Automotive RemanufacturingTowards Sustainable Mobility…

• Remanufacturing , is the practice of taking end-of-life goods and rebuilding them into new or better condition ones, with a warranty to match.

• Remanufacture ensures the same product quality, durability and performance as new components while maintaining sustainability of resources

INTRODUCTION

Nature

Materials WasteManufacturing Products Usage

RemanufacturingRemanufacturing

ReuseReuse

RecycleRecycle DisposalDisposalSource : Advance Remanufacturing Technology Centre

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REMANUFACTURING IS ALSO KNOWN AS…

RebuiltRebuilt is synonymous with remanufacturing when used in connection with motor vehicle parts and systems but not the entire vehicle.

RefurbishedRefurbished is synonymous with remanufacturing of furniture systems for offices, hotel lobbies, and hospitals.

RechargedRecharged is synonymous with remanufacturing when used in connection with imaging products, such as laser toner cartridges.

Factory Reconditioned or RecertifiedFactory reconditioned or recertified is synonymous with remanufacturing when referring to consumer products, such as electrical hand tools. Source: Dr. Nabil Nasr of the Golisano Sustainability Institute of the Rochester Institute of Technology is gratefully acknowledged).

STANDARDS OPERATING PROCEDURE (SOP)STANDARDS OPERATING PROCEDURE (SOP)

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QUALITY ASSURANCEQUALITY ASSURANCE

REMANUFACTURING PROCESS

PROCESS FLOW

Product Correction & Reverse Logistics

Product Correction & Reverse Logistics Incoming receivingIncoming receiving Store until neededStore until needed

Disassembly / DemanufactureDisassembly / Demanufacture

CleaningCleaning

Remanufacturing or Restoration ProcessRemanufacturing or Restoration Process Process

ScrapProcess Scrap

AssemblyAssembly Warehouse Shipping

Warehouse Shipping

Needed in production Needed in

production

Initial inspection

Initial inspection

Component Recertification

Component Recertification

Final Product Inspection

Final Product Inspection

No

Yes

Planned Salvage

Pass InitialInspection

Failed Initial Inspection

In Process Inspection Fallout

Recycle

PassPass

Rework

Fail

Rework

New Components

Planned Discard

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TYPES OF REMANUFACTURING PRODUCTS

• Remanufactured products include:

– A/C Compressors

– Alternators

– Engines

– Fuel System Components

– Rack and Pinion Steering

– Starters

– Steering Gear Boxes

– Transmissions

– Turbochargers

– Water PumpsSource: William A. Tanenbaum, Kaye Scholer LLP, Chair, Technology, Intellectual Property & Outsourcing Group Green Technology Group New York Office

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WHY REMANUFACTURING? ENVIRONMENTALLY SUSTAINABLE?

• Reduces energy costs and environmental impact of:

– Raw materials and natural resources

– Manufacturing products

– Shipping components and final product

• What are the environment savings?

– Saves enough natural resources to fill a train 1,100 miles long!

– Saves enough energy to power 6 million automobiles!

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REMANUFACTURING BENEFITS

Approximately 85% of the energy expended in the manufacture of an original product is preserved in the remanufactured product. Approximately 85% of the energy expended in the manufacture of an original product is preserved in the remanufactured product.

Source: MIT study on the remanufacturing of automobile component, 1981

Recycling Reclaims

Material

Remanufacturing Reclaims

Material

Energy from Casting, Machining, etc.

Labor from original processes

Capital

Function/Design Intent

Ecologic Benefit of Reman – Automotive Parts

Delco CS 130 100A alternator

•The remanufacturing ecological benefit is the recovered energy and avoided environmental impact minus the impact of the remanufacturing processes.

CS130 Example:

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Ecologic Benefit (2)

• Material analysis for Delco CS 130 100A alternator:– Kwh used to create one NEW alternator: 61.1 Kwh

– CO2 emissions to create one NEW alternator: 66.6 lbs

• Benefits from remanufacturing one thousand produced Delco CS 130 100A alternators each year:– Annual energy savings: 37,700 Kwh– Annual CO2 savings: 51,357 lbs

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Source: William A. Tanenbaum, Kaye Scholer LLP, Chair, Technology, Intellectual Property & Outsourcing Group Green Technology Group

New York Office

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GREEN IMPLICATIONS• Remanufacturing is designed to allow a portion of product to be

continuously upgraded with improved version to take advantage of advancing technology

• Compared with new components, Remanufactured components save *:

– >60% energy

– >70% materials

– >90% water

– >80% pollutant emissions

– >80% value retention

– 50-70% cost reduction

*Source : Advance Remanufacturing Technology Centre

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REPAIR VS. RECONSTRUCTION

• Right of repair includes

– Right to preserve useful life

– Right to replace individual unpatented elements that themselves have a shorter life

• Reconstruction includes

– Making a new article (after original article, viewed as a whole, has become “spent”)

– Creation of a second entity

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CHALLENGES• Will remanufacturing products to obtain “green” benefits be deemed

“permitted repair” or “prohibited reconstructions” – given the commercial objective of remanufacturing?

E.g. But does incorporating a more advanced chip from a third party supplier constitute infringement of that third party’s patents?

• Predict use of more expansive contractual provisions, from both licensees and licensors to clarify scope of rights with related to warranty

• Test result when remanufacturing includes enhanced or “new” technology

– Even if permissible repair of “old” patent, use of “new” technology may require licensee for that patentee

• Patentees will argue that provider of enhanced technology is liable for inducing or contributory infringement

MOVING FORWARD

• Review current related policies e.g. rebuilding, IP.

• Standards - recyclability, efficiency, design, material, innovation.

• Procedures - energy savings, reduce emissions, enhance safety

• Awareness Education

THANK YOU