Rematec News | Inherit the wind by RAI Amsterdam

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October/November 2019

NETWORK | KNOWLEDGE | BUSINESS

REMANUFACTURING INTERNATIONAL

INHERIT THE

WIND What turbine reman can learn from automotive

Also Pictures and reaction from Rematec Asia MERA Sustainable Manufacturing Conference: report BMW shines headlights on remanufacturing

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EDITORIAL

‘The inaugural Rematec Asia represents the beginning of something big in China’

he fireworks are over. Rematec Asia has been and gone – but the first edition of the show in Guangzhou exceeded expectations. Indeed it was, in Rematec director Niels Klarenbeek’s colourful phrase, ‘a multiple-stage rocket of surprises’. You can read more from him on p11. With the goal of bridging east and west in reman, this inaugural edition brought together European, North American and other foreign remanufacturers with their counterparts in China. The hosts were welcoming and liked what they saw. Talking about what can, and cannot, be done in the country is valuable. Opportunities – and, yes, difficulties – are on

the table. From these meetings, business will be done. The second Rematec Asia, in October 2020, is already being planned. Mark your diaries. Reman50, a new grouping of the most influential companies, organisations and people in Chinese remanufacturing, was launched at the Guangzhou event, mirroring to some extent the OEM-Reman Network which was unveiled at Rematec Amsterdam. Both groups are aimed at making connections and facilitating networking, and everyone can agree on the benefits of that. We are at the start of something big: our coverage from China starts on p7. Of course, remanufacturing has a great deal to offer industries outside the automotive sector, and wind energy could be the next big market. There are hundreds of thousands of wind turbines installed worldwide, and the first wind farms started sprouting up in the 1980s - time for renewal, in other words, and reman is an increasingly attractive option for manufacturers in this growth industry. Finally, in this issue of Rematec News, you will also find a full report on MERA’s Sustainable Manufacturing Conference from Michigan (p18). Not only that, we’re delighted to welcome MERA as a regular editorial contributor to the magazine, with its first article on p12. The organisation has challenged the industry to think differently about reman and its place in the world and we look forward to sharing its insights with our readers. Adam Hill, Editor ahill@ropl.com

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Published by RAI Amsterdam B.V. P.O. Box 77777, 1070 MS Amsterdam The Netherlands In association with Route2Market Editor Adam Hill: ahill@ropl.com Phone: +44 (0)7931 502947 US correspondent Denise Rondini: drondini@gmail.com Route One Publishing Managing Director Andrew Barriball: abarriball@ropl.com Rematec News: advertising manager Sara Clark Phone: +44 (0)1732 445302 sara.clark@talkmediasales.co.uk Contributors in this issue John Chalifoux, Niels Klarenbeek, Daniel Koehler, Denise Rondini, Volker Schittenhelm Marketing Communications & PR Evelien Feijen: e.feijen@rai.nl Phone: +31 (0)20 54915 81 Rematec & Rematec Asia: sales manager Yorien de Ruijter Phone: +31 (0)20 5493075 Fax: +31 (0)20 5491889 advertising@rematecnews.com Publisher Evelien Feijen: (responsible under Dutch Press Law) e.feijen@rai.nl Design, Production & Printing Route One Publishing Ltd Copyright RAI Amsterdam, Amsterdam, The Netherlands Reproduction No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopied, or otherwise, without the prior written permission of the publisher, RAI Amsterdam B.V. Subscription magazine & eNewsletter www.rematec.com Change of address info@rematecnews.com Rematec News online www.rematec.com/news Circulation Approx. 12,000 readers per edition. The magazine is delivered on a controlled circulation basis to recipients in Western Europe, Eastern Europe, Africa, North America, South America and Asia.

Rematec News

CONTENTS

Rematec Asia: show report The first edition of Rematec Asia saw remanufacturers from all over the world meeting their Chinese counterparts face to face

‘I want to shine a light on remanufacturing’

MERA’s Sustainable Manufacturing Conference hears from one of reman’s friends in high places

COVER STORY Wind power

News BMW shines headlights on remanufacturing; RIC-RIT World Reman Conference sets the standard; and bankers think there’s money in the circular economy

MERA

We ask what turbine remanufacturers can learn from the long experience of their counterparts in the automotive sector

Big question

Diary

27 Viewpoint

APRA Europe asked its members why remanufacturing is important to them - and you answered

The world of reman is never sleeping, it just has its eyes closed sometimes: as one event ends, another is not far away... somewhere in the world

Engine of opportunity Breakdowns and component failures are a pain for car owners - but they could represent big money for remanufacturers

‘The first Rematec Asia is a great start - now let’s build on the opportunities in China for remanufacturing companies’

Sinomachint

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Rematec News

NEWS DIGEST

Optimism and a sense of urgency to standardise best practices were evident in this year’s programme at the RIC-RIT World Remanufacturing Conference, organised by the Remanufacturing Industries Council (RIC) and Rochester Institute of Technology (RIT). Dr. Nabil Nasr, director of the RIT’s Golisano Institute for Sustainability, looked forward to the introduction of RIC’s three new certification levels based on the ANSI standard established in 2017, which differentiates reman from other processes that make up the circular economy. • Full conference report in the December/January edition of Rematec News

MAHLE ADDS ELECTRONICS BUSINESS UNIT

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recycling firm Alba, Witschnig emphasised the difficulty of reverse logistics: “We produce more than two million cars a year in 30 places worldwide. But more than two million people every year have different cars, and you have to get them back to recycle them. This is a difficult process which might make it a little more difficult to get the real recycling or remanufacturing of these cars.”

is actually currently very small.” Describing Encory, BMW’s joint venture with

BlackRock launches first CE fund Global asset management company BlackRock has launched its first circular economy (CE) fund with the Ellen MacArthur Foundation – a sign that the sustainability movement is attracting the interest of global investors. The move is part of a new ‘global partnership’ between the organisations which “will bring together the power of investment and the value creation opportunity of a CE”. The fund itself is aimed at driving investments in businesses “already contributing to, or benefiting from, the transition to a CE”.

The foundation has identified finance as a means of accelerating this shift and says the partnership with BlackRock is a “milestone” in its “broader agenda of unlocking the power of finance and investments to scale the CE”. Its role is to give the company guidance which will in turn shape the way money is invested – and the foundation says it is looking to do more work in finance in future.

BMW has highlighted its parts remanufacturing operation in an interview encompassing the car manufacturer’s circular economy activities. Talking to GreenBiz, Jury Witschnig, BMW’s head of sustainability strategy for products and production, said: “This is a really interesting market — it’s about how to take the materials and modules out of a car before they’re scrapped. The market

Reman is focus of Circular Cars Initiative Remanufacturing is one of three pillars of the Circular Cars Initiative, a programme unveiled during the United Nations Climate Action Summit. Organised by the World Economic Forum and World Business Council for Sustainable Development, the initiative aims to reduce the automotive industry’s carbon footprint. EIT ClimateKIC, a European publicprivate partnership which

promotes decarbonisation of business, is a partner. It says: “The initiative works

Mahle Group is seeking to embrace new powertrain technologies by creating a new business unit for electronics and mechatronics. Heinz Junker, chairman of Mahle’s supervisory board, said it was “actively reinforcing our innovative strength in the field of alternative drives”. Mahle CEO Jörg Stratmann said: “By transferring these activities into a business unit and combining it with the product areas of compressors and pumps for strategic purposes, we are focusing all our efforts on further growth and the ongoing development of our product portfolio for the mobility of the future.” Wilhelm Emperhoff, currently in charge of Mahle’s filtration and engine peripherals among other things, will head the new business unit.

BMW highlights reman activities © Stig Karlsson | Dreamstime.com

RIC-RIT SHOWS STANDARD OPTIMISM

towards transforming the industry through the lens of the circular economy and mobility-as-a-service. The joint partners have three focus areas: design for longevity through sharing and pooling concepts, improved materials management and advanced re-manufacturing.” Environmental services consultancy SystemIQ and car-as-a-service company LeasePlan are also involved.

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REPORT

STRAPLINE

Electricity in the air: Reman50 is launched in Guangzhou

BRIDGING the gap The first edition of Rematec Asia saw European, South-east Asian and North American remanufacturers meeting their Chinese counterparts face to face â&#x20AC;&#x201C; with all gaining a better understanding of the challenges and opportunities which exist in doing business with one another Pictures: Sinomachint Xie Jianjun of CPRA launched Reman50 (above) at Rematec Asia

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Rematec News

REMATEC2019 Rematec EVENTS HIGHLIGHTS ADVERTORIAL REPORT

The Rematec Theatre was packed for the Opening Ceremony and remained popular for a full programme of presentations

ridging the gap between east and west in remanufacturing was always the main aim of the first edition of Rematec Asia. Bringing remanufacturers from North America and Europe into close proximity with potential partners in China to examine areas of opportunity and cooperation has great value – as does giving them a clear idea of the challenges involved.

Niels Klarenbeek, director of Rematec, was pleased with the event, which took place from 11-13 October in the southern city of Guangzhou. "Rematec Asia succeeded in its ambition to offer insights in Chinese remanufacturing and play an active role in connecting international and Chinese businesses,” he said. “The first edition offers a strong foundation to further develop the event in the years to come. Expectations were

high – but this was a multiple-stage rocket of surprises!”

Reman showcase RAI Amsterdam was particularly keen to thank its organising partners - the China Parts Remanufacturers Association (CPRA) and Sinomachint (China National Machinery Industry International) - as well as the many exhibitors and visitors for their support and attendance.

Curtain up on China’s Rematec Theatre The Rematec Theatre, open to all visitors to Rematec Asia and AAG, was a focal point of the show. A raft of high-level presenters from China’s reman industry included Shunxiao Shen, deputy general manager of Baike Intelligent Technology Co, whose subject was engine control unit reman; and Bingshen Li, president of Hong Kong Commercial Vehicle Maintenance Association. International speakers included Jean-Paul Borsten, president of BOVAG, who talked about engine reman trends; John Chalifoux, president of MERA; Joe Trommer of Encory and Thijs Jasink of Alec. Topics such as core logistics, cleaning technology and best practices in Chinese reman were all covered in well-attended, multilingual sessions with translations available.

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REMRematec REPORT 2019 HIGHLIGHTS

In a bid to provide a showcase for the burgeoning Chinese remanufacturing industry, Rematec Asia was co-located with one of China’s foremost trade shows, Automotive Aftermarket Guangzhou (AAG). Xie Jianjun, secretary general of the CPRA’s Auto Parts Remanufacturing Branch, launched the Reman50 Forum at the show, which brings together remanufacturing professionals in a similar high-level,

informal way to Rematec’s OEM-Reman Network, which was launched at the Amsterdam show in June. Speakers at the forum’s inaugural one-day conference included Xin Yao, vice president, Suzhou Environmental Innovation Research Institute, Tsinghua University; Zhiyong Huang from Guangzhou Huadu Global Automatic Transmission; Wei Zhang of the BeijingTianjin-Hebei Remanufacturing Industry

& Technology Research Institute; and Helong Yu, deputy director of the State Key Laboratory of Remanufacturing Technology. It was a meeting point for influential leaders from government regulators, vehicle manufacturers, academic institutions and representatives from global automotive brands such as BMW, Donfeng, FAW Group, Geely, Mercedes-Benz, PSA Automotive and Volvo Car Group.

Welcome to Guangzhou AAG’s Welcome Dinner was a formal occasion attended by 500 delegates, which allowed international attendees and domestic reman players to network and connect with each other against a colourful backdrop of Chinese cultural performances - and to enjoy the famous Cantonese cuisine.

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Rematec News

REPORT

Commercial opportunities In Guangzhou, getting a feel for the commercial opportunities for everyone involved was high on the agenda. "We've been able to organise valuable business meetings between local and international remanufacturing ventures,” explains Yorien de Ruijter, Rematec Asia exhibition manager. “It was beneficial for all parties to meet in person.” There is great potential for international reman organisations in China’s domestic market as the central government takes sustainability seriously. Proof of this comes in the legislation which has been introduced to promote reman

and in the substantial investments already made in remanufacturing zones such as Lingang (Shanghai area), Wuzhou (Guangxi Province), Hejian (Hebei Province) and Guangzhou (Guangdong Province) – location of Rematec Asia. China’s rapidly-maturing industry will also be a magnet for demand in affiliated services such as cleaning, machining, diagnostics, core management and reverse logistics. Industry veteran and APRA Europe founder Fernand Weiland made a

presentation at the show and was impressed by the scale and organisation. “Rematec Asia was a great event for European and Chinese exhibitors and visitors alike,” he told Rematec News. “I believe Rematec Asia has a great future.”

Reman on tour The last day of Rematec Asia included a tour to local remanufacturers, taking in the recentlyopened Guangzhou Huadu auto parts market. On this immense site, a staggering 1,200 shops offer a wide range of automotive parts, including cores. Return logistics in China is at a relatively early stage of its development and therefore remains a challenge – an important factor into which

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this stage of the excursion provided useful insight. Meanwhile, Guangzhou Kuayue Auto Parts Corp opened its EPS steering parts reman facility to the visitors, showing off an impressive number of cores on stock and updating the international delegates on the most recent certification regulations that apply to Chinese reman. The final stop on the tour

was Guangzhou Huadu World Wide Transmission, a large Chinese original equipment contract remanufacturer, whose speciality is the reman of automotive transmissions for leading Chinese vehicle manufacturers. The company’s state-of-the-art facility is setting the trend for remanufacturing in China and gives a clear indication of where the industry can go.

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REPORT

European reman veteran Fernand Weiland (centre right) signs copies of the Chinese version of his latest book

VIEWPOINT

“First Rematec Asia offers a strong foundation to further develop the event” Niels Klarenbeek

“B

ridging the gap between east and west in reman was always our aim with Rematec Asia – and that is exactly what we did. We had a significant group of international people with us, and visitors included reman representatives from manufacturers such as BMW, PSA, Mercedes-Benz and Volvo, all of whom were interested in the Chinese market. They learned about regulation, about who’s who – and with the excursions we organised to local companies, we were able to get them to places they would never have been able to on their own, such as the Guangzhou core market, which has only been going for six months or so. At the Rematec Theatre, which has been such a feature of the Amsterdam

editions, many international visitors spoke on stage – and we were also able to get Chinese speakers talking about the industry. It was phenomenal - it literally worked both ways. Having Rematec Asia co-located with the AAG show meant that it was very well visited. Remanufacturing in China is still undervalued in terms of acceptance and awareness, and having the two shows combined allows workshops and automotive technicians visiting AAG to become familiar with the reman parts that are available – and their quality. We are supporting the country’s reman industry: an item on the sustainability benefits of remanufacturing even made it onto Chinese TV. About 60 years ago in Europe, authorised car dealerships were making money through sales of new cars. Over the last few decades, that has shifted as new sales declined and focus was put on vehicle maintenance and aftersales. Different revenue streams had to be found. What does this have to do with reman in China? Well, after exponential growth, new vehicle sales in China are also stabilising: this means that again there must be a shift in dealerships towards maintenance in order to make money. The aftersales channels and return logistics are going to become increasingly important – and that’s where reman comes in. Rematec Asia succeeded in its ambition to offer insights in Chinese remanufacturing and play an active role in connecting international and Chinese businesses. This was by far the largest reman event in China to date – and the first edition offers a strong foundation to further develop the event in the years to come.” Niels Klarenbeek, director of Rematec

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Rematec News

A world where remanufactured goods are demanded Reman must go mainstream if the industry’s green benefits are to reach a wider audience, insists John Chalifoux of MERA - The Association for Sustainable Manufacturing

“

hether you think you can, or whether you think you can’t, you’re right.” Those powerful words were first spoken by Henry Ford, the founder of Ford Motor Company. He is also the person known for establishing the automotive remanufacturing industry in the US. Henry Ford believed if you judge yourself to be capable of success, you will increase your chances of actual success. This quote captures the essence of today’s remanufacturing industry. If Henry Ford were here today, he would be proud of the progress of our great industry. He would see that remanufacturing has moved from the shop floor to the factory floor, and the quality of remanufactured parts is on par with new. However, with all the work to professionalise our industry, it is likely Henry Ford would say we can do more to increase awareness and perception of today’s remanufactured goods. Henry Ford would encourage us to mainstream our efforts. ‘Professionalise’ is a word that can be found in the DNA of excellent companies throughout our industry. Over the years, the quality of their remanufactured goods has risen to the point where it is indistinguishable from new. But rational buyers particularly end users - still view reman as something less. And as long as their perception of the quality and value of remanufacturing doesn’t match reality, the green benefits aren’t going to matter. Since its inception in 2011, MERA has taken strides to help perception catch up with reality. Every day, we

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challenge ourselves and the industry to look at paradigm shifts that lead to messaging the rest of the world will understand. We place the focus on the root of the word, not the prefix. Quite simply, remanufacturing is ‘manufacturing with reuse’. This small shift in thinking helped others – particularly policymakers in Washington, DC – to recognise that remanufacturing, with all of its environmental benefits, is the only ‘re-’ word with ‘manufacturing’ in its name. Remanufacturers can professionalise and mainstream what they do with Manufactured Again™. This

“End users still view reman as something less - and as long as their perception doesn’t match reality, the green benefits aren’t going to matter”

remanufacturing certification programme – based on ISO 9001, IATF 16949 and other ISO-based quality management system standards – holds remanufacturing and new manufacturing to the same international quality standards. The programme professionalises and mainstreams their work because certification is tied to the world’s most recognised manufacturing process standard. After just two years, the certification programme includes 29 companies and 68 registered facilities worldwide. “Reduce. Reuse. Recycle.” has been in the public lexicon for years, yet it does not fully capture one very viable solution to today’s environmental challenges. In response, MERA introduced a new symbol for sustainable manufacturing. It looks familiar because it is the recycling symbol with an extra arrow. In the sustainable manufacturing industry, we know the remanufacturing of existing goods should occur before traditional recycling; however, that message is not understood outside our circles. The new symbol is helping us convey to mainstream media that remanufacturing deserves a seat at the head table. Whether it’s a circular economy discussion or a discussion on reuse and recycling, it can’t be complete unless reman is included. “Reduce. Reuse. REMAN. Recycle.” The celebration of Earth Day is another way remanufacturers can mainstream their message. This annual event, which began in 1970, occurs each year on April 22. It is coordinated globally by the Earth Day Network, and now includes events in more than 193 countries. By celebrating Earth Day, our industry can communicate the environmental benefits of remanufacturing on a day when the rest of the world is listening. As long as we think we can live in a world where remanufactured goods are demanded, we’ll be right! John Chalifoux is president and chief operating officer of MERA - The Association for Sustainable Manufacturing.

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WIND TURBINES

Inherit the Rematec’s first International Forum on Wind Turbine Remanufacturing took place in Amsterdam. Adam Hill asked several experts to map out their thoughts for the nascent industry – and consider what lessons could be learned from the automotive sector

here are hundreds of thousands of wind turbines operating worldwide – up to 350,000, according to one estimate. The first wind farms were built in the early 1980s and many of these have been replaced with new - larger - turbines over the last decade or so. Average turbine sizes are continuing to grow. According to the Global Wind Energy Association Global Wind Report 2018 the installed capacity, combining both offshore and onshore wind, by last year was 591GW. In Europe, 22GW of that is slated to reach ‘end of life’ between now and 2023 and trade association WindEurope says: “A significant share of Europe’s wind turbine fleet will come to the end of its projected lifetime within the next 10-15 years.” “The design lifetime of wind turbines is 25 years,” explains Jos Beurskens, CEO of SET Analysis. “Most of the presently installed machines indeed make it to 25 years and even longer.” In order to fulfil the long-term decarbonisation agendas of governments worldwide, the share of wind in the energy mix needs to grow further. Thus the windpower market itself will grow and, since the intention of the industry is to produce green energy, it is going to need to think hard about sustainability.

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Gearboxes and drives With this in mind, Rematec held the first International Forum on Wind Turbine Remanufacturing at the Rematec show in Amsterdam in June. The event was at the vanguard of a new trend: the first edition of WindEurope’s End-of-Life Issues and Strategies (EoLIS) seminar was held recently at Leuven in Belgium. What to do with wind turbines is a subject now occupying minds across business and academia. Wind energy companies set great store by operations and maintenance (O&M). Research by Wood Mackenzie suggests that 205,000 new units will be added to the global onshore fleet by 2027, equivalent to 580GW of capacity. AsiaPacific, driven by China, will become the largest O&M market in the world in the next decade, the consultancy predicts. “Yet existing fleets in US, Germany, Spain, and Brazil still represent a sizeable chunk of the O&M market,” it says in Global Onshore Wind O&M Trends 2019. “As these fleets age, more focus is given to keeping turbines operating for longer, in the form of lifetime extension activity and reliability improvements.” The good news is that wind turbines are not dumped into landfill at the end of their working lives – and they consist of many components

that automotive remanufacturers would find familiar, such as gearboxes and drives. There are clear reman possibilities here: indeed, most of the components in the nacelle – the housing which contains elements such as the turbine’s hydraulics, gears, generators, main bearings and pitch mechanisms – would be up for grabs. “Other major components for recycle include transformers, controls, electrical switching and protection equipment,” explains Bob Sherwin, managing partner for EAPC Wind Energy Services, North America’s sales agent for wind farm software package windPRO. “The electrical industry already does this.” While some units are rebuilt and installed in other locations, Sherwin says that the most problematic components to deal with are the composite blades and towers, although composites can be ground for other uses, such as aggregates-mixing in roads.

Reman potential Beurskens believes there is great potential. “A real gap in making wind energy fully circular is re-using rotating parts - bearings for blade pitching, bearings for yawing, gearboxes - and

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WIND TURBINES

reuse of precious metals from sensors,” he says. “And it is exactly here where reman comes in.” Philipp Schmid, group strategic marketing manager at SKF, agrees that there is room for reman: “Absolutely! Bearings and lubrication systems are an excellent example to contribute to the circular economy and green energy production.” Leo Schot, ex-CEO of LM Wind Power, says that original equipment manufacturers (OEMs) are already hard at work on finding end-of-life solutions, such as reusing the material in turbine blades. “I know that LM Windpower is working actively on sustainability,” he adds. Remanufacturing is required to close the loop and get more circularity, insists Eric Pieterse, business developer at Arkom Windpower. “There is a real good opportunity for the industry to introduce reman in the sector and develop a new business,” Beurskens continues. “The question is whether new companies will jump [or whether] OEMs will include that service into their portfolio. Both options have their specific advantages.” While a lot of components and assets are remanufactured today in wind turbines, Hannes Leopoldseder, business unit manager at SKF, explains that companies may not call it that. “The term ‘remanufacturing’ is not that widely used in the wind industry yet – ‘serviced’, ‘reconditioned’ are the terms often used. Nevertheless it is already done.” © Sutisa Kangvansap - Dreamstime.com

Help needed Although there is undoubtedly interest, Pieterse sees that more help is needed. “The focus is on growth, and gaining and keeping market share,” he says. “Therefore, I think companies put resourcing on creating and capturing value, instead of closing the product loop. Nevertheless, when there are incentives - maybe induced by governments - same as with electronics,

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it could stimulate remanufacturing. At least the waste should be centrally tracked, so in case new technologies arise, the supply can be easily identified.” Wind turbine reman can take heart from the example of car OEMs, which have been remanufacturing their own products for decades in some cases. “The wind energy sector can learn a lot from the automotive sector,” says Beurskens. “Not so much on technical issues, but on standardised processes, logistics and standards.” Certification and standardisation are both vital for reman in the wind energy sector, he insists. Sherwin agrees with this, particularly from the point of view of finance and insurance. Leopoldseder highlights the fact that the windpower industry is tightly regulated, and suggests: “The certification bodies need to look into the area of remanufacturing more intensively.” Standardisation in the remanufacturing process would obviously mean that equipment which has been remanufactured should have the same quality as ‘new’ parts. Clients will hesitate to accept a reman part even when the price is reduced – this will all be sounding familiar to Rematec News readers. But Sherwin and others point out that, while there are things to take from automotive, “the volumes are smaller and the components much larger”.

Overcoming resistance “Cars are far more available than wind turbines, so I suppose the market is small,” acknowledges Pieterse. It is a good point. For Leopoldseder, it is worth looking at it more broadly. “We are taking the learnings from other industries like automotive, railway and metals,” he says. “What is impressive in automotive is that remanufacturing is industrialised - and for sure there are a lot of learnings which can be translated into wind.” Resistance from consumers is a common problem for remanufacturing but Pieterse says that the lack of availability of sufficient information, parts, data, insurance and so on contributes to this. For Beurskens, it is ➤

Rematec News

WIND TURBINES

Philipp Schmid, SKF: ‘Continuing running older turbines can still be a lucrative business’

➤

Hannes Leopoldseder, SKF: ‘The term “remanufacturing” is not that widely used in the wind industry yet’

also a matter of priorities: “I would say that there is no resistance but a lack of urgency - yet - and lack of knowledge from other sectors.” Bearing remanufacturing is not that well known to the wind industry yet, adds Leopoldseder. “When it comes to quality, we at SKF remanufacture bearings for trains since many years. Railway applications are high demanding applications when it comes to safety as well as performance. If remanufacturing of bearings work in railways, why shouldn’t it work in wind as well?” Schot is not sure if there is resistance to reman as such and describes common warranty and service arrangements, after which operators can decide to do repair, overhaul and maintenance with someone other than the original supplier. “As wind turbine products increase in size and efficiency while reducing in cost, replacement for a new turbine might

Bob Sherwin, EAPC: ‘Volumes are smaller [than automotive] and the components much larger’

Jos Beurskens, SET Analysis: ‘The wind energy sector can learn a lot from the automotive sector’

be feasible instead of repair. Midlife upgrades, repowering (other blades) can be options to increase output.” OEMs are interested in new ways of doing things and – in a comment that will chime with anyone in automotive reman – he says: “OEMs show a tendency to organise more control on the service market.”

Resource efficiency The sorts of resource issues that governments and climate change protesters around the world are currently grappling with are well known to the wind energy sector. How can we manage older turbines effectively – and improve the sector’s resource efficiency? “The average energy density of the wind - and solar radiation - is quite low,” explains Beurskens. “In order to generate significant amounts of energy for our society, large rotor-swept areas are needed, thus a large number of There are up to 350,000 wind turbines installed worldwide today

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Eric Pieterse, Arkon: ‘Remanufacturing is required to close the loop’

installations. This means that wind energy technology is a material-intensive energy generation technology. Efficient use of materials is a must to make the technology fully circular.” This is why, he insists: “For each key component (blades, tower, rotating parts, etc), dedicated and well organised reuse strategies need to be - and are being - developed.” As things stand, turbines can already operate for a quarter of a century. “However, by standardisation, economy of scale and technology development, the costs have been reduced extremely,” Schot says. “Repowering and upgrades are [already] offered or thought of for life extensions and industry is working on solutions to reuse the components, such as blades.” The market will, in effect, make some of these decisions, suggests Eric Pieterse of Arkom. “It is determined by the business case and finally the project contracts. When clients ask for longer project duration, manufacturers can supply more robust wind turbines with an extended maintenance/turnaround schedule. Somehow an extended wind turbine life should be taken into account in the business case, maybe even before the project is on the drawing board.” The fact remains that reman is going to have a role to play in wind energy – since it will be good both for the environment, and for companies’ bottom lines. “We have to move from a linear economy to a circular one also for the old turbines still operating,” concludes Schmid from SKF. “Continuing running older turbines can still be a lucrative business. If you use remanufactured bearings you can save up to 50% compared to buying a new one. This impacts the business case in a positive way.”

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“I want to shine a light on remanufacturing!” Haley Stevens, member of the House of Representatives, is on reman’s side: Denise L. Rondini, Rematec News US correspondent, reports from MERA’s latest conference at the Automotive Hall of Fame in Dearborn, Michigan… Pictures: MERA

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MERA SUSTAINABLE MANUFACTURING CONFERENCE: REPORT

John Chalifoux

rging attendees to help put the focus on the manufacturing part of remanufacturing, John Chalifoux, president and COO of MERA kicked off the association’s Sustainable Manufacturing Conference at the Automotive Hall of Fame in Dearborn, Michigan, US. This year’s event – which had the theme of ‘Excellence in Manufacturing’ - began and ended with town hall sessions. The first one, dedicated to automotive reman, featured GM Customer Care and Aftersales, while the commercial vehicle town hall featured Daimler Trucks North America. Tod Stump, manager, global remanufacturing, GM Customer Care and Aftersales (CCA), sees huge opportunities for reman as the auto industry moves to autonomous technology and alternative forms of vehicle propulsion. However, he was quick to say that “internal combustion engines and transmissions are going to be around for a long time”. Stump also said: “Sustainability is here to stay; it is not just a buzzword. It is everywhere now.” Sustainability has three pillars, he believes economic, environmental and societal. Remanufacturing is a part of GM’s

commitment to sustainability because it saves money, reuses material and helps the planet, Stump explained. CCA is having an impact throughout the vehicle’s life cycle and Stump said it is not too early to talk about reman during the new product concept and design stages. “We know when we launch a new transmission that we will be remanufacturing it at some point. There are all kinds of things that can be done upfront to aid remanufacturing.” He added that GM tries to have the design for remanufacturing discussion up front at the same time it discusses things like price and delivery with its suppliers. GM prefers its suppliers do the remanufacturing since they own the intellectual property (IP) and have the necessary test equipment – but if a supplier does not want to do the reman, it has to give up the IP to GM. Closing his remarks, Stump reiterated that remanufacturing’s future is bright with opportunities for hybrid batteries, advanced propulsion technology, control modules, infotainment/electronics and headlamp technology. “Sustainability is here to stay and remanufacturing is large and growing.” Building on the sustainability theme, in the conference’s closing session, Brian Lewallen, president, aftermarket solutions, Daimler Trucks North America, said: “We take stewardship seriously. We want to help elevate our business and the entire industry.” He explained that the company “has been focused internally on products, but now realised that we have to focus on customers and listen to them more”. To be more responsive to customers, Daimler combined Detroit Reman and Alliance Parts into DTNA Aftermarket Solutions. Lewallen said: “As things are changing in the market you need to look at yourself internally and look beyond the way you have always done things to find new ways to operate.” ➤

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“Sustainability is here to stay - it is not just a buzzword” Tod Stump, GM CCA

“The world is changing whether you want it to or not” Brad Williamson, Daimler Trucks

“Core supply is capital intensive you will see people joining forces and some may go away” Justin Greenberg, DieselCore Rematec News

MERA SUSTAINABLE MANUFACTURING CONFERENCE: REPORT

➤

Brad Williamson, director of aftermarket solutions sales and marketing for Daimler Trucks North America, said: “For reman that means we look at where we can reman and then sell. How do we take care of the entire customer experience from ‘I need a truck’ to ‘I am going to sell a truck’?” He added: “The world is changing whether you want it to or not.” One of the biggest changes is in the connected, autonomous, shared and electric (CASE) area: “There are 200,000 trucks that are connected, but how do you use that connectivity?” Lewallen and Williamson talked about some of the potential market disrupters they see, including ‘core-less’ remanufacturing, knock-off components and pricing transparency. Williamson insisted that the industry “has to simplify core returns - I have never heard anyone say core is easy”.

Reman: the view from Capitol Hill MERA has the ear of leading politicians as part of its extensive lobbying efforts, and the honourable Haley Stevens, US Representative for the 11th District of Michigan, addressed the MERA conference. “I represent the largest contingent of suppliers in the country,” she said. “You recognise that the circular economy is good. You can manufacture and innovate and be sustainable because it is good for your bottom line and good for our future. And that is a message I am bringing to Washington.” Stevens explained that Congress is having conversations about the future of work, artificial intelligence and recycling technology in the supply chain. “I want to shine a light on remanufacturing and show how we can make measured and meaningful changes,” she concluded.

Imagining the future Products of the future - and preparing for the future of remanufacturing – were the topics on which Aneesh Padalkar, principal, and Dan Foster, manager, at Ricardo Strategic Consulting, shared their insights. Padalkar cited a number of

challenges remanufacturers are facing: from the rising cost of reman that is the result of advanced methods to increase fuel economy and reduce emissions, to the shortened life cycles of powertrains to increased complexity of small parts like starters, alternators,

calipers and headlights. The challenges do not end there. “The rapid influx of electric is opening up opportunities for service revenue and 4R [Reduce. Reuse. Reman. Recycle] strategies, but new skills are needed,” Foster said. However,

Aneesh Padalkar Ricardo Consulting

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remanufacturers will be challenged with long-term storage issues of batteries, the rapid pace of technological developments, the inability to get a supply of legacy parts and supplier IP issues. Just how rapid the deployment of electric vehicles (EVs) will be is open to debate. Padalkar says that - depending on who you talk to - estimates are that EV use will grow 15% to 50% by 2030. “The onus will be on the reman community to come up with solutions to see if they can keep the TCO [total cost of ownership] for EVs low.” He explained that customers expect battery replacement to be less than $5,000 - but the reality today is that number is closer to $9,000. Remanufacturers will need to familiarise themselves with the two kinds of battery failure: acute and capacity degradation. Not all batteries that failed because of capacity degradation can be refurbished.

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MERA SUSTAINABLE MANUFACTURING CONFERENCE: REPORT

“The rapid influx of electric is opening up opportunities for service revenue… but new skills are needed” Dan Foster, Ricardo Strategic Consulting

State of cores

“We are challenged with how rapidly the technology is changing and how rapidly the automakers are changing parts” Al Wilkie, LKQ Best Automotive

“There is a threat from off-shore new parts, so it is up to us to work with our customers to find solutions and keep reman viable”

The good, the bad and the ugly of cores was the lively topic of debate at another panel during MERA’s Sustainable Manufacturing Conference Fall 2019. The experts began their discussion talking about core changes. The consensus was that demand for core for some parts — specifically small parts — is low, while demand for engines and transmissions has not changed. One challenge that remanufacturers are facing is an influx of low-cost, high-quality parts being offered at good prices - and they are becoming competitive with remanufactured parts. Ernie Flurry, president of ACE/MCI Commodities, said: “There is a threat from off-shore new parts, so it is up to us to work with our customers to find solutions and keep reman viable.” However,

Derek McWhorter, president, River City Truck Parts, explained that when the off-shore product comes back as core, there is some question as to whether it is remanufacturable to the required standards. Talk turned to the future, with Flurry saying: “It is not good if we just focus on traditional products.” Bob Grady, president, Rebuilders Automotive Supply, believes advanced electronics will be good for remanufactures: “There are 40-50 computers on any vehicle [that can be remanufactured].” The pace of innovation was also a concern for panel members. According to Al Wilkie, general manager, LKQ Best Automotive: “We are challenged with how rapidly the technology is changing and how rapidly the automakers are

changing parts. Without a large population to draw cores from, the cores become rare. We know what that means - problems with how to economically remanufacture them.” The various pressures on core suppliers are likely to result in some consolidation, believes Justin Greenberg, CEO of DieselCore. “We have already seen some consolidation over the last few years. Core supply is capital intensive - you will see people joining forces and some may go away. The smaller guys will not be able to stay viable.” The future success for core suppliers may well be diversification. “We are getting involved in different areas that we were not involved in before,” Greenberg concluded. “I think there are lots of opportunities out there, we just have to look in the right places.”

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Schneidman wins Cardone accolade Byron Schneidman, partner of RSM US, an audit, tax and consulting firm, was awarded the Michael Cardone Leadership Award, which recognises an individual who demonstrates exceptional leadership in remanufacturing and sustainability. The award is named in honour of Michael Cardone Jr, co-founder of Cardone Industries and founding chairman of MERA. In presenting the award, MERA president John Chalifoux said: “Byron, you are a great partner of

MERA and its members.” Schneidman was a key part of developing MERA’s Accounting & Taxation Principles for Cores in the Remanufacturing Industry. Cardoneaward honourees must demonstrate vision, passion, teamwork and excellence. “Byron recognised the need for all of us to have an accounting report and his passion helped us get the report over the goal line,” Chalifoux said.

Byron Schneidman and John Chalifoux

Amazon: prime opportunity for reman? These days you can buy anything online even remanufactured parts. Ryan Moss, who handles business development for Amazon Renewed, spoke to conference attendees about the platform. According to Moss, Amazon wants Renewed “to be the most trusted store for pre-owned products where customers can easily discover and confidently save on all the brands they love”. He explained that Renewed is a programme for vetted Amazon sellers who have demonstrated high quality

Ryan Moss

and high sales volume along with other criteria. Once the supplier has been vetted, they are allowed to list inventory on standalone product detail pages where discounts are listed. Suppliers must be able to demonstrate that the products have been inspected and tested “to look and work like new and they have to be backed by a minimum 90-day warranty”. Amazon provides marketing support - both internal on its website and external.

Pressure on horizon for US economy

Paul Traub

There is a lot of talk about the strength of the US economy, but there are always pressures on the horizon. Paul Traub, senior business economist for the Federal Reserve Bank of Chicago – Detroit Branch, provided some insight into the story behind the headlines and took a look into the future. “Overall the US economy is moving along fairly well, but consumer confidence has declined,” he told delegates at MERA’s Sustainable Manufacturing Conference Fall 2019. He explained that consumers are getting worried about why their income is not growing and what tariffs are going to do to the economy. “The government is spending more and more, but the tax cuts mean there is less money to spend,” he said. “If this spending level keeps up, by 2029 the budget deficit, as a percentage of GDP

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will be comparable to what it was during World War Two.” Commenting on tariffs, Traub said: “I do not care what anybody is saying regarding tariffs: China is not paying for them and Mexico is not going to pay for them. We are going to pay for them.” This means prices of goods will rise especially for certain product segments like furniture, appliances, auto parts, bedding and floor coverings. “This will trickle into other areas. We are going to have the most tariffs of any developed country in the world.” One of the unintended consequences of a trade war is the slowing of the global economy. “No one is predicting a recession, but they are predicting a slowdown,” Traub concluded.

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Feeling the benefit Maximising business opportunities is the key to success: Dr. Daniel C. F. Koehler, chairman of APRA Europe, explains what APRA Europe – and its members – got out of Rematec 2019 Time flies. Rematec 2019 is already history since more than three months now and Rematec Asia has celebrated its first event. We, as APRA Europe, still feed on this year’s Amsterdam edition of the Rematec show. Not only did we celebrate our 30th anniversary: we also gave our largestever contribution to the show with our renewed booth concept and design, six APRA expert presentations, the first General Assembly of the members of APRA Europe - as well as the Reman Industry Reception as the co-host together with Rematec. It was our intention to get in touch with you - our members and the remanufacturing community - in order to learn about your concerns and expectations regarding future business and, in particular, our association work. As you may have noticed, we are trying to constantly increase member benefits for the sake of your business. In order to facilitate communication, we also set up the nice and green, illuminated column (right) at our booth. It said: “Why remanufacturing is important to me” and we asked you to write down your spontaneous thoughts on the question. This brought joy to all of us and supplied us with many interesting discussions. Of course, we are happy to share with you some of the statements and our comments about reman: • It extends the life cycle of the product and keeps it affordable • It is important for the environment and the quality of used parts • It fits perfectly with the circular economy and reducing climate change • It keeps the environment clean All the statements have two things in common. In the context of remanufacturing, everybody has the clear environmental benefits in mind. This is a great opportunity to promote our

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Daniel Koehler

business in times where politicians and the public increasingly push carbonsaving solutions. Also, you are positive about the business framework as a whole. You are seeking to still extend it which shows us that we are all still on the right track from the business case perspective. Aside from the column, we also distributed an APRA Europe sticker to all our members who were exhibiting at Rematec, which said: “Proud member of APRA Europe”. This allowed us to get very direct feedback from our members. Now, what was APRA Europe really getting out of Rematec 2019? • We have been able to find a considerable number of new members due to our better positioning, which helps us grow our voice and weight • We learned much from our members and the community about our own strengths and weaknesses and will keep on evolving on this basis • We held our General Assembly at Rematec and will keep on doing so because it is a central meeting point for the community and avoids additional travel times, cost and emissions for a separate place The bottom line is that we believe Rematec 2019 was a full success for the association and in terms of benefits for our members. In this spirit, let us keep on growing the remanufacturing community. APRA and Rematec will be the facilitators.

APRA European Symposium 2020 Remember to save the date for the APRA European Symposium 2020 in Prague (24-27 March 2020). Registration will open soon. For more information email europe@apra.org

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Engine damage: a possible opportunity Engines don’t like being badly treated – and this is something of a headache for warranty holders. Maybe reman might be able to help, suggests Volker Schittenhelm Germany-based CarGarantie has been an international specialist warranty company for more than 40 years. It has framework agreements with more than 30 car manufacturers and importers’ associations as well as special offerings for the independent aftermarket. Its latest publication shows the share of cost-intensive engine breakdowns increased from 8.8% of total volume of all regulated component breakdowns in 2013 - to 11.2% in 2017. Trends such as cost pressure for manufacturers, increased electronics, engine downsizing and increased use of turbochargers have an impact. Today’s engines are highly sophisticated and don’t take kindly to things like drivers’ tendencies to lengthen service intervals, poor driving behaviour and use of lowquality oils. Looking at the cost segments for

CarGarantie (see chart), engine damage/ failure is - as expected – leading with 24.2%, followed by the fuel system (17.7%) and transmission (11.7%). The average repair cost per damage case is calculated at €514 (previous year €502), the highest growth for years. FIRM sees an opportunity in this development. CarGarantie’s recommendation is a “repair cost insurance” for the driver or car owner.

And as that car insurance company will certainly be open to solutions in order to reduce expenses for engine repair, it is the right moment to get in contact - as a national engine reman association - to evaluate framework agreements, for example, and to offer the high-qualified engine reman competence of each individual member. Make something out of it – CarGarantie works in 19 countries! www.cargarantie.com

Share of total regulation cost

Source: CarGarantie

24.2%

Engine

17.7%

Fuel system (incl. turbocharger)

11.7%

Transmission 0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

WERC back on track

Omar Chehayeb: new vice president of WERC Formed in London in 2007 with the contribution of FIRM, the World Engine Remanufacturers’ Council (WERC) had lost momentum over the years until the various country bodies reestablished contact at 2018’s edition of Automechanika Frankfurt. In that meeting, representatives from a dozen countries revived WERC with the

election of president Mac Nicol (South Africa), vice president Omar Chehayeb (Brazil) and secretary Attie Serfontain (South Africa). “The re-establishment of WERC is significant,” says Nicol. “It allows our industry to share global best practices and gives the engine remanufacturer sector a unified voice in trade and industry matters. The purpose of WERC is to create a world alliance of independent engine rebuilders in search of excellence in their work, better profitability and greater awareness of the new trends that disruptive technology is bringing into the engine rebuilding business.” Engine reman associations from Europe (FIRM), US (AERA), Brazil (Conarem) and South Africa (ERA) - as well as some independent engine reman companies from Russia and Argentina - were present at the WERC meeting

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during Automechanika Johannesburg in September this year. A WERC Committee was elected: Clemens Ortgies and Emre Cicin (FIRM), Bob Monroe (AERA), Attie Serfontain and Mac Nicol (ERA), Omar Chehayeb (Conarem), Dimitriy Dmitriev (Russia) and Jose Arnaldo (Argentina). The next steps will be: 1. Formalise a constitution. 2. Establish communication channels through internet and other social media. 3. Open account for incoming fees and expenses in Germany. 4. Present WERC as a ‘world organisation’ at international remanrelated exhibitions. 5. Acquire more engine reman associations in other continents like Asia, Australia and South America. 6. Define further actions and work plan.

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