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    Operations Management Sustaina Chain Management 12th Edition 242

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    omer asghar
    Caterpillar has implemented a remanufacturing initiative called Cat Reman to reduce waste and costs. Through Cat Reman, Caterpillar takes back used components from customers and remanufactures them to like-new performance at a fraction of the cost of new components, while producing less environmental impact. In a one-year period, Caterpillar remanufactured over 130 million pounds of material from 2.1 million end-of-life units returned by customers. Regulations and industry standards provide guidance for product design, manufacturing, and disposal to promote more sustainable operations. Some companies now design their products to be more easily disassembled and recycled at end of life through closed-loop supply chains.

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    Operations Management Sustaina Chain Management 12th Edition 242

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    omer asghar
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    Caterpillar has implemented a remanufacturing initiative called Cat Reman to reduce waste and costs. Through Cat Reman, Caterpillar takes back used components from customers and remanufactures them to like-new performance at a fraction of the cost of new components, while producing less environmental impact. In a one-year period, Caterpillar remanufactured over 130 million pounds of material from 2.1 million end-of-life units returned by customers. Regulations and industry standards provide guidance for product design, manufacturing, and disposal to promote more sustainable operations. Some companies now design their products to be more easily disassembled and recycled at end of life through closed-loop supply chains.

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    Caterpillar has implemented a remanufacturing initiative called Cat Reman to reduce waste and costs. Through Cat Reman, Caterpillar takes back used components from customers and remanufactures them to like-new performance at a fraction of the cost of new components, while producing less environmental impact. In a one-year period, Caterpillar remanufactured over 130 million pounds of material from 2.1 million end-of-life units returned by customers. Regulations and industry standards provide guidance for product design, manufacturing, and disposal to promote more sustainable operations. Some companies now design their products to be more easily disassembled and recycled at end of life through closed-loop supply chains.

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    30 views1 page

    Operations Management Sustaina Chain Management 12th Edition 242

    Uploaded by

    omer asghar
    Caterpillar has implemented a remanufacturing initiative called Cat Reman to reduce waste and costs. Through Cat Reman, Caterpillar takes back used components from customers and remanufactures them to like-new performance at a fraction of the cost of new components, while producing less environmental impact. In a one-year period, Caterpillar remanufactured over 130 million pounds of material from 2.1 million end-of-life units returned by customers. Regulations and industry standards provide guidance for product design, manufacturing, and disposal to promote more sustainable operations. Some companies now design their products to be more easily disassembled and recycled at end of life through closed-loop supply chains.

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    S U P P L EMENT 5 | S U S TAI NABI LI TY I N T HE SUPPLY CHAIN 203

    End-of-Life Phase
    We noted earlier that during product design, managers need to consider what happens to a
    product or its materials after the product reaches its end-of-life stage. Products with less mate-
    rial, with recycled material, or with recyclable materials all contribute to sustainability efforts,
    reducing the need for the “burn or bury” decision and conserving scarce natural resources.
    Innovative and sustainability-conscious companies are now designing closed-loop supply Closed-loop supply chains
    chains, also called reverse logistics. Firms can no longer sell a product and then forget about it. Supply chains that consider
    They need to design and implement end-of-life systems for the physical return of products that forward and reverse product flows
    facilitate recycling or reuse. over the entire life cycle.
    Caterpillar, through its expertise in remanufacturing technology and processes, has devised
    Cat Reman, a remanufacturing initiative, in an effort to show its commitment to sustainabil-
    ity. Caterpillar remanufactures parts and components that provide same-as-new performance
    and reliability at a fraction of new cost, while reducing the impact on the environment. The
    remanufacturing program is based on an exchange system where customers return a used com-
    ponent in exchange for a remanufactured product. The result is lower operating costs for the
    customer, reduced material waste, and less need for raw material to make new products. In
    a 1-year period, Caterpillar took back 2.1 million end-of-life units and remanufactured over
    130 million pounds of material from recycled iron.
    The OM in Action box “From Assembly Lines to Green Disassembly Lines” describes one
    automaker’s car design philosophy to facilitate the disassembly, recycling, and reuse of its
    autos that have reached their end-of-life.

    Regulations and Industry Standards


    Government, industry standards, and company policies are all important factors in opera- LO S5.5 Explain the
    tional decisions. Failure to recognize these constraints can be costly. Over the last 100 years, impact of sustainable
    we have seen development of regulations, standards, and policies to guide managers in prod- regulations on operations
    uct design, manufacturing/assembly, and disassembly/disposal.
    To guide decisions in product design, U.S. laws and regulations, such as those of the Food
    and Drug Administration, Consumer Product Safety Commission, and National Highway
    Safety Administration, provide guidance and often explicit regulations.
    Manufacturing and assembly activities have their own set of regulatory agencies provid-
    ing guidance and standards of operations. These include the Occupational Safety and Health

    OM in Action From Assembly Lines to Green Disassembly Lines


    A century has passed since assembly lines were developed to make
    automobiles—and now we’re developing disassembly lines to take them
    apart. So many automobiles are disassembled that recycling is the 16th-
    largest industry in the U.S. The motivation for this comes from many sources,
    including mandated industry recycling standards and a growing consumer
    interest in purchasing cars based on how “green” they are.
    New car designs have traditionally been unfriendly to recyclers, with little
    thought given to disassembly. Some components, such as air bags, are hard to
    handle and dangerous, and they take time to disassemble. However, manufac-
    turers now design in such a way that materials can be easily reused in the next
    Ton Koene/Alamy

    generation of cars. The 2015 Mercedes S-class is 95% recyclable. BMW has
    disassembly plants in Europe, Japan, New York, Los Angeles, and Orlando.
    A giant 200,000-square-foot facility in Baltimore (called CARS) can disas-
    semble up to 30,000 vehicles per year. At CARS’s initial “greening station,”
    special tools puncture tanks and drain fluids and remove the battery and gas
    tank. Then wheels, doors, hood, and trunk are removed; next come the interior minimills that use scrap steel. Reusable parts are bar-coded and entered into a
    items; plastic parts are removed and sorted for recycling; then glass and interior database. The photo shows an operator controlling the car recycling plant.
    and trunk materials. Eventually the chassis is a bale and sold as a commodity to Sources: Wall Street Journal (April 29, 2008) and Time (February 4, 2010).

    M06_HEIZ0422_12_SE_C05S.indd 203 03/11/15 6:21 PM

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