Good for Customers, Good for Business, Good for the Environment

Greg Folley, Caterpillar Vice President with responsibility for the Remanufacturing & Components Division, discusses remanufacturing and its sustainable benefits.

Recently I had the honor of being in Singapore for the grand opening of Caterpillar's new remanufacturing facility there. The event got me thinking about sustainability as it relates to our business. I'm still relatively new to remanufacturing - I joined the Remanufacturing & Components Division at the end of 2010 - but I'm still amazed by the remanufacturing process, technology and benefits.

Remanufacturing is the process of returning end-of-life products to the same condition as when that product was originally manufactured, in a manufacturing environment. Products are returned to "same-as-when-new" condition and updated to the latest engineering specifications. Thinking about the sustainability of remanufacturing, the first thing that comes to mind is environmental sustainability. Through remanufacturing, Caterpillar makes one of the greatest contributions to sustainable development - keeping nonrenewable resources in circulation for multiple lifetimes.

Here are some facts about our sustainable benefits:

• Cat Reman recycles an average of more than 148 million pounds of end-of-life iron annually.
• In 2011, Cat Reman took back 2.2 million units of end-of-life material.
• The process of remanufacturing requires 85 to 95 percent less energy and material than manufacturing the same, new component.
• Because we're in the business of returning end-of-life components to same-as-new condition, we reduce waste and minimize the need for raw material to produce new parts.

The nature of our business in Reman is sustainable, but we're also building sustainability into our operations. Our new facility in Singapore has been built with sustainability in mind. The facility has a number of "green features" that will make an environmental impact. This includes things like:

• Insulated metal cladding for the facade and roof
• Environmentally-friendly construction and office products (utilizing recycled material)
• Energy efficient lighting
• Rainwater drainage systems
• A rainwater harvesting tank
• The ability to use recycled water for the remanufacturing process, irrigation and flushing

In recognition of these features, our facility received the "Green Mark Gold Plus" award from the Singapore Building Construction Authority. This award is heavily focused on the environmentally sustainable aspects of the facility. Green Mark Gold Plus requires a 25-percent reduction in energy consumption that has been achieved by the building design, materials used and equipment efficiency. 

I also think of remanufacturing as being financially sustainable - for Caterpillar, for our dealers and for our customers. Reman's model is an exchange business. We charge customers a fraction of the new price for a Reman product, plus we charge a deposit. When they return their old, worn out products, we refund their deposit. This gives us a supply of raw material, and allows us to essentially recycle components that otherwise would have ended up in a landfill. From the customer's perspective, Cat Remanufactured parts and components provide same-as-new performance and reliability at fraction-of-new costs, and over-the-counter availability gives them more options at repair and overhaul time. The results are maximum productivity and lower costs.

You can also see the financial sustainability in how we work with our Cat dealers. Cat Reman needs to better understand how dealers plan to utilize Reman major components as part of their overall component support strategies for their customers. One of the primary ways we facilitate this planning effort is to regularly meet with the key dealers and jointly develop strategies that help customers keep their equipment running at the lowest possible cost. We call these efforts to improve communications with the dealers "Active Partnership" projects, and they have already proved successful in planning for increased levels of demand with some of our key dealers in Asia.

As a new facility, our Singapore location was purpose-built and embodies the spirit of our remanufacturing business. The future of Cat Reman is bright, and I'm looking forward to continuing to grow our remanufacturing capacity and capabilities to provide benefits for our customers, our business and the environment.