Paul D’Adamo (the ‘Recall Guy’) based in the US, provides his opinion on why auto dismantlers and remanufacturers need to build a good relationship.
Have You Heard?
There is a move afoot to re-brand the traditional 3 Rs of Recycling: Reduce, Reuse, Recycle. The goal is to add another R for Reman, representing the idea of ‘sustainable manufacturing’, better known as remanufacturing.
For Auto Dismantlers, the concept of remanufacturing may not be top of mind. Still, I believe our long-term interests would best be served with a broader knowledge of how our supply chain to the remanufacturers can be of mutual benefit. A symbiotic relationship means there is cooperation between two persons or groups, where both parties benefit. The more we understand the other’s needs, the more we can profit from it.
MERA – The Association for Sustainable Manufacturing seeks to promote better synergies among manufacturers, suppliers, universities, and professional services firms. Its mission is to promote the economic, environmental, and product performance benefits of remanufacturing and similar forms of sustainable manufacturing.
Existing associations like ARA (Automotive Recyclers Association), ISRI (Institute of Scrap Recycling Industries), and MERA must initiate dialogue about our mutual interests. The fact is, we need each other to survive market challenges.
My ‘Old School’ Perspective as an Automotive Dismantler
From the first day I started in the auto dismantling business, I was made aware of ‘cores’ as something to collect from our customers and something that would return a value beyond the actual sale of the product. Its value would potentially exceed the scrap value after the hulk was shredded. The primary objective was to extract maximum value from our vehicles. Sounds like a win-win for auto dismantlers and remanufacturers. It was a very linear process, and at that time, there were no computerized systems for logging in the cores. You put them in a box and waited for the local ‘core guy’ to buy them at market pricing, with very little thought of their life cycle. In 2021, that system and thought process are antiquated.
Welcome to the future where global discussions about resources and the environment have prioritized sustainability and the circular economy, which is defined as an economy “where the value of products, materials, and resources is maintained in the economy for as long as possible, and the generation of waste is minimized.”
What is Remanufacturing?
According to MERA and five other trade associations around the world, “Remanufacturing is a standardized industrial process by which [previously sold, worn or non-functional products] are returned to same-as-new, or better, condition and performance. The process is in line with specific technical specifications, including engineering, quality, and testing standards. The process yields fully warranted products.”
The relationship between auto dismantlers and remanufacturers extends beyond us simply supplying quality cores. Caterpillar takes it a step further and states, “our machines are built to be rebuilt.” If you have ever had to purchase a ‘reman’ part for your loader, you know the importance of the core. As business owners, we benefit from a lower cost of parts to keep our machinery and operations at peak performance.
Motor Vehicle Parts as an Ecosystem
Globally, it is estimated that there are 1.2 billion motor vehicles. Any given vehicle has approximately 30,000 parts (right down to every nut and bolt). Whether we are talking about industries like aerospace, heavy-duty and off-road equipment, motor vehicle parts, restaurant equipment, or retreaded tires, one aspect is critical: core collection. Shortages in supplies of core products is one reason customers decide to opt-out of the sustainable business model and buy new.
Professional Auto Dismantlers play a critical role in the ‘core collection’ process to ensure an adequate supply of quality automotive cores to remanufacturers. Core collectors like RAS (Rebuilders Automotive Supply) provide technology solutions to collect, catalog (identification, part verification, freight-in, tagging) and store cores, and fulfill orders from remanufacturers. Quality is an ongoing concern as many dismantlers see cores as a by-product of the scrap process and not worthy of a final QC check for quality and proper part number match before invoicing their order. QC checks and exact part number identification are two of the primary reasons why dismantlers do not receive 100% payment on their orders. I often use the phrase, “Cores are not junk; cores are merchandise.” Savvy operators make a lot of money from their cores. Let’s use our combined resources to spread the word about this incredible opportunity.
It makes sense for our associations to initiate partnerships with each other to strengthen the supply chain. Automotive parts are typically in the top five goods remanufactured in the world. We can’t take that for granted. Cheap knock-off parts will continue to chip away at the ecosystem for quality OE cores being used in the remanufacturing process.
According to an article by Si2 Partners, “Today, remanufacturing represents perhaps the largest untapped resource for productivity improvement in American industry.” This is a winning combination for all parties. Imagine strengthening our industrial base with high-paying jobs, conserving resources by keeping valuable resources in the economy as long as possible, providing positive cash flow on vehicle inventory, and minimizing the generation of waste.
Adding Reman as the 4th R is not only appropriate, it is necessary.
The author is Paul D’Adamo – Recall Yard Manager at Rebuilders Automotive Supply, a major core supplier to global remanufacturers. He can be reached at firstname.lastname@example.org