The Circular Economy | Cat^® Reman & Sustainability

As businesses of all kinds deal with diminishing natural resources and a complex global supply chain, Cat Reman products chart a smart path forward.

That a leading company like Caterpillar found a way in 1973 to reuse and recycle valuable materials, while providing outstanding value for both customers and stakeholders, shows that putting responsible practices into action can create profitable business opportunities. Yet, it requires shifting away from a one-and-done mindset to the more sustainable concept of a circular economy.

The idea of a circular economy is the exact opposite of planned obsolescence. It hinges on designing products that can be remanufactured to begin another product lifecycle after reaching the end of their initial life. In the case of Cat Reman products, that means building major components so they can be remanufactured to like new performance specifications, often multiple times.

Danny Simon, Cat Reman Product Manager, explains, “Sustainability is factored into Cat Reman early on in the design of the new… components. As long as we can plan for [those second lives], that allows us to have solutions that are more sustainable for our customers.”

Instead of sending end-of-life components to the scrap yard, a wide range of Cat parts can be returned to Cat dealers to be sent to one of many dedicated remanufacturing facilities. It’s here that Caterpillar determines whether these used parts (also referred to as "core") are ready to be reclaimed. Using the product’s OEM performance specifications and incorporating Caterpillar’s critical engineering updates, these parts are remanufactured to receive an additional lifecycle. This is completed through our state-of-the-art salvage processes and advanced manufacturing systems, all while adhering to strict reuse guidelines and stringent quality control. The product is then offered to customers at a lower purchase price with a same-as-new warranty* — and the cycle begins again.

Although the term “circular economy” is one of the newer sustainability buzzwords, Caterpillar has been applying the concept for decades.

“Long before sustainability was in vogue, Caterpillar started remanufacturing,” says Jeff Gutzwiller, Cat Reman Engines Product Manager. “We've been in the remanufacturing business 50+ years and that's very important to us because A) it has sustainability benefits and B) it reduces the energy and everything we use in our remanufacturing process.”

Trent Tippey, Cat Reman Commercial Manager for Construction Industries, notes that the remanufacturing cycle not only produces a high-quality product, but it also delivers a lot of value to Cat customers. “You get this opportunity to have a product that's been returned to the same specifications as when our factories produced it the first time, which is a pretty amazing thing. And to be able to have that at a much lower price point** is a pretty desirable thing for all of our customer base.”

Upon arrival, every core goes through a standardized remanufacturing process to meet OEM performance specifications and incorporate critical Caterpillar engineering updates.

“It comes in as a dirty piece of iron,” says Cat Reman Engineering Team Lead Kegan Luick. “We need to clean it, inspect it, find any repairs that are necessary, process those repairs… and then continue through the assembly process to make that product like new.”

Joshua Brooks, Manufacturing Engineer at the Cat Reman facility in Corinth, adds, “We have processes in place to ensure the quality throughout the assembly line.”

Remanufacturing includes cleaning to remove microscopic debris, followed by laser cladding, machining, metal deposition and other advanced salvage procedures. After reassembly, the component is tested to make sure it meets the standards of new Cat parts and is reintroduced to the supply chain as a Cat Reman product, with a same-as-new, 12-month Caterpillar Parts Warranty.*

Jeff Gutzwiller says the whole process uses much less energy and fewer resources than manufacturing a new part, especially for a major component like a Cat engine.

He explains, “If it's a core piece of iron, like a casting or a forging, we're just taking it back and we're salvaging it and putting a relatively low amount of energy and work into that product to bring it back to that like new condition.”

Kegan Luick notes that Caterpillar is always looking for ways to improve sustainability at every step. ”The remanufacturing process is just like any other manufacturing process in that we have waste streams that are generated… What is exciting about… Cat Reman is that we take those waste streams seriously and are investing in technologies to reduce and eliminate waste, including developing new cleaning practices that either use laser cleaning or new chemicals that [have less impact on] the environment.”

The goal, he concludes, is to “minimize the impact on our planet and make remanufacturing even more sustainable than it is today.”

Brian Edwards, Senior Vice President of the Caterpillar Remanufacturing Division, says the company’s ability to close the economic circle with Cat Reman products results in faster service and added value for Cat customers. “We have a world-class core management process and system… It creates what has become a very robust system to move parts components to customers and back as quickly as possible.”

Trent Tippey adds, “We look at that core as an opportunity… An opportunity to go through and give our customer a value position that they didn't have access to before.”

Customers no doubt appreciate the low cost of Cat Reman products, which typically are a fraction of the new price with core return. What’s more, says Chip Hussey, Operations Manager at Eutaw Construction in Madison, Mississippi, additional value comes from not having to deal with used parts. “Being able to turn in those cores… takes some of the cost of proper disposal, or anything along those lines, off of us as a company.”

Maintaining the circular economy of Cat Reman products has become a vital part of the Caterpillar business model.

“Sustainability is a core value for Caterpillar,” says Marcus Fair, Global On-Highway Truck Engine Sales Manager, Cat Reman. “Cat Reman has been around since 1973, and if you think about the amount of material that over the years we've kept out of landfills, it's definitely something that we take pride in.”

“We're one of the largest remanufacturers in the world,” Jeff Gutzwiller observes, “and we're very proud of that.”

Kathy Monson notes that the commitment to sustainable remanufacturing starts at the top of the Caterpillar enterprise. “I was very happy when I saw our recent corporate sustainability goals for 2030, and remanufacturing is on there to increase our sales for Cat Reman products… Knowing that our executive office has that commitment to sustainability, and they're understanding the role that Cat Reman plays in those goals… it's good to be able to see those tangible results.”

Trent Tippey agrees and says Caterpillar’s efforts to create a circular economy for vital machine components is having an ongoing ripple effect throughout the industry and into the world at large. “I think [Cat] Reman is going to be a conversation with our customers, [a] conversation with political entities throughout the globe and a conversation around the dinner table in regard to how we, as a society, can meet the challenges of climate change head on.”

Check out the range and variety of available Cat Reman parts.

^{*Warranty can vary by model and application; limitations may apply. For complete details about the applicable Caterpillar Limited Warranty, contact an authorized Cat dealer.
**Cost savings based on return of core; core conditions apply.} 

^{***Represents U.S. environmental impacts comparing "gate-to-gate" remanufacturing and manufacturing processes for engines and components. Based on 2018 external study of Cat engines, alternators and turbochargers. Does not include impacts elsewhere in our value chain.}