UK risks missing out on remanufacturing revolution

Posted on 3 Mar 2015 by Jonny Williamson

Leading experts from industry and academia have warned that the UK is lagging behind other advanced economies in harnessing the value in the rapidly growing remanufacturing industry.

The warning follows the release of a new joint report from the Carbon Trust; Knowledge Transfer Network; High Speed Sustainable Manufacturing Institute; Centre for Remanufacturing and Reuse, and Coventry University.

Remanufacturing refers to manufacturing where parts or products at the end of their useful life are returned to like-new or better condition, with their quality supported by a warranty. These activities currently contribute around £2.4bn to the British economy. However, with appropriate support this could be increased to £5.6bn and create thousands of new skilled jobs.

A number of countries around the world – including the US, China, Japan and Germany – have established centres of excellence or have strong policies specifically to support the growth of remanufacturing.

However no equivalent framework of support exists across the UK, which is the issue the coalition behind the new report are seeking to address.

Describing high value manufacturing as a “real area of strength for the UK economy,” Aleyn Smith-Gillespie, associate director at the Carbon Trust, commented: “There are a number of opportunities for growth in British remanufacturing, particularly in sectors such as automotive; defence; aerospace; medical equipment, and electronics.

“Supporting remanufacturing and closed-loop resource use should be a no brainer. Incorporating remanufacturing into business models and products not only provides economic and environmental benefits, it can also create new opportunities for business growth and employment. ”

The report contains the conclusions from a cross-industry workshop, hosted in association with the University of Birmingham, the University of Strathclyde, and UCL.

It contains a number of recommendations for how the growth of remanufacturing can be supported, including the creation of new product quality standards, improving industrial design education, and introducing smarter regulation.

One of the businesses that participated in the workshop was Autocraft Drivetrain Solutions, an SME with around 160 employees based in Grantham, Lincolnshire.

The business has started using innovative methods to remanufacture engines and other automotive components for a number of larger manufacturers, including Ford, Jaguar Land Rover, JCB and Aston Martin.

Modern salvage techniques enable up to 85% of an original engine to be recovered and reused, dramatically lowering material costs and the associated environmental impacts.

Mike Hague-Morgan, commercial and engineering director at Autocraft Drivetrain Solutions, explained: “We have been around for over 40 years, manufacturing hundreds of thousands of engines. But since 2010, when as a senior management team we bought the company, we have seen a huge upswing in demand for remanufactured products, which gives us a great opportunity for growth.

“Our customers are large manufacturers that are very concerned about energy and resource costs, as well as the environmental impact of their products. Remanufacturing offers them a way to address all these issues. And we know how to produce high quality remanufactured engines and components, which in many cases can be better than the original.

“Today the UK has a global reputation for producing automotive components, but we risk falling behind other countries unless the right support is provided for remanufacturing. There are still some real barriers that need to be overcome, from securing a steady supply of core products to remanufacture, to getting staff with the right skills. But with the right support and policies we could very quickly scale up the business that we do today.”

Another participating company was MCT Reman, an automotive supplier based in Weston-super-Mare that has been producing remanufactured engines and other powertrain components since the late 1960s.

Director of its Engineering Technology Services Division, Ian Briggs noted: “One of the biggest barriers to overcome is that new products are still not being designed with remanufacturing and sustainability in mind.

“OEMs are driving down the cost of their own manufactured components and putting in place specifications that can affect the profitability of remanufacturers, meaning that it can be cheaper to replace a component rather than apply remanufacturing processes.

“We would like to see the government challenge OEMs to consider in more detail the sustainability of their products at the end of their useful lives, putting in place incentives and obligations that will support the infrastructure needed for a circular supply chain.”