Refurbishment of production facilities: Implementation of Circular Economy approaches in discrete manufacturing production resources.

Refurbishment of production facilities: Implementation of Circular Economy approaches in discrete manufacturing production resources.

Given that the lifespan of products for end consumers is significantly shorter than that of production facilities and factory buildings, manufacturing companies face the question of what happens to the existing production infrastructure after discontinuation of a product.

As highlighted in our Insight, "Sustainable Factory Buildings: A Step towards the Green Economy" companies can significantly enhance the environmental friendliness of their production on a macro level through new technologies and green approaches. Apart from this overarching perspective, companies engaged in discrete manufacturing can also employ sustainable goals within their production tools and facilities.

There are various ways to make production facilities more environmentally friendly. Apart from improved control processes to enhance efficiency, energy savings through new technologies, or avoiding the use of environmentally harmful substances in production, considering the end-of-life of equipment and implementing Circular Economy approaches is another crucial lever. In recent years, there has been a rise in the concept of Refurbished Tech, specifically in the consumer electronics sector, giving products a second chance after their initial life cycle and making the ReCommerce business model lucrative.

Similar opportunities arise in discrete manufacturing. Given that the lifespan of products for end consumers is significantly shorter than that of production facilities and factory buildings, manufacturing companies face the question of what happens to the existing production infrastructure after discontinuation of a product. Rarely do factory buildings get demolished and rebuilt after just one product life cycle; rather, they are optimally reused—a perspective applicable to production facilities falling under the Circular Economy concept. In a circular economy, there are numerous possibilities for what can happen after a product reaches the end of its first life cycle. Refurbishment is one such possibility for plant technology.

What is Refurbishment?

Refurbishment involves the quality-assured overhaul and repair of products for the purpose of reuse and further use. In the production realm, Refurbishment allows the integration of new technology into existing plant infrastructures and the replacement of damaged/worn parts to ensure continued flawless operation of production tools and facilities. Refurbishment, therefore, supports sustainability by reducing waste and preserving primary resources.

How does it differ from other Circular Economy approaches?

Within the Circular Economy, the 5-R approaches for a sustainable world exist. The most widely recognized idea is Reduce, aiming to avoid or decrease the consumption of raw materials before or during the product creation phase. In consideration with end-of-life of products, alongside Renew—where Refurbishment falls—four additional courses of action have been established: 

  • Reuse: Elements are reused for the same purpose without undergoing quality assurance measures.
  • Repair: Defective elements are repaired.
  • Renew (divided into Refurbishment and Remanufacturing): Remanufacturing involves bringing elements back to the quality standard of a new element.
  • Recycle: Raw materials classified as waste are processed into secondary raw materials.

What are the practical advantages and disadvantages?

The central advantage of refurbishment lies in offering companies the opportunity to optimize existing production resources, gaining significant competitive advantages through overhauling and restoring existing facilities.

An essential aspect of refurbishment within the ongoing production process is the potential reduction in energy efficiency of older facilities, which can be mitigated by employing modern technologies or optimization measures. This results in cost savings that can eventually amortize the initial investments. Furthermore, it leads to a lasting reduction in the company's carbon footprint and measurably improves the overall environmental impact.

Another ecological benefit is the reduction in material consumption across the industry. The production of new manufacturing facilities requires vast amounts of resources such as metals, plastics, and other materials. Reusing and refurbishing existing facilities help conserve natural resources and reduce waste. Additionally, companies can save costs compared to purchasing new production technologies.

Another significant point is that the refurbishment process enhances the flexibility and adaptability of production facilities. By integrating modern control and automation systems, companies can enhance process efficiency, carry out optimization measures, and respond better to changing requirements. This facilitates better utilization of existing capacities and faster market introduction or adaptation to new products.

Besides these advantages, refurbishing production facilities necessitates careful planning and evaluation. It's crucial to assess the condition of existing facilities to determine whether modernization is technically and economically viable. Comparisons should be made against the costs of acquiring new facilities to ascertain whether refurbishment costs, along with increased maintenance, do not surpass the acquisition costs over the second lifecycle. Additionally, the use of new technology and more flexibility due to fewer constraints enable companies to adjust their production strategy to meet evolving requirements. Moreover, potential temporal and performance-related risks and challenges must be considered to ensure a smooth transition and continuous operation of production.

Practical relevance: What are the possible applications for refurbished system technology?

Depending on the extent of refurbishment and the requirements for the production tools, the refurbished plant technology can be utilized for various purposes. The most direct option is extending the operational lifespan during prolonged production of the base product or a similar successor. This often requires minimal changes to the plant technology, thereby reducing planning, lead times, and initial start-up periods.

If minimal downtime and high system performance are required, there's also the possibility of using refurbished components in production lines with lower output but high resilience, or integrating them as fallback solutions into existing bottlenecks. In such cases, the majority of the production output and safety rely on new plant technology, while the refurbished components secure and support critical areas.

Furthermore, in recent years, a market for refurbished plant technology has emerged. Companies can operate in roles such as buyers/sellers or dealers/service providers. This presents the opportunity to sell equipment for residual value, reducing overall production costs. Additionally, it enables small and medium-sized enterprises to incorporate technology into their production that would be cost-prohibitive to purchase anew. Many prominent industrial robot manufacturers offer this extensively.

Industrial robots serve as a prime example of refurbishment. The most significant wear occurs in their drives/gears and at the end effector. Consequently, these components can be selectively replaced, allowing the remaining robot structure to have a considerably extended lifespan and be operated for an extended period. Furthermore, the high flexibility of industrial robots enables their extensive use in various functions. Cost-effective and efficient implementation of retrofitting activities can typically be achieved through the smooth replacement of the end effector and robot control.

How can we support you with sustainability and refurbishment?

Our aim at Munich Consulting Group is to approach factory and process planning comprehensively. Hence, our planning doesn't conclude solely with system utilization; it extends beyond the production phase to encompass dismantling, system recycling, or reuse.

We offer the following expertise to collaboratively identify suitable Circular Economy solutions for your production tools:

  • Analyzing the wear and tear condition of existing plant technology
  • Defining measures for operating refurbished components
  • Conducting feasibility analysis and cost estimation in collaboration with technology suppliers
  • Recommending the optimal solution considering your specific constraints and requirements
  • Coordinating planning, implementation, and operation

If you want to learn more about our services and sustainability, we recommend exploring our Insight series on sustainability in factory planning, where you can gain an overview here.

We have extensive experience and expertise from more than 250 acquired and completed projects. We approach factory and process planning holistically, aiming for digital factory planning beyond the standard. We'd be delighted to show you how you can make your production more sustainable through Refurbishment and the use of Circular Economy approaches. For further information, please contact Thomas Horn (Manager Industrial Engineering).


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Thomas Horn

Thomas Horn
Industrial Engineering

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