanufacturing companies also employ 50,000 people in a number of different sectors and add an estimated £2.4billion to Britain’s GDP.
Engine reman specialist, Ivor Searle, has been at the forefront of engine remanufacturing for over 70 years and is now a leading producer of reman turbos, reman gearboxes and remanufactured cylinder heads.
Whilst Ivor Searle is at the top of its game in the automotive sector, UK remanufacturing overall, is falling well short of its potential. One of the main reasons for this constraint is regulation.
“Once a company collects an old product from a customer to remanufacture, it immediately comes under waste management guidelines, which make it harder or even impossible for the company to remanufacture it in a cost-effective way,” warns Professor Steve Evans, director of research at the Centre for Industrial Sustainability at the University of Cambridge.
The other big hurdle is the absence of a clear legal definition and official trading standards, which make it almost impossible to create credible brands and win over the consumer. Ultimately, remanufacturing is about selling and buying products for reuse, so the consumer needs to trust the remanufactured product before they consider the lower price tag. Ivor Searle sells only to the trade and it has built up a reputation for remanufactured engines of excellence, over decades, positioning it as a hugely respected brand for remanufactured major units. The business also overs an unbeatable warranty service on all its products.
Were such hurdles to be lifted, however, general cross-industry remanufacturing could dramatically transform supply chains. As products go back to the supplier at the end of their life to be regenerated, they are designed to be as efficient as possible, so the maximum value of the product can be recovered. This makes for a strong incentive to manufacture high quality products, often the reverse of the traditional model, where suppliers strive to make their products as cheaply as possible in order to compete effectively.                        
Automotive remanufacturing, in particular, is a sector that tends to do well in a more challenging economic climate. By providing the aftermarket with a cheaper alternative to purchasing brand new parts, remanufacturing generally gains a boost when consumer spending drops. Economic benefits will always be the primary factor driving the market for remanufactured automotive parts, including recon engines.
The average age of the existing car parc in the UK is increasing, which suggests a buoyant future for remanufactured engines and other parts. Demand for reman diesel engines is expected to increase considerably, despite the emergence of alternate fuelled vehicles, for which a market in remanufactured transmission systems will ultimately develop.
David Eszenyi, Commercial Director at Ivor Searle, has the final word:
“Cost will always be the major factor in our market but having built up years of experience, processes and systems, Ivor Searle can deliver remanufactured engines, cylinder heads, gearboxes and turbochargers for up to 40% less than OE and have products delivered next day, where stock availability allows. That is a commercial proposition of which we are very proud.”