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Journey from American Standard to International Standard
ADVOCATE COLLABORATE EDUCATE
Don Chenevert, Jr.Deputy General Counsel
SRC Holdings Corporation417-575-8336
Dr. Ramesh SubramoniamChair, Trade & Policy Committee
Remanufacturing Industries Council248-515-0861
Reman Day promotes the common understanding of the industry, demonstrates the innovative ways
members of the industry are advancing the circular economy and the positive environmental impact of
remanufacturing.
https://remanday.org
The Remanufacturing Industries Council (“RIC”) is a strategic alliance of businesses and academic institutions that works across industry sectors to support the entire remanufacturing industry.
• Promotes the growth of all sectors of the remanufacturing industry
• Provides a forum for members to identify and address issues of common interest, benchmark and share best practices
• Builds a strong network to stay informed of developments in remanufacturing technology
• Provides education and training to the industry
• Works to increase awareness of the benefits of remanufacturing in governments and the general public
• Advocates with policy-makers and government regulators to promote remanufacturing
RIC published intent to create new American Standard through ANSI Standards Action.
RIC-Consensus Body formed; initial draft developed.
Revised draft Standard circulated.
Consensus Body approved draft Standard
Revised draft Standard submitted to ANSI for approval and publication in Standard Action.
Proposed final draft Standard submitted to ANSI for approval.
RIC AMERICAN STANDARD APPROVED.
RIC, an American Standards Developer recognized by the American National Standards Institute (“ANSI”), initiated the multi-year process to develop an American Standard for remanufacturing in 2014.
• In 2014, the Remanufacturing Industries Council (“RIC”) initiated the multi-year process to develop an American National Standard.
• On February 2, 2017, ANSI approved RIC’s proposed Standard for remanufacturing.
• The Standard serves as a baseline for additional standards for specific remanufacturing products and product groups.
• As the developer of the Standard, RIC is responsible for maintaining and interpreting the Standard, monitoring and reviewing developments related to the Standard and, as necessary, considering possible revisions or modifications of the Standard
• Defines process of remanufacturing
• Provides a benchmark for the process of remanufacturing
• Establishes specifications that characterize the remanufacturing process
• Differentiates remanufacturing from other practices
Parts are inspected/tested
Parts are repaired or replaced as needed
Product is reassembled
Product reenters supply chain
Unusable Core is
recycled.
Process of Remanufacturing
Not remanufacturable
Remanufacturable
No
Core is evaluated for remanufacturability
Core is inspected
Product is inspected and performance verified
Product is coated/ finished
Core is disassembled
Core is cleanedCore is inspected
and verified
Parts replaced as needed
Core is collected/acquired and returned for remanufacturing
Product is manufactured
Product reaches end of use cycle
Core requires disassembly?
• Remanufacturing - a comprehensive and rigorous industrial process by which a previously sold, leased, used, worn or non-functional product or part is returned to a “like-new” or “better-than-new” condition, from both a quality and performance perspective, through a controlled, reproducible and sustainable process
• Core – A worn, failed, or end-of-use part, assembly, or product of a branded or Original Equipment Manufacturer product that is retained with the objective of restoring or improving its original functionality through remanufacturing, or for use as a source of parts for a remanufactured product. A core may have already been placed on the market and used, been damaged after production but before sale, or been subject to an extended shelf life. During reverse logistics, a core is protected, handled and identified for remanufacturing to avoid damage and to preserve its value. A core is not waste or scrap and is not intended to be reused before being remanufactured.
• Part – The smallest, indivisible unit of a remanufactured product; individual parts may be combined or connected together to create a subassembly, assembly, system, or remanufactured product.
• Technical specifications – A collection of product documents that provide a detailed description of technical requirements, with specific acceptance criteria, and form the basis for the design, development and production processes of a product and ensure that a remanufactured product delivers a performance and service life functionally equivalent to that of a new product.
• If a remanufacturer conforms to the Standard, the remanufacturer may mark or label the remanufactured product to certify that the product conforms to the Standard.
• A remanufacturer may engage a third party to certify conformance or self-certify.
International ISO Standard
• Global Reman Industry Size, Industry Sector
• Current Challenges
• Why International Standard?
• Lessons Learned from ANSI implementation
• Current activities
• Timeline
• Next Steps
Source: United States International Trade Commission, 2012European Remanufacturing Market Study, 2015
2017 Estimation by Xiong
Global Remanufacturing: $140B
US Remanufacturing: $100B
Employment: 500,000
Xiong, W. Global Remanufacturing Overview, Experience and Lessons, China Industry Review, 2, 2017
Remanufacturing Status
13.04
6.217.77
5.791.46
1.39
2.68 0.65 3.97
US Remanufacturing in Dollars (Billions)
Aerospace Automotive HDOR
Machinery Medical Devices Retreaded Tyres
IT Products Consumer Products All other
12.4
7.4
4.1
1
13.1
0.7
Europe Remanufacturing (Euros)
Aerospace Automotive HDOR Machinery
Medical Devices IT Products All other
Remanufactured Automotive Aftermarket: Reman Market Size by Region, Global, 2015 and 2022
Note: The base year is 2015. Source: Frost & Sullivan
Remanufactured Automotive Aftermarket: Reman Market Share by Region, Global, 2015 and 2022
2015 2022
RegionTotal AM CAGR
RemanCAGR
Global 4.9% 6.6%
NA 2.5% 3.7%
W Eu 2.2% 8.0%
E Eu 2.5% 8.6%
S America 5.1% 12.3%
China 14.7% 15.0%
ROW 4% 6.3%
Note: CAGR = compound annual growth rate
Note: NA = North America (US+Canada+Mexico)SA = South America (Brazil,+Argentina+Others)ROW = rest of world (Rest of Asia-Pacific+Africa)
2015 2022CAGR
(2015-22)
Global Market Size
$32B $50 B 6.6%
Remanufactured parts growth to total aftermarket parts growth ratio will be highest in Europe and South America
Light Duty Remanufacturing Market Size
Comparison of US and Indian Reman Environments: Case study on Mobile handsetsCreate awareness for higher income groups to accept remanufacturing as an option. Needs quality assurance for remanufacturing.
Establish quality standards for remanufacturing.
Critical Success Factors
USA India Solution
Product recovery process
Matured process. Service provider retail stores recover the phones from end consumers for remanufacturing.
Rudimentary. Most end users do not return the phones.
Establish incentives for returns and recover phones from end users.
Consumer acceptanceof remanufactured products
Consumers in all income sectors are open to remanufactured phones as replacement devices.
Only lower income groups are interested in remanufactured phones
Create awareness for higher income groups to accept remanufacturing as a option. Needs more than just awareness. Needs quality assurance for reman.
OEM responsibility OEM works with service providers to recover phones and remanufacture them
Most OEM’s not responsibleafter it is initially dispatched from their locations.
OEM’s not taking ownership can lead to brand erosion when 3rd party remfrs seize the oppty
Quality assurance Quality is guaranteed and is sold as a certified like new replacement device
No quality guarantees from the OEM
Establish quality certification for remanufacturing.
Source: Rathore et al. (2011) and Subramoniam et al. (2010)
Region Trade Laws Core Logistics Business Barriers
No trade restrictions Lower core logistics barriersMarket understands value proposition of remanufacturers, and so is widely accepted. Intense competition in market
No legislative barriers within the Euro Union (Schengen zone)
No core procurement, management, or logistics issues
Competition is generally intense, but regional and country specific.
Legislations prohibit export of used parts or cores
Once remanufactured parts are sold into Russia, cores are not returned due to the lack of collection programs.
Currently, no global remanufacturer has a remanufacturing base in Russia; no major plans known
Strict government mandate prohibits the import of remanufactured parts and export of cores or used parts.
Core logistics is not a problem, but there is a need to educate the aftermarket on proper core management practices
Legislation discourages global remanufacturers from setting up factories.
Legislations prohibit import of remanufactured parts and/or cores into China; remanufactured parts cannot be used for warranty replacements
Core logistics awareness remains low
Difficult to do business without a local partner
Legislations prohibit the import of cores or used parts into Brazil
The aftermarket does not understand the core procurement process
Global remanufacturers are setting up operations because the country is migrating away from repair/rebuild components to higher-quality remanufactured parts
Global Legislative Landscape and Ease of Remanufacturing
Source: Frost & Sullivan
Benefits/impacts
Industry and commerce – large industry Reman industry and commerce will grow with a mutually agreed set of standards. Reman departments from well-established OEM’s will see standardization across their global organization. Also work across geographic regions will be easier.
Industry and commerce – SMEs Where OEMs have a strong brand to fuel consumer confidence, SMEs will benefit from a standard definition of reman to provide confidence to their customers.
Government A global standard will lead to supportive legislation, better trade and increased domestic employment.
Consumers Consumers will have a better chance to get affordable, good quality products with publicized expectations
Labour Increased reman will provide more domestic labor opportunities even during recession times
Academic and research bodies Increased research potential from an established international standard. Ability to share best practices based on an agreed standard.
Standards application businesses The proposed standard will supplement existing standards, which will enable Standards application businesses to offer additional services to their clients.
Non-governmental organizations Increased clarity on the definition and process of remanufacturing will help these organizations to advance their missions.
Why International Standard?
Current Reman Process Challenges
• Lack of awareness of the process of remanufacturing
• Perception of core as “second hand parts”Value of the core not clearly defined. Cores are raw
materials for reman and need to be protected.
• Control non-conforming productsNo formal policy or regulation
• Verification of conformance with the standardAbsence of regulation of reman standards and liability
Goal
• Develop an international standard for a common set of standard processes acceptable to industry sectors globally for remanufacturing
Lessons Learned from ANSI Implementation
• Multiple reman definitions/terminologies across industries in the USA
• Foundation for additional standards (Example: PEARL standard)
• Promotes discussion of mutual concerns (Core management, Cross border reman)
Current Activities
• Initiated the international standard process
• Agreed on a project committee vs. technical committee
• Review with ANSI in progress
ISO Standard for RemanufacturingTimeline
July2017
RIC fills out form for approval of an ISO project committee
Initial draft developed and approved within RIC. Approved draft send to ANSI.
August 2017
September 2017
Draft received back from ANSI with recommendations
October2017
Form officially submitted to ANSI
November 2017
ANSI Conducts broad publiccomment on the proposal
January2018
Approval by AIC
May 2018
Ballot approved by ISO members. TMB approves project.
RIC, an American Standards Developer recognized by the American National Standards Institute (“ANSI”), initiated the multi-year process to develop an ISO standard for remanufacturing in 2017.
September 2018
Work starts on project to be completed in 2-3 years.
Questions?
Don Chenevert, Jr.Deputy General Counsel
SRC Holdings Corporation417-575-8336
Dr. Ramesh SubramoniamChair, Trade & Policy Committee
Remanufacturing Industries Council248-515-0861
ADVOCATE COLLABORATE EDUCATE