For decades, manufacturing has followed a linear model—take raw materials, make products, use them, and dispose of them. However, with rising resource scarcity and environmental concerns, this approach is no longer sustainable. Instead, the circular economy model—where components are repaired, remanufactured, and reused—is gaining traction.
By embracing repair and remanufacturing, manufacturers can reduce waste, cut costs, and minimize downtime. But when equipment fails, how do you decide whether to repair, remanufacture, or replace it? Let’s explore the key considerations.
Warranty and Cost Considerations
The first factor to assess is whether the equipment is still under warranty. If so, repairs or replacements may be covered, reducing out-of-pocket expenses. For equipment outside the warranty period, maintenance engineers often follow the 50/50 rule: if repair costs (parts + labor) exceed 50% of the machine’s original value, replacement might be the better option.
However, circular economy advocates argue that repair or remanufacturing should always be prioritized unless the cost exceeds buying new equipment. Additionally, older machines don’t necessarily break down more frequently—proper maintenance can extend their lifespan significantly.
Industry-Specific Regulations
Not all industries allow for repairs or remanufacturing. In biomedical manufacturing, aerospace, and pharmaceuticals, strict regulations may require equipment replacement at set intervals. In these cases, refurbishing may not be an option, regardless of cost savings.
Before deciding, manufacturers must review industry compliance standards to ensure repairs or remanufactured parts meet legal and safety requirements.
Availability of Parts and OEM Support
Another critical factor is whether the original equipment manufacturer (OEM) still produces the required parts. If the machine is obsolete, sourcing replacement components can be difficult and expensive. In such cases, third-party remanufacturing or aftermarket parts may be the only viable solution.
However, using non-OEM parts can sometimes void warranties or affect performance. Manufacturers must weigh the risks and benefits before opting for refurbished or aftermarket components.
Environmental and Long-Term Business Impact
Beyond cost and compliance, sustainability should play a key role in decision-making. Repairing and remanufacturing reduces e-waste, lowers carbon footprints, and conserves raw materials. Companies committed to ESG (Environmental, Social, and Governance) goals can enhance their brand reputation by adopting circular economy practices.
Additionally, investing in remanufactured parts can lead to long-term savings, as they often come at a fraction of the cost of new equipment while offering comparable performance.
Conclusion: Making the Right Choice for Your Business
When equipment fails, manufacturers must consider warranty coverage, repair costs, industry regulations, part availability, and environmental impact before deciding whether to repair, remanufacture, or replace.
While the circular economy model promotes sustainability and cost-efficiency, it’s not always feasible in highly regulated industries. By carefully evaluating these factors, manufacturers can make informed decisions that benefit both their bottom line and the planet.
