How to increase sustainability while strengthening your business
Repairing and reusing machine parts and electrical components makes sense for the environment – and at the same time, it can have a significant positive impact on the bottom line through cost savings and improved supply security.
‘Sustainability’ is high on the agenda in many organisations. The challenge is often understanding how sustainability can be integrated into products and processes in a way that makes sense both for employees and for the company’s profitability and growth.
One rising trend is increased focus on the reuse of smaller and larger mechanical and electrical components in machines and equipment. Take, for example, the engine of a container ship: if the engine fails, standard procedure is to repair and reuse the entire engine. But repairing smaller subcomponents is not always common practice. And this is where there is money to be saved – while also reducing environmental impact.
Another important aspect is supply security. Many companies have been affected by prolonged shutdowns in global markets and supply chains. If a business relies on deliveries of new components from abroad, it becomes highly vulnerable. By repairing and reusing as many components as possible, the organisation becomes more self-sufficient and better able to deliver products and services during supply chain disruptions or shortages. Focus on repair and reuse strengthens the resilience of the supply chain – making it more self-sustaining and more sustainable.
The benefits are many: cost reductions, sustainability and supply security. Read on for insights based on our experience at kaastrup|andersen.
Getting started with sustainability
The first step is a fundamental assessment of how your company currently handles defective components: Which components are repaired – and which are discarded? The task splits into two:
How are repaired components handled?
Who performs the repairs – internal technicians or external suppliers? If external suppliers are used, it is important to check whether they are certified or have undergone quality approval to ensure that repaired components meet the expected standards.
It is also relevant to map how data for repaired components is handled in your systems: master data, stock management and process flows must ensure transparency.
Which components are discarded – and why?
Every component that is normally thrown away should be assessed to determine whether repairing it could make sense. This assessment must include both direct and indirect costs and benefits: cost of a new component, risk of shortage, repair cost (time and money), disposal costs and the environmental impact of scrapping.
Some electrical components or microchips may be complex and expensive to repair – but if they are scarce on the market, repair might still be the best business decision.
Next, a Business Case should be developed. It should capture the direct financial savings, but also the indirect gains such as risk mitigation, strengthened supply security (and therefore productivity), and environmental benefits linked to regulation, compliance and company values.
The Business Case forms the foundation for scoping and planning the activities or project needed to realise the expected benefits.
Is the quality good enough?
Repairing components makes good business sense – but only if the repairs meet the required quality standards.
A common scenario: A service technician finds a defective part at a customer site and, due to time pressure, has it repaired by a local workshop. But can your company trust that the repair is good enough? If the repaired component later fails, it is your organisation that carries the responsibility towards the customer.
Employees may also develop a sceptical attitude toward repaired components if they occasionally fail; in practice, repaired components almost need to perform better than new ones to gain trust.
This is why repairs should only be carried out by certified suppliers with whom the company has a close relationship. The organisation must carefully select suppliers, create agreements and ensure ongoing quality checks of repaired components.
Adjustments to internal processes
To gain the full value of repairing components, both manual and digital processes must be updated. Some of the key areas include:
- Receiving and registration: Who receives repaired components and registers them in the warehouse system – and how?
- Quality control: Who performs the checks? Should all components be tested equally thoroughly, or are some suitable for spot checks?
- Master data: Are there specific data fields for repaired components that need updating?
Top quality is essential – manage your suppliers carefully
Assessing and certifying suppliers requires deep technical insight – and the employees who have this knowledge are often busy. Dedicated time must be allocated, and it may be worth treating the effort as a structured project with allocated hours.
As noted earlier, repaired components may initially have a poor reputation internally. Better quality through supplier management can change this – but not overnight. The company must communicate clearly about new measures, how quality is ensured and what benefits repaired components create.
Clear communication can be supported by hard data: show that repaired components perform on par with new ones and have similar lifetime.
One kaastrup|andersen client, a large manufacturing company, now works strategically with component reuse. Early results show that they expect to cut their spending on new components by more than half in 2021 – thanks to increased reuse.
What about the customers?
The degree to which customers should be involved depends on the company’s service model.
- If the company handles all maintenance, it has full responsibility for uptime – and can choose repaired components as it sees fit.
- If the customer pays per repair, repaired components may be offered at a lower price.
- And sustainability messaging can be part of the brand: showing responsibility by reusing components can enhance market perception.
What gains can you expect?
The advantages of focusing on repair and sustainability are clear:
- Cost savings – repairs are cheaper than buying new
- Supply security – less vulnerability in sourcing critical components
- Lower disposal costs – scrapping components can be expensive
- Reuse of subcomponents – even non-repairable items may contain valuable parts
- Branding – sustainability strengthens your market position
Working with increased reuse does not require large upfront investments. The key is an analytical, structured approach and the ability to translate insights into new processes and a new mindset that creates both short- and long-term value.
Want to know more?
Ready to take the next step?
We help you sharpen your focus on what makes sense for your business when it comes to reusing components, machine parts and equipment. We break down complexity, build the Business Case, map and design processes, and support organisation and communication.
Already started your sustainability journey? We can provide fresh eyes, extra hands or strategic sparring – whatever creates most value for your organisation.
