Page 225 - Design for Environment A Guide to Sustainable Product Development

202 Cha pte r T e n

increase energy efficiency in its own operations by 25%, reduce abso-
lute GHG emissions by 25%, use alternative and renewable sources
for 20% of its energy needs, and eliminate waste to landfill [1].
A cornerstone of Caterpillar’s sustainability strategy is product
take-back, based on the concept of “extended producer responsibil-
ity.” Caterpillar has been in the remanufacturing business for over 30
years and its remanufactured products include on-and-off-highway
engines, engine components, transmissions, hydraulic components,
and electronic components. Caterpillar also offers remanufacturing
services to original equipment manufacturers that serve the rail, in -
dustrial, defense, and automotive industries. In 2006, Caterpillar
acquired Progress Rail, one of the largest service providers in the
rail industry, which remanufactures and recycles used railcars, loco-
motives, rail, and track.
Caterpillar’s Remanufacturing Division, known as Reman, is a
significant recycler of end-of-life Caterpillar products. The remanu-
facturing process reduces waste, minimizes the need for raw materi-
als required to produce a new part, and helps ensure the recovery of
end-of-life products through a closed-loop reverse logistics process.
End-of-life components, called “cores,” are taken back, inspected, and
disassembled; and every part is remanufactured to print specifi -
cations incorporating all applicable engineering updates. The re -
manufactured parts, supplemented by new parts where required, are
assembled into finished remanufactured products, tested, packaged
for sale, and warranted the same as new products. If “Environmental
Product Declarations” are provided to customers for new parts or
components, a similar declaration would be provided for the reman-
ufactured part or component.
Joe Allen, General Manager and Director of Sustainable Develop-
ment for Cat Reman, explains it as follows: “Our remanufacturing
program is based on an exchange system. Customers return a used
component and receive a remanufactured replacement component
with same-as-new quality, reliability, and warranty in return (see
Figure 10.3). We then use the end-of-life returns in the remanufac-
turing process to produce like-new remanufactured products—or
better-than-new if we are able to design and implement new engi-
neering changes into that product.”
Reman is Caterpillar’s fastest growing division, due in large part
to its profitability and its resilience during business downturns.
The division’s employee base has grown from 800 employees in 2002
to approximately 4,000 in 2008, distributed globally at 17 dedicated
remanufacturing facilities in 8 countries. Some countries have restric-
tive trade policies on remanufactured products, and in expanding
its international business Caterpillar has worked closely with the
U.S. government and the World Trade Organization, among others,
to help eliminate these barriers. Caterpillar opened its first Asian re -
manufacturing center in Shanghai, China, in 2006, and was the first