[ { "start": 3.0, "end": 25.0, "text": "Thomas Meyer:\nThe definition on how big the value is, is not linked to the sales price of the product, but more the value of a core on the market. The deposit value must be higher than what we pay on the market, at a core broker. Way higher than the scrap value of the product, in order to motivate the return of the core." }, { "start": 25.0, "end": 51.0, "text": "Jingle:\nMy name is Patrick Hypscher, and this is circularity.fm, the podcast about understanding, building, and managing circular business models." }, { "start": 51.0, "end": 89.0, "text": "Patrick Hypscher:\nThis is the second episode of B2B Take Back. Last week, Antonia and Marcos showed how DERIX guarantees a return decades before it happens. Today, we move from buildings to trucks. Brake systems, air treatment, steering, parts that wear out, come off, and get replaced. You will find the one-page summary of this episode in our newsletter, together with the circular economy events coming up around the world. Just sign up for it at [www.circularity.fm](https://www.circularity.fm)." }, { "start": 89.0, "end": 113.0, "text": "Patrick Hypscher:\nHe has a background in engineering and works for over 12 years for Knorr-Bremse. At Knorr-Bremse, he is responsible for the remanufacturing, repair, and reuse activities within TruckServices. Combines multiple perspectives for most strategy, purchasing, industrialization, customer value, and sustainability. Welcome, Thomas." }, { "start": 113.0, "end": 115.0, "text": "Thomas Meyer:\nThank you for having me, Patrick." }, { "start": 115.0, "end": 122.0, "text": "Patrick Hypscher:\nThomas, we start with a private question. What is a product you would never give back personally?" }, { "start": 122.0, "end": 152.0, "text": "Thomas Meyer:\nProduct I would never give back. Oh, that's, that's a challenge to start. I personally own a product I would never give back. It's hard to say because, if it's broken and non-functional, I know that there's always somebody out there who repairs or remanufactures it. So, not giving it back, I don't, I don't see the value in it, yeah. So no, yeah. And I'm, I'm not the person who keeps a lot of stuff around, yeah." }, { "start": 152.0, "end": 164.0, "text": "Patrick Hypscher:\nOkay, cool. That sounds like a good fit to your job. We zoom into that one can you tell us a bit who is Knorr-Bremse and what does the company offer in general?" }, { "start": 164.0, "end": 211.0, "text": "Thomas Meyer:\nYeah, sure. Knorr-Bremse is a global company, one technology leader, uh, not only for truck, but also in rail. And, in the meantime, 120 years old. Founded in Berlin, with our headquarter in Munich, but we are globally present, yeah. And for myself, uh, I work in the truck division and as you said, as you stated at the beginning within TruckServices, which is the aftermarket brand for the commercial vehicles department, yeah. What does Knorr-Bremse? Knorr-Bremse comes from the braking system, pneumatic braking systems for trucks and buses off highway, but also rail. Yeah, this is where the heritage comes from. And we offer all variants of products to OEMs,." }, { "start": 211.0, "end": 222.0, "text": "Patrick Hypscher:\nThat's quite a footprint. And now we wanna talk about the EconX program. Can you tell us a bit more about the scope of that program?" }, { "start": 222.0, "end": 273.0, "text": "Thomas Meyer:\nSure, sure. Econ- EconX, um, stands for economical ecological exchange, and is actually the brand name for our remanufactured products within the commercial aftermarket division within TruckServices. The brand name itself was launched 2016 the brand name was launched two years after I joined Knorr-Bremse when we started centralizing, uh, remanufacturing within Europe. And we focus on the reman of our product in the-- of the commercial vehicles. And over the past years, we extended it because actually this range, yeah. So, so EconX is our, our brand name. And in the meantime, as I'm globally re- responsible for it, it's also, uh, the brand name in South America, Australia, and Asia." }, { "start": 273.0, "end": 284.0, "text": "Patrick Hypscher:\nOnce again, impressive. Who are the target customers? Are they similar to the customers you address with the brand new products? Or are there also new customer segments in there?" }, { "start": 284.0, "end": 334.0, "text": "Thomas Meyer:\nThey are the same customers we, we work with for our, uh, service new parts within the aftermarket. The aftermarket is splitted between two channels, uh, the independent aftermarket, and we call it the OES, the after-sales of the OEMs. Uh, and we offer this, this remanufacturing not only to the independent aftermarket, also to, to our OES customers, focusing on our products and extending it what you might have heard or might have read, uh, with the repair of ECUs, so electronic control units, which are then going beyond our Knorr-Bremse core portfolio, but our multi-brand, yeah uh, repair network we built up together with Cojali, uh, our company in Spain." }, { "start": 334.0, "end": 351.0, "text": "Patrick Hypscher:\nOkay, and do you offer also when new products in that product category and then just take your products and products from other manufacturers? Or is it like a category you don't have any association with when it comes to new products?" }, { "start": 351.0, "end": 434.0, "text": "Thomas Meyer:\nW- when you relate to it to the E- ESB REMAN, this is not where we offer, uh, service new products, yeah. So these are we, we as Knorr-Bremse are not the OEM. This, this offer comes out of the, the ability that Cojali offers with the multi-brand diagnostic Jaltest to fully, uh, simulate the CAN bus of a, of a commercial vehicle, and therefore re- reproduce the failure code that a workshop might see. And, uh, with the knowledge both companies are having and, and me in my area, my team and, uh, the production plant are having to be able to repair, uh, electronic components desoldering of microcontrollers, ceramic capacitors, and so on and so forth to be really able to repair the distinguished failure and provide this as a one-to-one repair service back to the customer. And especially looking at the trend where more and more electronic components go into vehicles and the lifetime of electronics is ever evolving on a rapid pace that, that if your product is five to 10 years old, it's really hard to get a spare part at the meantime. Uh, so these, these are the challenges that are just growing within, within the industry and the aftermarket." }, { "start": 434.0, "end": 450.0, "text": "Patrick Hypscher:\nYeah, super exciting because, I mean, then you're not you did not only enter a new market with EconX in the first place, now you go even further and, grow in a category, your core business is not directly active in. So super exciting." }, { "start": 450.0, "end": 459.0, "text": "Thomas Meyer:\nYeah, correct. Trying to extend the, the service and the possibilities for our customers, yeah, and the life cycle of the product." }, { "start": 459.0, "end": 475.0, "text": "Patrick Hypscher:\nYeah, wonderful. I mean, y- you just briefly described a bit the variety of your portfolio and I can imagine there are many different processes and v- variants, but how does a typical end-to-end process look like?" }, { "start": 475.0, "end": 599.0, "text": "Thomas Meyer:\nYeah, we sure we, we can take a look at that how remanufacturing works. And I, I would focus on, on, on the remanufacturing here because as I described before, the electronic repair is really a one-to-one repair relationship than to of the product. And I-- remanufacturing is, is a bit more complex in order to make it possible and, and be able to, to do that. Remanufacturing is a industrialized process, a fully industrialized process. And on a high level, of course, it starts with an old product that is not functioning anymore, the core. And this is the, the core is the heart or the gold of remanufacturing, whatever you might look at it. Without having the core, you cannot do a remanufactured product. As simple as that. And then it's aboutdisassembly or creating of the core. Is the core I'm, I'm getting back into my production plant, is it suitable for remanufacturing? There's al- ever evolving different design levels, des-design stands, that happen during the lifetime. And when we look at commercial vehicles, our products are quite old. So, we have some that are in production over twenty years. So there are, of course, multiple enhancements over this time that happened, and this we need to evaluate for, for remand. So this is where it starts, at the creating of the core, then the disassembly, and of course, the definition which parts can I reuse, which parts are economically feasible to re-reuse and which parts need to be exchanged to, to reach the quality and the quality expectations, that the customer expects. And then with a disassembly of the product, we move into cleaning, reconditioning, and in between quality checks before it's finally assembled and, end of line testedbefore shipped and sent back to our warehouses or then the customers, the distributors." }, { "start": 599.0, "end": 608.0, "text": "Patrick Hypscher:\nOkay, quite a comprehensive process. Let's look a bit at the business model. Overall is this a profitable business model for Knorr-Bremse?" }, { "start": 608.0, "end": 673.0, "text": "Thomas Meyer:\nThe, the profitability has, um, maybe two sides to look at, yeah. With, with EconX, we offer a time value related repair, for the customer. So what d- what does that mean? Of course, because components are reused the lifetime expectancy of a remanufactured product is less than a new one, yeah. So one-- when you have a brand new truck, a brand new vehicle, we do not recommend a new exchange part for this in case of a repair need. And the process can only be profitable if we have the, the cores sufficiently available to do the process, yeah. If the demand exceeds the, the core availability and we would need to, use a lot of new components to, to build a reman product this is not economically, sustainable and, and not what reman stands for at Knorr-Bremse Reman, yeah. So, this is where it is a profitable business if all these factors, yeah, regeneration rate, core return rate are for a positive figure." }, { "start": 673.0, "end": 721.0, "text": "Patrick Hypscher:\nAnd overall, I mean, my understanding of after-sales in the automotive industry, and especially then reman, is that the special value proposition is driven by the like original spare parts, like brand new spare parts being not available anymore. I mean, of course, like if a certain OEM brings a new vehicle to the market, there are brand new spare parts for a couple of years. But at some after some time, after some years there's just only a safety stock and availability decreases, prices increase, and this is then at some point where the sweet spot for remanufacturing starts to be. Is this overall also correct for your business model, or is it slightly. Different?" }, { "start": 721.0, "end": 802.0, "text": "Thomas Meyer:\nIt's overall correct while when you differentiate between a passenger car and commercial, the average truck age in Europe is around 11 years. And of course there are vehicles out there that are, way older. As I said before, we have some products that we produce for more than 15 to 20 years, in OE. Uh, so it's not that the, a new product would not be available anymore, yeah? But there comes the view on the total cost of ownership from the fleet manager and the fleet owner. And when your vehicle has reached a certain age the willingness to pay a high price for a OE service new product, is de- understandingly decreasing, yeah? And this is then where, genuine remanufacturing from us offers a, A price level that off-- that brings this, this time value-based repair and with the knowledge that, it comes from the OEM, that it is an original product, with original spare and wear parts. Yeah. So we are of course having the advantage of having the OE wear parts like sealings and so on. And we test them according to our end of line specification like a new part." }, { "start": 802.0, "end": 813.0, "text": "Patrick Hypscher:\nSo sticking to the business model, where does the revenue come from? And can you give us a bit of an idea of the price range of the products we've been talking about?" }, { "start": 813.0, "end": 860.0, "text": "Thomas Meyer:\nThe revenue clearly comes from selling the parts to the customer, yeah. The price range we're talking about 20% decrease towards a service new product that we offer in the independent aftermarket. It can vary product by product. There's of course always a, a lifetime curve, uh, when, when OE production is decreasing and so on and so forth where there are variabilities. But as a roughnumber of the thumb, it's about 20%, lower, lower than, than a s- than a new product in the aftermarket, yeah. And yeah, the rest only supports the business model, yeah. The core management and core return supports the business model, but revenues come clearly from the sales of the products." }, { "start": 860.0, "end": 866.0, "text": "Patrick Hypscher:\nOkay. Now let's look a bit at the cost side. So what are the main cost positions?" }, { "start": 866.0, "end": 937.0, "text": "Thomas Meyer:\nWithin the process, I think for listeners who are not familiar with Reman and the process, it's despite the fact that it is highly industrialized, and controlled, it's a very manual process. So, if you look at the business model, the, the labor content shall always not exceed the cost of a new component that we pay. And in order to have that, what I mentioned before is the, is the core, return and the core logistic one of the, one of the cost drivers, in this business model. Yeah. In Europe, we return around 160,000 cores annually back to our facility in Liberec, which we sort, create and, then use for production or store if we don't have them yet in our production. So we strategically already collect the cores, for future products. And then it's the manual content. Yeah. So this-- the, the manual labor to, to recondition and at the end assemble again is the, is the cost drivers of the process. Or the, the aim is of course to be there as sufficient as possible with the highest regeneration rate one, one can have." }, { "start": 937.0, "end": 975.0, "text": "Patrick Hypscher:\nWhat are then, principles you apply when it comes to scoping the service? You just mentioned that you sometimes even decide to to buy back or take back components where you don't have the, the process operating yet just to be prepared. I can also imagine there are some certain price thresholds where, say, if the part is is cheaper than a certain amount, it doesn't make sense anymore if it might be high value, but the manual labor you need to remanufacture it. So wha- what are essential principles you look at when it comes to scoping the service you offer?" }, { "start": 975.0, "end": 1135.0, "text": "Thomas Meyer:\nWe are distinguishedly set up. So the, the strategy of Knorr-Bremse is to offer a remand product or to have a circular economy solution for our product. So part of that starts already at the design of new generations. Yeah, that, that my team is part of the design process of every new product. It's also mainly the requirements of the OEMs to, to have a circular product available. Not only the last couple of years, but this already started, when I was joining Knorr-Bremse. So these design features are of course essential, but also very challenging. It's the, I always say it internally, it's the holy grail, yeah. Because sometimes to design for circular economy, to design for remanufacturing would need higher costs in OE, which are con- contradicting, the general design and, and threshold process over there. But then as in general as we want to have a remanufactured solution of the product available and during the design phase, there's alre- already a pre definition of, or evaluation if this product in the future will be ready for remand or not. Depending on what exactly what you said, Patrick, if the, How are the components? How are the single components? What is our experience on how much, value do I need to put in order to reconditioning and to, to have them available at the end? So there, there are thresholds that, that every company has for sure in, in their process. And as we have this set up the remand program set up we sell every product in the in the independent aftermarket to our distributors with a core deposit, and even the service new products. As soon as the the product spare part needs to be available on the market, which is A year, one and a half years, depending of the product after the SOP of the vehicle at the OEM. This is where the aftermarket needs the potential spare part, yeah. Of course, lifetime is way longer, but you need to have the spare part available in case of a need. So independent aftermarket starts at a certain time after SOP of the vehicle, and this is where we start collecting via core collection already the cores, and we store strategically f- to start the remand program then five years or so later." }, { "start": 1135.0, "end": 1137.0, "text": "Patrick Hypscher:\nMm-hmm." }, { "start": 1137.0, "end": 1140.0, "text": "Thomas Meyer:\nHow we have our model set up." }, { "start": 1140.0, "end": 1153.0, "text": "Patrick Hypscher:\nAnd in terms of geography you already mentioned you cover quite some continents. Uh, then the whole service portfolio available in these regions? Or do you then also differentiate?" }, { "start": 1153.0, "end": 1196.0, "text": "Thomas Meyer:\nWe differentiate in terms of what is the customer need in the regions, yeah, which ve- which vehicle parks are, are active in the region. So Knorr-Bremse Reman, is available in, in Europe, North America, under the-- our, our brand name of the, of Bendix Reman, for North American vehicles. And South America, we also have Reman in our plant in Brazil. And we're just launching, Reman for European applications in Australia, but we serve this out of Europe. So we don't have any production plant in Australia. But it's of course customer demand, and then evaluation, do I get the cost back?" }, { "start": 1196.0, "end": 1225.0, "text": "Patrick Hypscher:\nWhat are the quantities? Is there the possibility? Super interesting. Thomas, I wassuper excited in the, the months before our conversation about the deposit system, and you already announced it because I've not seen many companies doing something like that in the let's say, in the circular economy or on take back field, and I guess it's also super interesting for others to look into it. So, tell us, how is this deposit system working?" }, { "start": 1225.0, "end": 1338.0, "text": "Thomas Meyer:\nYeah, that'sas, as I just said, the deposit system, works within the independent aftermarket. And for Knorr-Bremse, we have it set up is exactly for, new products and remand products. So when one of our customer purchases one of our products, he needs to pay a deposit value. And, and this is where it becomes tricky, it's the deposit is sometimes mistaken with the German word Pfand. Yeah. Legally, um, when you buy a, a bottle in Germany, and you need to pay a certain amount to bring the bottle back, you're never the owner of the bottle. Uh, when you purchase your vehicle, your private car, you are the owner of every component of this car. And if your component is broken, you're still the owner of this component. So, what we need to do, we need to buy the product legally back from the customer. And then we take again ownership of it, and of course can do, the remanufacturing with it or store it, because we want to do remanufacturing with it in three, four, five years. And this deposit works the way that every customer who purchases, has then a, a credit note, for him, and he has 12 months, in order to return, this product. This is the module active in Europe. In North America, there's a delayed deposit or an upfront deposit. It's a bit more, bit more complex. Their customers have the possibility to return cores within six months. If they don't return within six months they receive the invoice for the non-return. Or if they go the same model as in Europe, they pay upfront, and they have 12 months to return a core." }, { "start": 1338.0, "end": 1356.0, "text": "Patrick Hypscher:\nAnd just to make sure that I understand that correctly, especially the six to 12 months. So actually you don't necessarily want to have the extra price. You just wanna make sure that you have a one-to-one return. So whenever someone, buys a remand product from you that you get in return similar product back." }, { "start": 1356.0, "end": 1429.0, "text": "Thomas Meyer:\nExactly. An equivalent product back. So, of course, if he buys a two-cylinder compressor from us, I would love to have a two-cylinder compressor from us back. Even when we are set up that it doesn't need necessarily to be the same compressor. But most of the time because the workshop has exactly the same compressor, it's what you receive back. But there is a bit of a flexibility behind. I mean, this, this model is active in the automotive field. It's very well known with its challenges behind 'cause it's Yeah, I, I can understand for, for workshop or distributors, they have this core deposit, not only for Knorr-Bremse, but also all the others as well. In, in Europe, the customer needs to pay upfront. So he buys the product and there's a separate invoice for the buyback option, the deposit value. And this he pays upfront. And from this, this money we keep for 12 months or less until he returns it, yeah. And look- looking at how the module works, of course, this is an accrual account that then pays back the money to the customer, and it is linked to each individual customer and, yeah, their purchase." }, { "start": 1429.0, "end": 1441.0, "text": "Patrick Hypscher:\nOkay, and just to clarify that also up front, the reason why you don't have this for OEMs is because they are the parts are part of the original brand new overall vehicle product." }, { "start": 1441.0, "end": 1499.0, "text": "Thomas Meyer:\nYes, and this kind of system was never set up between us and an OEM. One might think about it, why not to do it as well to keep this flowing. But I have to say, like, what we have set up for the independent aftermarket, all of our OEMs have set up as well. So they, they're returning their cores as well from their workshop network system dealer system as well to their warehouse. And, when we do the remanufacturing for an OEM, it's, they supply us with a cores. Yeah. That's, that has also the impact that one OEM only receives reman from his cores. Yeah, if, if we would buy it from the OEM, we could also use them for another channel. Yeah. So that there's some implications behind that, that are linked to this, this setup. Um, both systems work. Yeah." }, { "start": 1499.0, "end": 1509.0, "text": "Patrick Hypscher:\nNow let's talk about the value o- of this deposit. So how do we decide on the amount per certain part or category?" }, { "start": 1509.0, "end": 1612.0, "text": "Thomas Meyer:\nYeah. It's been set up so Knorr-Bremse, since I joined, we increased it once, to the current value. And we have this now more or less stable for 10 years. And the definition on how big the value is, is not linked to the sales price of the product, but more the value of a core on the market. There's also a market of core brokers that source cores from various sources, scrapyards, export markets, you name it, and there's a certain value behind. And we also buy cores strategically, if needed from core brokers. This price was mainly stable over the last years and the deposit value must be higher than what we pay on the market, at a core broker. So it's a bit oflooking at it, what is the value? What could a workshop get for value? It's, it's so it's, yeah, way higher than the scrap value of the product, in order to motivate th- this the return of the core. And prices of course on the free market rose over the last years as especially in, in Europe as the industry and the legislation pushes more towards circular economy and remand. Every, every producer of a remand product wants to have cores, needs cores as for remanufacturing. So there's a, there's this constant demand on cores in the market. And this more or less sets the value of the core deposit." }, { "start": 1612.0, "end": 1632.0, "text": "Patrick Hypscher:\nAnd the risk of it being too low is that then the customer turns to dealers, to repair shops rather give it to brokers that offer a higher value. And if the deposit is too high, you might have challenges in selling the spare part in the first place." }, { "start": 1632.0, "end": 1654.0, "text": "Thomas Meyer:\nEx-exactly. Yeah. The, the, the deposit value is always seen as a price level of course, yeah, 'cause you have the price for the product plus the deposit. The end user, the consumer sees it as a price and not realizing that he gets it back once he returns the old, product. Yeah. So, uh, this is, This is the challenge that is, in this field." }, { "start": 1654.0, "end": 1675.0, "text": "Patrick Hypscher:\nAnd I guess this is a key skill set in your team you need to have to also put then the price or, like, the deposit for a specific product at the right height or in the right category. Is it since it's like you just adapt it every decade or so it's not so much of a topic. In daily business?" }, { "start": 1675.0, "end": 1735.0, "text": "Thomas Meyer:\nIt's not in the daily business. This setting the deposit value is not, not the challenge. It's the you need to evaluate when a new product is launched for example, the eCompressor that is newly in the market, yeah, that also has an electric motor on, there I need to distinguish, okay,. Which deposit value do I put behind an electric motor, the compressor itself? What is the value? How do I motivate to get it back? And versus established core values of mechanical products like an air disc brake or a normal compressor, where, where it's more or less stable or our me- mechatronic products as well. So this is more or less not the daily work effort, yeah. What, what is more the daily work effort if um, uh... Is a disagreement or, a misalignment on numbers of the core return and, and core, evaluation, this is more the daily work what my team needs, needs to take care of and what needs to be documented in this whole process, yeah, that, that you do it correctly, yeah." }, { "start": 1735.0, "end": 1755.0, "text": "Patrick Hypscher:\nYeah. Okay. Yeah, that leads me to a question about accounting. How do you do it in your books? So do you create accruals provisions for these deposits? And is this also just a minor thing or something you-- that, that constantly needs attention from you as the manager of that unit?" }, { "start": 1755.0, "end": 1812.0, "text": "Thomas Meyer:\nYes, we build accruals. Yeah, this is, um, I mean, the, the model implicates that based on the prepayment for the buyback option or the p- the paying for the buyback implicates that we need to pay the money back, when the customer returns. So this is a separate account from where then the d- the value is repaid back to the customer. Or it's happening on a monthly basis, so yes, there is accrual billing behind. But normally it doesn't need extra, managerial attendance once, once the system is set up in the ERP. So we're running this completely in the ERP system in within different modules that are involved, in, in, in managing core return and monitoring when which customer bought a product in which core-- in the respective core category." }, { "start": 1812.0, "end": 1848.0, "text": "Patrick Hypscher:\nI feel like for you these are kind of surprising questions because it's daily business and it kind of works. But if I look into other industries that are purely let's say, linear driven and they don't have this big after after sales market and processes I mean, I talk to many companies that are initially overwhelmed by the need to adapt systems. Yeah, the, the ERP system only knows goods and products that leave the company, but they never come back, yeah? And things like that. But for the automotive industry, it seems to be rather a, a usual thing." }, { "start": 1848.0, "end": 1962.0, "text": "Thomas Meyer:\nYes and no, because it needed to be set up and we as a big company live in SAP and it's not built for circular economy. And it's always when I have the chance to talk to, one of the ERP system colleagues, it's not made for circular economy, and it needs to be adapted and there needs to be work around. You need to distinguish core categories to be able to book them onto as you, you want to have it as a stock, like as an incoming good to be able to process it. But then additionally, there's a challenge that reverse BOMs are not existing, yeah. All the ERP system, as I said, it's a linear... It comes from a linear economy, and it's very good in taking single components, having it in a tree, and at the end you have a, a, a final product, yeah? But if we look at reman and the disassembly, you have one part number and out comes components, but they do not come one-to-one out. It can be that, you know, there's a regeneration rate. There's a certain part number, a certain design stand. From one you can use five components, from the other you can use seven components. So the variance you have for every design you need to adapt, and then you have a disassembled component, type A, and then it starts the reconditioning, and you need to monitor that in the system. So it's a quite complex setup you need to do in order to enable the whole process and to have it documented or digitalized in your ERP system in order, uh, which makes it then at the end easier to monitor regeneration rates and control your process and know, where are your levers and thresholds to improve your process. When, where's your first focus area to look at, in, in terms of process, what I said, process improvements and stable production." }, { "start": 1962.0, "end": 2009.0, "text": "Patrick Hypscher:\nAnd this takes years, I guess, to build it up and make it fit your own ERP system, huh? You mentioned and this is my last question, Thomas, you mentioned thresholds and kind of data. So when someone wants to move in that direction we meant taking back, their own products ideally with a deposit, what are data points we say th-this is something you need to collect from day one so that when the products come back and you need to manage that kind of business that you have the basis to do so. And many others kind of forgot to start measuring this data from day one. So what's important to look out for when you move in that direction?" }, { "start": 2009.0, "end": 2116.0, "text": "Thomas Meyer:\nIt's definitely the, the KPIs about, regeneration rate and, and disassembly. So what I, I think just before pointed out a little bit is how many products have I sold and how many do I g- do I get back? The core return rate we call it is of course very important and also might give then an indication if the deposit value is in the right level or not. Yeah. And then all these, reconditioning steps and repair steps you're doing to monitor what are the failure codes. What-- why do I scrap a, a component at the end? And how much, value did I already process or put into the product to come to the stage that I scrap it? Coming back to maybe your first or one of the-- your first questions why is it a business case? Of course the-- a lot of time I need for disassembly of the product. Yeah. So, so if your product, is really difficult to be disassembled then you spend a lot of labor, in, in, in retrieving the components you want to reuse. And so then you're back ar- again at the design of your product. Mm-hmm. It starts at the design and then How can I get it back? And whichreturn systems are maybe already existing in my industry or in related industry? Which companies could potentially do that for me? There are a couple out there that are focused on this core return, reverse logistic. And can this help to bring the product back? And monitoring then scrap reasons and, regeneration rates is essential for every business case." }, { "start": 2116.0, "end": 2129.0, "text": "Patrick Hypscher:\nThomas, is there a challenge you wanna share with the community where you m- might think, \"Okay maybe someone is listening right now and can share some experience to help you overcome, a challenge you face right now?\"" }, { "start": 2129.0, "end": 2178.0, "text": "Thomas Meyer:\nI think the biggest challenge we have in, in remanufacturing, is, is the fact that it's a very manual process. And looking at the demographics that are globally emerging, On, manual labor so much, but then be able to move the the existing labor force in more specific work. Not to disassemble the dirty part, but to distinguish, more on, on the quality and machine operation instead of the manual one. Yeah, so there, there is a challenge and - we looked at it in the past. Of course, robots can do a lot of things. So there's a lot of potential to, to investigate in that. And of course, if there's companies out there that have a solution, I'm happy to get in contact." }, { "start": 2178.0, "end": 2197.0, "text": "Patrick Hypscher:\nYeah. Definitely makes sense. And now I connect also the dots because the Knorr-Bremse uh, was the sponsor of the Circular Technology Award uh, this year um, at IFAT together with CIRCULAR REPUBLIC, where robotic disassembly was one of the main categories. And now I know f- yeah, it has been for a reason, yeah?" }, { "start": 2197.0, "end": 2216.0, "text": "Thomas Meyer:\nIt's been in the focus of my department for many years. Yeah. And we are also always happy to be in research projects, because I also personally think, that we need to invest time with universities, with research in setting up solutions and finding solutions for the challenges the industry is having." }, { "start": 2216.0, "end": 2222.0, "text": "Patrick Hypscher:\nThomas, thanks for investing your time into this conversation and sharing your learnings with us." }, { "start": 2222.0, "end": 2228.0, "text": "Thomas Meyer:\nThank you for having me, Patrick. It was a pleasure." }, { "start": 2228.0, "end": 2267.0, "text": "Patrick Hypscher:\nThat was the second episode of B2B Take Back. Thanks to Thomas Meyer for showing how a deposit turns a used part into something worth sending back. The one-page summary is in the newsletter at [www.circularity.fm](https://www.circularity.fm), along with the circular events coming up around the world. Next episode, we stay with hardware but change the setting. Pumps and buildings collected through plumbers and wholesalers. No contract, no deposit, no payment, and it works anyway. Until then, keep building the profitable circular economy. And please don't forget, the most abundant renewable resource is your imagination." }, { "start": 2267.0, "end": 2293.133, "text": "Jingle:\nMy name is Patrick Hypscher, and this is circularity.fm, the podcast about understanding, building, and managing circular business models." } ]