Positives of remanufacturing in India discussed

June 24, 2016

An article by Subrata Mitra, Professor of Operations Management at IIM-Calcutta, wondered whether “there [is] a strong case for remanufacturing” in the country.

Hindu Business Line hosted Mitra’s article, in which he questioned whether “the debate on whether Apple should or should not sell its refurbished phones in India has captured the attention of many”, asking whether there is a “strong case” for remanufacturing there. Noting that “product recovery for reuse after its useful life or end of life is an important phenomenon”, he adds that remanufacturing has “attracted the attention of both business and academia in recent times”.

Usually, landfilling has dominated, but with areas for landfill “gradually shrinking”, and with incineration and non-biodegradable waste causing “serious and irreversible environmental damages”, developed nations have made manufacturers “responsible for collection, recovery and/or safe disposal of their products”.

Mitra points out that legislation binds manufacturers in some cases to “redesign their products taking their entire life-cycles into consideration”, with “more biodegradable and/or recyclable components” used. More recovery reduces “resource and energy consumption” as well as a reduction in greenhouse gases, while he also notes that it “may prove to be beneficial for manufacturers from the financial perspective”.

This is because they should “endeavour to recover the economic value as much as possible from used products”, with consumer attitudes and awareness “gradually changing”. Remanufacturing is one of six recovery options, alongside reuse, repair, refurbishing, cannibalisation and recycling, and offers “feel-good factors” alongside the “40 to 60 percent” cost benefit over a new product, as well as the warranty offered by many remanufacturers, which he calls a “significant value proposition”.

Boosting remanufacturing in India would “not only make a positive impact on the environment in terms of material and energy consumption […] but also contribute to the national income and generate employment”. He believes the concept is “new to India”, alongside product recovery “in general”, because “definitions are not very clear”, and remanufacturing “is still not formally recognised”, while awareness “is very low” among consumers.

Additionally, until recently a “high non-tariff barrier to the import of remanufactured goods was imposed”, as they were seen as “dumping second-hand/used goods”. Importing them was seen as having “impacts” on the environment and economy, but WTO talks on “opening up the markets in developing countries for remanufactured goods” are reportedly happening, while the Indian government allowed remanufactured imports under product age and life restrictions.

He concludes that remanufacturing “presents immense potential for Indian industries and government” because of its “cost-effective solutions”, employment opportunities and environmental advantages, alongside research and business opportunities and “increased reverse logistics activities” in terms of core collections. He believes it “is just a matter of time” before the government “realises the economic, social and environmental benefits” and “formulates policies and regulations to facilitate its growth”.

Categories : Around the Industry

Tags : Environment India Remanufacturing