2015 Sustainability Report

IN THIS SECTION:

PRODUCT STEWARDSHIP

Focus Area

PRODUCT STEWARDSHIP

Circular Economy

SOLUTION

Giving New Life to Nonrenewable Resources

Caterpillar encourages circular economy principles through our remanufacturing and rebuild businesses.

Caterpillar strives to provide customers with quality equipment that provides the best economic proposition for their business. Our remanufacturing (reman) and rebuild businesses provide customers not only with an immediate cost savings, but also help extend life cycles and use materials more efficiently.

Remanufactured Products and Rebuilt Products

The Caterpillar Sustainable Solutions, Solar Turbines and Progress Rail Services remanufacturing programs provide customers with lower-cost products, shorter downtime and quick, dependable service options.

Rebuild programs increase the lifespan of equipment by providing customers with product updates for a fraction of the cost of buying a new machine. Rebuild programs include Cat® Certified Rebuilds, component overhauls at Cat® dealers, Solar Turbines rebuilds and Progress Rail Services rebuilds. A complete Cat Certified Rebuild includes more than 350 tests and inspections, automatic replacement of approximately 7,000 parts and a like-new machine warranty. In addition, trained dealer service professionals perform this work using genuine equipment and parts. Caterpillar provides information, data, training and service tools to help dealers make the most appropriate decisions on which parts to reuse in order to achieve expected longevity of rebuilt components. Reuse of components helps us use materials and energy more efficiently.

15%

Change in Reman Business from 2013 base year1

Reman End-Of-Life
“Take-back” Percent1

Actual end-of-life returns/eligible returns x 100

3%

Change in Rebuild Business from 2013 base year

Reman End-Of-Life
“Take-back” by Weight1

Millions of pounds of end-of-life material received

1 Data does not include Progress Rail, Electro-Motive or Solar Turbines.

The remanufacturing and rebuild programs allow customers to maximize the built-in value of their equipment by:

  • Ensuring maximum productivity
  • Increasing reliability and equipment uptime
  • Ensuring cost-effective performance
  • Receiving a like-new warranty
  • Increasing the customer’s return on their investment
  • Providing the customer with a variety of repair options to meet their service needs
  • Providing the customer with a higher resale value
  • Providing the lowest total owning and operating life cycle costs
  • Preserving the majority of energy and materials required to make the original component or machine

Given the significant role that remanufacturing and rebuild operations play in our sustainability initiatives, we created a new customer goal in 2013 around this area of the business. Using 2013 as a base year, our goal is to grow remanufacturing and rebuild business sales by 20 percent by 2020.

Recognizing Caterpillar’s Commitment to the Circular Economy

Caterpillar has long been dedicated to the most efficient use and reuse of materials – what is sometimes referred to as “The Circular Economy.” Because of that long commitment, we are pleased to be recognized as runner-up in the 2016 Circular Awards. Caterpillar was nominated to receive the Accenture Award for Circular Economy Multinational, in recognition of how we have incorporated circular economy principles across our value chain, including product development, human resources, supply chain, dealer network and customer relationships. Our remanufacturing program in particular, was singled out as an innovative implementation of circular-economy principles.

Increasing Global Access to Remanufactured Products

While global customers have driven demand for remanufactured products, not all customers can benefit from the significant cost and efficiency savings that Cat® Reman products deliver due to import and export challenges. Certain countries – mostly in developing markets – fail to recognize the value of remanufactured goods for the environment and their national economies and place trade barriers around remanufactured products.

There are typically two types of trade barriers. A tariff barrier might include excessive fees or taxes levied by a certain country that significantly increase the customer’s cost of choosing a viable remanufactured product. On the other hand, a nontariff barrier might be customs officials categorizing remanufactured goods as “used” goods, which cannot be imported under any circumstance or can only be imported after complying with special inspection, certification, licensing or other onerous requirements. Similar barriers are often faced when customers seek to export their cores and return them to Caterpillar in exchange for a remanufactured engine or component. With the durability, performance, quality and a warranty that is the same as all other Cat® engines and components, Cat Reman products should not be treated as “used” goods. Indeed, this fact has been acknowledged in a number of free trade agreements and other multinational statements such as the Asia-Pacific Economic Cooperation (APEC) Pathfinder Initiative. Countries participating in the global economy should treat remanufactured products the same way new goods are treated.

Caterpillar continues to work with policymakers around the globe to open markets and expand remanufactured options for our global customers, providing them with cost-effective, sustainable options for extending the life of their existing equipment. The company informs and educates government regulators around the world on the sustainable benefits of Cat Reman products.