Enduring Goodness: Durable Goods as Ambassadors of a Regenerative Economy

Title_Back_ImageConsumer durable goods like electronic products and home appliances have been technological innovations that have played a significant role in easing and improving the quality of human life. Whether it’s the ease of having clean clothes at the push of a button or listening to our favourite music from across the ages, these testaments to human ingenuity have shaped modern life and allowed us new pursuits by freeing up time, as well as the ability to enjoy life’s many pleasures in the comfort of our homes.

The convenience these products have created, however, has come at some cost, in relation to how we have utilized the gifts nature has endowed us with (in the form of materials, minerals, and energy) and how we have dishonoured these gifts by literally letting them go to waste. While many of us have enjoyed the fruits of these innovations, countless others have suffered in extracting raw materials (conflict minerals) and countless others continue to suffer in the handling of the so-called wastes.

Conflict minerals, as defined by US legislation, currently include the metals tantalum, tin, tungsten and gold, collectively known as 3TG and are used in consumer electronic products like cell phones. The internationally recognized ‘OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas’, has a broader scope and covers all minerals, not just 3TG.  A study published in the Academy of Management and summarized in the Harvard Business Review analyzed every conflict minerals report submitted to the Securities and Exchange Commission (SEC) in the US in 2014, 2015, and 2016. The conclusion: 80% of the companies admitted that they were unable to determine their raw materials’ country of origin. While this is startling, it is also unsurprising given the complexity and layers inherent in global supply chains.

e-waste example
An example of e-waste
This Photo by Unknown Author is licensed under CC BY-SA-NC.

When these products reach the end of their lives or are discarded for newer products, they are categorized as electronic waste or e-waste. The Global E-waste Monitor 2017 report defines e-waste as:

“[A]ll items of electrical and electronic equipment (EEE) and its parts that have been discarded by its owner as waste without the intent of re-use. E-waste is also referred to as WEEE (Waste Electrical and Electronic Equipment), electronic waste or e-scrap in different regions and under different circumstances in the world. It includes a wide range of products – almost any household or business item with circuitry or electrical components with power or battery supply”.

The report defines six e-waste categories:

  1. Temperature exchange equipment, more commonly referred to as cooling and freezing equipment. Typical equipment includes refrigerators, freezers, air conditioners, heat pumps.
  1. Screens, monitors. Typical equipment includes televisions, monitors, laptops, notebooks, and tablets.
  1. Lamps. Typical equipment includes fluorescent lamps, high intensity discharge lamps, and LED lamps.
  1. Large equipment. Typical equipment includes washing machines, clothes dryers, dish-washing machines, electric stoves, large printing machines, copying equipment, and photovoltaic panels.
  1. Small equipment. Typical equipment includes vacuum cleaners, microwaves, ventilation equipment, toasters, electric kettles, electric shavers, scales, calculators, radio sets, video cameras, electrical and electronic toys, small electrical and electronic tools, small medical devices, small monitoring and control instruments.
  1. Small IT and telecommunication equipment. Typical equipment includes mobile phones, Global Positioning Systems (GPS), pocket calculators, routers, personal computers, printers, telephones.

The report concluded that the world generated 44.7 million metric tonnes (Mt), or an equivalent of 6.1 kilogram per inhabitant (kg/inh), of e-waste annually in 2016. This is about the same as 4,500 Eiffel Towers each year. The amount of e-waste is expected to reach 52.2 million metric tonnes, or 6.8 kg/inh, by 2021.

According to The Energy and Resources Institute, India ranks fifth in the world amongst the top e-waste producing countries after the USA, China, Japan, and Germany, and recycles less than 2% of the total e-waste it produces annually. As of 2018, India generated more than 2 million tonnes of e-waste annually and imported large quantities of e-waste. The collection, transportation and processing of e-waste is dominated by the informal sector which is well networked and unregulated. Seelampur in Delhi is the largest e-waste dismantling centre of India. Adults as well as children spend 8–10 hours daily extracting reusable components and precious metals like copper, gold and various functional parts from the devices, in what are likely to be highly questionable health and safety conditions.

Solving this crisis with urgency is going to require will, innovation and collaboration. And it is unlikely that there is a silver bullet. All stakeholders (e.g. the private sector, government, consumers, investors, communities) have a role to play in developing a combination of solutions. One possible solution is to remanufacture these products and a company is already doing so, successfully and profitably.

With its global headquarters in Carol Stream just outside Chicago, Illinois, CoreCentric Solutions (CoreCentric) is a privately held global company that is in the business of recovering, repairing, remanufacturing and selling back to the market, appliances, appliance parts and consumer goods.

CoreCentric Solutions’ Global Headquarters in Carol Stream, Illinois
Image courtesy of CoreCentric and used with permission

Remanufacturing, as defined by American National Standards Institute (ANSI) approved standard developed by the Remanufacturing Industries Council (RIC):

“[I]s a comprehensive and rigorous industrial process by which a previously sold, leased, used, worn, or non-functional product or part is returned to a “like-new” or “better-than-new” condition, from both a quality and performance perspective, through a controlled, reproducible and sustainable process.”

CoreCentric has been in this business for nearly 25 years and its primary customer groups are original equipment manufacturers (OEMs), service technicians and parts wholesalers. While the company serves the US market, their Global Engineering Center is in Pune, India  I had the good fortune of connecting with Tom Healy (CEO of CoreCentric) and Rajiv Doshi (Managing Director of the Global Engineering Center) to learn more about CoreCentric’s business and its India operations. Our conversation broadly discussed remanufacturing, its role in creating a regenerative economy as well as its potential in India. Below are some of the highlights of our exchange.

Could you tell us about CoreCentric’s activities broadly and the work you’re doing at the Global Engineering Center in Pune, India?

Since 1995, CoreCentric has been a leader in the repair, remanufacture and product returns industry. We provide inventive, custom remanufacturing solutions to the world’s largest OEMs – as well as exceptional service to appliance parts wholesalers, appliance service technicians and DIY consumers.   The Global Engineering Center was established 10 years ago in Pune to provide R&D and reverse engineering services that constitute an integral part in supporting the remanufacturing work undertaken at our headquarters in Carol Stream, Illinois, in the US.

What recent sustainability impacts and/or success stories could you share that CoreCentric and its customers have been able to achieve through remanufacturing?

During 2019, CoreCentric was able to capture and remanufacture in excess of 2 million control boards, ice makers and other appliance components that otherwise would have gone to landfills.  Within our Product Returns business, we received and processed over 1 million consumer appliances that also would have likely gone to a landfill.  Within our Return for Repair business we repaired close to 100,000 control boards that saved the appliance it came from having to be replaced.  Our US operations operate on 100% renewable energy and recycled over 4,000 tons of material.

A CoreCentric Engineer at the Global Engineering Center in Pune testing all the I/Os (inputs and outputs) of a refrigerator control board
Image courtesy of CoreCentric and used with permission

A recent success story of a CoreCentric client involves increasing their recovery rates for returned merchandise.  Prior to partnering with CoreCentric this OEM was able to capture only 30% of their total returns and return them to market.  Within six months of partnering with CoreCentric we were able to increase the recovery of returned merchandise to 70%, thus providing a substantial cost savings and positive environmental impact.

Broadly speaking (i.e. not specific to India), what are some of the main misconceptions or myths CoreCentric has seen in relation to the perception of remanufactured products? What strategies have you employed to address them?

In general, there is a lack of awareness about the remanufacturing industry and the value of the products and services it provides.  Often during the purchasing decision, a consumer is not even offered the opportunity to consider a remanufactured vs. new version.  The operational and quality standards that companies like CoreCentric operate within bring a level of credibility and confidence to the end purchaser.  All our products are 100% fully functionally tested prior to shipment and come with a warranty.

We actively promote our facility, processes and quality certifications on our website and online storefronts.  We are also very active in industry associations such as the RIC to promote the remanufacturing industry.

CoreCentric’s warehouse in Carol Stream that houses inventories of products received for remanufacturing as well as remanufactured products ready for shipping/sale
Image courtesy of CoreCentric and used with permission.

Do you see remanufacturing positively influencing current and/or future product design so that remanufacturability, product disassembly and material recovery are factored into design criteria? Could you give us an example that has emerged out of CoreCentric’s work?

Designing products or components to be remanufacturable happens in some cases, but not always. For example, the “potting” (a process of filling electronic assemblies with a solid or gelatinous compound for resistance to shock and vibration, etc.) of electronic circuit boards by the OEMs has made the remanufacturing of these boards virtually impossible. On the other hand, we are currently working with several small kitchen appliance manufactures to integrate remanufacturing into new product design to allow for higher future recovery rates.

Are there any downsides to remanufacturing?

To provide a simple answer: no downsides at all. It is important to stress that a remanufactured part is a used OEM part that has been disassembled, cleaned and has had some of its worn components replaced and NOT just refurbished or reconditioned. A remanufactured part may not appear “brand new” but is equal and sometimes better in quality, reliability and robustness to a new product.

Apart from significantly reducing the exploitation of precious and ever-depleting raw materials required to build new parts, thereby also reducing the carbon footprint, remanufacturing also supports sustainability by creating a supply chain for aging parts and manages obsolescence by extending the life of existing appliances / vehicles and as a result reducing the need for new ones to be built.

The CoreCentric Team at the Global Engineering Center in Pune, India Image courtesy of CoreCentric and used with permission

Does CoreCentric serve the Indian market? If yes, which products and if not, what are the main barriers and/or challenges?

CoreCentric does not serve the Indian market currently. The main barrier is the highly fragmented or disorganised sector of retailers and servicers that does not guarantee or facilitate the “reverse collection” of “core” (discarded parts/products) in substantial and sustainable volumes that form the lifeline of our business. Without an organised process for disposal and collection, there can be no parts to remanufacture. Another challenge that we need to surmount is more cultural in nature: we have rapidly rising numbers of young urban first-time buyers of white-good home appliances who do not yet understand “used, but as good as or better-than-new”.

What role do you see remanufacturing playing in transforming the global economy to one that is regenerative and circular in nature?

At its very core, the circular economy is about designing out waste and pollution by keeping products and materials in use.  Remanufacturing, which is CoreCentric’s central mission is focused on extending the life of appliances and other consumers products.  This in and of itself prevents these items from going to landfills and eliminates the environmental impact of the new production that would have occurred to replace that failed product or part.

One of the eight principles of a regenerative economy is maintaining robust circulatory flows of money, information, resources, and goods and services (Principle 7: Robust Circulatory Flow). The principle goes on to explain that:

“The circulation of money and information and the efficient use and reuse of materials are particularly critical to individuals, businesses, and economies reaching their regenerative potential”.

Remanufacturing is certainly one piece of that grander and elegant puzzle.

Consumer goods are also called durable goods. It is worth envisioning what kind of economy and society we could co-create if these goods were in fact enduring ambassadors of good in the world. Not just a means to an end, but an embodiment of masterful design that:

  • Honors the materials that have been harvested and used
  • Carries with it an awareness of where and from whom the materials came
  • Is conscious of where the materials are going

It is up to us, through our choices, to reclaim ‘value’ as a word that means more than an abstract monetary metric and demonstrates a feeling of reverence, respect and care for the gift of abundant natural resources, our fellow beings and the enduring goodness of our beautiful planet.

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