In this interview Andreas Jörg, responsible for Remanufacturing and Value Parts & Services at Daimler AG, explains what remanufacturing is all about. He particularly emphasizes the contribution that the remanufacturing of parts makes to the conservation of resources.
Mr. Jörg, what is "remanufacturing" all about?
Remanufacturing for us means to recondition used Mercedes-Benz genuine parts from all three divisions, i.e. passenger cars, vans and trucks, in such a way that they correspond to a new part with regard to their function, safety and quality. We ensure this by reconditioning the parts according to series production standards. The remanufacturing process conserves resources and is highly efficient. It makes a valuable contribution to the sustainability of our business model. Remanufacturing not only makes it possible to reduce costs, it also requires less energy and fewer raw materials compared with producing new parts. It makes a contribution to a positive eco-balance.
How many parts can you currently remanufacture, and what are they?
At this time, we have around 20,000 parts on offer that focus mainly on the powertrain: engine, transmission, clutch, propeller shaft, moving parts such as starters, but also electronic components such as engine control units.
Can you tell us more about the contribution remanufacturing makes to our sustainable business strategy?
I will be glad to. If you look at the total operating life of a vehicle, it goes through different phases in its lifecycle. We in After-Sales play an important role in the active use phase of our vehicles: by reprocessing and reusing materials, we make our contribution to an environmentally friendly lifecycle. Our aim is to avoid waste and the unnecessary consumption of raw materials and energy wherever possible. This is why we carry parts such as engines and transmissions over into a second lifecycle. In the future this will also be an important aspect for HV batteries. The more we succeed in reusing components, the fewer resources we will consume during the entire process. The independent testing organization TÜV Süd has measured this and has published a lifecycle assessment study. For example, the reconditioning of a single remanufactured G281 truck transmission saves 445 kg of carbon dioxide and 7300 megajoules of energy compared with production of a new unit. In other words: eleven trees would take ten years to convert the CO2 saved by remanufacturing.
Just how does the process with the remanufactured parts work from the customer's perspective?
For example: when your Mercedes-Benz needs a repair, you buy a remanufactured transmission rather than a new one. The part price has two components: one part for the remanufactured transmission and a smaller part as a deposit. If you return the old, used part to us, the deposit is refunded to you. The deposit is a financial incentive for the customer, as we have to make sure that the old parts are returned to us for remanufacturing. The remanufacturing system is a closed circuit. A remanufactured part combines the aspect of sustainability with an attractive price and high quality. This is also well received by our customers.
What is the Core Consolidation Center (CCC)? What role does it play in the remanufacturing process?
The Core Consolidation Center (CCC) in Offenbach is the central hub for all cores, i.e. old parts. Via our After-Sales logistics, we receive parts that customers have used and returned from our dealers all over the world. The exception is China, where the remanufacturing parts are reconditioned locally and do not go through our CCC. In the CCC the cores are received, stored and shipped to the respective reconditioning locations. Once the cores have been reconditioned, they are dispatched via the Global Logistics Center in Germersheim just like all other Mercedes-Benz, smart and FUSO replacement parts.
Our used parts center (GTC) near Stuttgart rounds off the system. In this way we cater for the entire bandwidth of customer needs and the entire vehicle lifecycle.
How is it decided which part will be reconditioned and which not?
Specially trained professionals examine each individual part and decide whether it can be used or not. Excluded from this inspection are all wear parts, such as seals, which are always replaced because they are not suitable for disassembly and reassembly.
Can every part have a "second life"?
Depending on the product, the proportion of parts that can be remanufactured is between ten and 100 percent. Our engineers and planners constantly develop new processes to optimize the reprocessing of parts, and above all also to add parts to the remanufacturing portfolio that we were previously unable to reprocess. The more we succeed in reusing components, the less energy and resources we will consume during the entire process. Our priority is therefore a high remanufacturing quota. To achieve this, it is important for us to be involved in the early development phases of a vehicle so that our requirements are taken into account. Designing a new part so that it can be remanufactured is easier than subsequently adapting a finished product.
How important is the Chinese market for remanufacturing?
Owing to the size of the vehicle fleet and growing local awareness of sustainability aspects, China is an important market for us. The Chinese government is increasingly dealing with issues of resource conservation and environmental protection, and has given high priority to remanufacturing in its strategy "Made in China 2025". In 2016, implementation of this strategy was given a focus in the five-year plan. This gave us the ideal conditions in which to address the subject, and in October 2018 we opened our remanufacturing plant near Shanghai. The Mercedes-Benz Parts Manufacturing (MBPM) plant is currently in the ramp-up phase. The location will produce a similar portfolio to our portfolio in Germany, bundled in a single location.
How is the business with high-voltage batteries developing?
Our parts offering always develops in parallel with the new parts. For our customers with electric vehicles, we likewise make every effort to offer the corresponding remanufactured components in addition to new ones. With the HV batteries and related components we already have around 140 different parts in our portfolio. There is certainly a demand, and this is set to increase greatly in view of the e-mobility initiative, therefore we will continue to expand our range of remanufactured HV batteries in the future. We want to co-design the change process towards electric mobility with our remanufacturing products. With regard to the worldwide availability of raw materials, it is important to ensure that we use each raw material with maximum sustainability. This applies in particular to HV batteries as a valuable and expensive component of an electric vehicle.
Where can we become even better and where are we already good?
I believe that we are competitive in terms of offering, price and performance with the remanufacturing products we currently have on the market. We can get better at communication. Many customers know very little about the various options for replacement parts, and their advantages and disadvantages. But this is precisely what counts when they need to make a decision. When a customer has to decide what part is to be installed in the vehicle during a service or repair, the market offers a choice between a Mercedes-Benz GenuinePart, a remanufactured Mercedes-Benz GenuinePart and a competitor part. The selection can be large and confusing at times.
In closing, what is important to you?
Our goal is to always have the ability to offer our customers a Mercedes-Benz replacement part that meets their expectations of quality, function, safety and price. If our remanufactured parts can contribute to a more sustainable vehicle lifecycle and the conservation of resources, this is a good result for us and above all for the environment.