Remanufacture is a sought after destination on the sustainability map right now. As talk of a circular economy continues to ignite and excite, many manufacturers are twirling their compasses in that direction as a fast-track route to material optimisation.
Recently I had the fortune to talk in-depth to two leading brands who are both grappling with this new shift towards remakery. It was remarkable how they both flagged up the same issue independently of each other – a theme backed up by conversations I have had with other environmental practitioners over the past six months or so.
The theme is – and it’s an emerging one – that in order to get enough old materials back to make into new, you need to make global product takeback schemes pay. Right now, the economics don’t stack up because there either aren’t enough return and recycling schemes in place, or not enough product is flowing through those schemes.
This matter is further compounded by the fact that even if a manufacturer could reap enough product volume through such a scheme and stump up the cash needed to extract the necessary materials to put back into its supply chain, it more than likely won’t be able to pass that cost onto the customer.
It’s a painful fact, but research keeps showing that customers – particularly individual consumers – aren’t yet willing to pay a premium to have goods or services supplied with sustainability built in. So if businesses want to ‘do the right thing’ (and they keep saying that they do), then they must be prepared to suck up the risk of remanufacture being a loss leader.
At what point might such a strategy begin to pay off, do I hear you ask? Well, that’s a tough one to answer. Again, we must keep referring back to product and material flows – these flows need to be plentiful and continuous; steady volumes will help stabilise supply and thus boost confidence in the right type of reprocessing investment.
To get these flows circling however, requires more collection networks to be built. Not just at the kerbside, through the postal system or drop off recycling hubs, but at the point of purchase. I would argue that any trade-in or upgrade should come with a consumer-producer agreement attached so that everyone takes accountability to ensure that end-of-life products have a point of economic re-entry.
One CSO I spoke to last week had a beautiful phase for it and I couldn’t put it any better: “We need to move away from product lifetime warranties, to product afterlife warranties”. Let’s hope what lies inbetween won’t prove too much of a deathtrap.