Remanufacturing as Disruptive Innovation

Kevin Surace: Remanufacturing will play a huge role alongside autonomous transport, artificial intelligence, robotics, and other game changers in a new era of sustainability.

By Niels V Christiansen, US Editor

In the face of the threats from global warming and unsustainable use of resources, Kevin Surace, entrepreneur, innovator, visionary, and keynote speaker at the RIC-RIT World Remanufacturing Conference on October 9-10, believes that we can still save the planet and ourselves from global warming by reimagining everything and inspiring game changing disruptive innovation.

“Remanufacturing can be disruptive innovation in and of itself,” he said. The definition of disruptive innovation is that you not only disrupt the industry you’re in, but you can also disrupt other adjacent industries at the same time. It’s a really powerful and amazing idea.”

THINKER AND DOER

Surace is recognized as one of the thinkers and doers behind the change that’s going to come. He may not have the name recognition of Apple’s Steve Jobs, Microsoft’s Bill Gates or Tesla’s Elon Musk, but his impact is wide ranging across many industries.

Surace helped pioneer both the smartphone and the digital voice assistant. He is a leader in developing and applying artificial intelligence, AI, and is currently the Chief Technology Officer of Apvance.ai, using AI in revolutionary automated testing of computer programs.

He has 84 patents to his credit, spreads his ideas globally as a speaker at TED talks, academic, business, industry, and science conferences, and in front of lawmakers. He is one of the most famous and influential graduates of Rochester Institute of Technology, (RIT) where he now serves on the Board of Trustees.

EMPIRE STATE BUILDING

Perhaps his highest accolades were bestowed on him after a decade long foray into the construction industry and remanufacturing. As CEO of Serious Materials, Surace led the development of alternative environmentally friendly building materials in an attempt to disrupt the most environmentally challenged industry in the world, construction.

In the highest profile Serious Materials project, Surace and his team set up a remanufacturing operation on the fifth floor of New York’s Empire State Building and remanufactured the building’s 6,556 windows into environmentally friendly replacements. Window energy efficiency increased by 400%. The project paid for itself in four years in energy cost savings.

Surace was named entrepreneur of the year in 2009 by Inc Magazine and recognized as one of 15 innovators of the decade by the CNBC financial news TV channel, among many other honors.

The Golisano Institute for Sustainability at RIT, of which Surace was a leading proponent, incorporated the innovation from Serious Materials into its structure when it was built in 2012, and Surace was inducted into the RIT Innovation Hall of Fame.

A renaissance man with a separate career in the music industry near his home in Sunnyvale, California, Surace’s extraordinary journey into future technologies and sustainability solutions led him to Appvance.ai seven years ago.

THE FORCE OF DISRUPTION

“We try to use disruptive innovation in Silicon Valley in the way we work,” he told Reman World. “Immediately, most people are going to be thinking that anything disruptive is not going to be possible.

“If you were going to heal metal in an airplane, a car or engine, people are going to say, ‘wow, that’s impossible. Somebody would have started doing it years ago’. But we can totally disrupt multiple industries if we can figure out how to heal cracks in metal for a certain cost, and the amount of energy we use will be substantially lower than the energy used rebuilding the whole thing from scratch.

“So now we have things like additive manufacturing that can make us think about how to fill cracks in metal that we wouldn’t have thought of before.
“We’ve got other ways to add molecules whether to metals or plastics. So, where most people would have said, ‘oh we just make the thing over again for 82,000 dollars’, now we can fix it for 100 dollars or 1000 dollars.

“So, it seems disruptive, it seems impossible, but as long as you’re not breaking the laws of physics, don’t count it out.”

DISRUPT AND REPLACE

The telephone displacing the telegraph and mass-produced cars from Henry Ford’s assembly line displacing the horse and buggy are classic examples of disruptive innovation from long before the term was coined.

More recent examples:

  • Digital photography, revolutionizing the way we create images and largely wiping out film photography
    • The computer
    • Data Analytics
    • The Google search engine
    • The internet, disrupting newspapers and many other products
    • Social media, perhaps disrupting society as a whole.

DON’T STOP THINKING ABOUT DISRUPTION

Surace says he never stops thinking about all the places we can be disruptive in every part of our lives. He believes that remanufacturing is a big part of this conversation.

Inside the remanufacturing industry itself, the disruptive power of AI and
robotics may be the answer to some of remanufacturing’s greatest challenges, starting with taking over functions currently hampered by workforce shortages. More generally, there will be new demands for remanufacturing as industries are disrupted.

DRIVERLESS FUTURE

Remanufacturing is likely to be part of the business model in the advent of driverless vehicles – a whole new way of disruption, according to Surace. The car business, where people own or lease their own cars, will transition to an on-demand transport business, resulting in high utilization rates, 80-90 percent fewer vehicles – all electric – on the road, and dramatically lowered cost per driven mile or kilometer.

Some auto companies will disappear, and with little down time, each vehicle will be driving more than 100,000 miles per year and more than a million miles in its lifetime.

“So, all of a sudden,” Surace said, “there will be new opportunities to remanufacture parts that need to last a million miles.”

IT’S THE ECONOMICS, STUPID!

After decades of leading the charge, Surace says he has learned not to rely on government action or idealism to drive progress.

“Everything shouldn’t be driven by economics,” he said.” But I am no longer as stupid as I might have once been, to think that people are going to do anything that isn’t economically viable. Companies don’t. People don’t. That’s why we have to figure out from the start how we make doing something more profitable than not doing it. Remanufacturing a product and getting someone to pay you almost the same money the second time when you didn’t have to make it from scratch, that’s fantastic.

Rochester Conference Preview, Reman World October 2019 issue

PROPOSED CHANGES TO NEC 2020

Impacts on Reconditioning Companies

Reconditioning companies across the U.S. are facing a potential threat that will negatively affect any business with a critical electrical infrastructure.

The National Fire Protection Association (NFPA) recently presented to the American National Standards Institute (ANSI) the updated NFPA-2020 National Electric Code (NEC), which they had recently revised through the required rounds of its standards development process.

Suggested changes must be proposed and approved during the public input stage and then published for review and comment, according to the American National Standard (ANS) process. However, there are 17 changes to the reconditioned equipment section that were proposed in the standard after the public comment stage.

The Standards Development Process

The Regulations Governing the Development of NFPA Standards establishes the procedure for the NFPA standards development. All NFPA standards are revised and updated every three to five years in cycles that begin twice each year, according to the NFPA standards development process.

Each revision cycle proceeds according to a published schedule which includes final dates for each stage in the standards development process, according to NFPA. The four fundamental steps in this process are:

  1. Public Input
    2. Public Comment
    3. NFPA Technical Meeting (Tech Session)
    4. Standards Council Action (Appeals and Issuance of Standard)

Reconditioned Defined

The National Electric Manufacturers Association (NEMA) Policy on Reconditioned Electrical Equipment states that reconditioned equipment is defined as electromechanical systems, equipment, apparatus or components that are restored to operating conditions.

This process differs from normal servicing of equipment that remains within a facility, or replacement of listed equipment on a one-to-one basis, according to the NEC.

However, the term reconditioned is incorrectly referred to as rebuilt, refurbished or remanufactured in the NEC 2020 revisions.

Proposed Changes

The Remanufacturing Industries Council (RIC) wrote a letter to the NFPA to request that they would pass on the 17 proposed changes until the next code making cycle because of their potential harm to the industry. Postponing the proposed changes until the next coding cycle would allow the industry at large to comment.

Christel Hunter states several of the proposed changes in her presentation at the 2019 PEARL Conference:

  • Reconditioned equipment will be identified as “reconditioned” and the original listing mark will be removed unless it is reconditioned by the owner or operator as part of regular maintenance
  • The following equipment cannot be reconditioned: equipment that provides ground-fault circuit interrupter protection for personnel, arc-fault circuit interrupter for protection, ground-fault protection for equipment, and eleven other types of equipment
  • The reconditioning process shall use design qualified parts verified under applicable standards and be performed in accordance with any instructions provided by the manufacturer
  • Panelboards shall not be permitted to be reconditioned
  • Reconditioned switchgear shall be listed, or field labeled as reconditioned, and previously applied listing marks, if any, within the portions reconditioned shall be removed

Rippling Effect

According to the most recent International Trade Commission survey, the size of the remanufacturing sector of our economy represents at least $43 billion annually, as well as providing hundreds of thousands of jobs in our economy.

The proposed changes to remanufactured equipment, although well intentioned, will not only hurt reconditioning companies, but also the U.S. manufacturing industry for multiple reasons.

For example, the industry will experience a restricted supply of readily available and safe electrical distribution equipment and an increase of business interruption claims. There will also be an increase in the cost of acquiring, engineering, and scheduling extended shutdowns to replace entire substations.

Take Action

The deadline to file a notice of intent to make a motion to reject these proposed changes was April 26, 2019. Voting members of NFPA were also able to attend the Technical Association meeting in San Antonio, Texas, on June 20 to voice their concerns and vote for certified amending motions.

It is still possible to file an appeal with the NFPA Standards Council by July 10, 2019. The Standards Council will be meeting from August 5 to August 7 in Quincy, Massachusetts, this year to provide final approval on the proposed changes to the NEC standard.

Visit the NFPA website to learn more about the NFPA Standards Council and their meetings.

Republished with permission of National Field Services. Originally published on June 27, 2019.

Keynote Speaker at PEARL Conference Provides Roadmap to Achieving a Sustainable Future

WHEAT RIDGE, CO – “If it is our goal to safeguard an environmentally stable future, then it is imperative that we take a close look at remanufacturing equipment with the intent of returning it into service, keeping it in the system rather than throwing it away,” said Michael Thurston, Ph.D., Technical Director, Golisano Institute for Sustainability, Rochester Institute of Technology (RIT) and technical leader for the Remanufacturing & Reuse arm of the REMADE Institute, in his keynote speech, Remanufacturing Development in the USA, at the Professional Electrical Apparatus Reconditioning League’s (PEARL), 21st Annual Conference and Exhibition, held in Greenville, SC, April 13-15.

Thurston noted in his presentation that The REMADE Institute is a national coalition of leading universities, companies, trade associations and national labs, focused on reducing the material and energy footprint of U.S. manufacturing. Thurston cited REMADE’s recently released Technology Roadmap, which includes a focus on best practices in remanufacturing equipment of all types including electrical apparatus. The key to REMADE’s Technology Roadmap is that through the development and integration of advanced remanufacturing technologies, there are multiple opportunities for reuse and end-of-life products and components and materials, improving material and energy efficiency as well as cost effectiveness.

“For PEARL, the REMADE Technology Roadmap is significant,” said PEARL president Howard Herndon. “It closely aligns with PEARL’s mission of the past 20 years and to be supported by research developed by such an esteemed and scholarly institute affirms our organization’s ongoing work.

While it is technologically complicated to recondition equipment that is to be reintroduced into the infrastructure, it is companies such as members of PEARL that are leading the way to ensure electrical equipment brought back into service is safe and reliable. Herndon emphasized the importance of three key elements in the REMADE Technology Roadmap that Thurston identified in his presentation to ensure that reconditioning processes are clearly defined and accurate: Training and workforce development focused on cleaning, repair and condition assessment is an essential step in the remanufacturing/reconditioning process; Cost effective cleaning of electronics is integral to the safe operation of reconditioned equipment; Assessment of operational and energy efficiency of remanufacturing processes will lead to the installation of reliable equipment.

“One of the benefits of being a PEARL member is finding additional resources that can lead to best practices when reconditioning electrical equipment,” said Herndon. “Providing information about and using the REMADE Institute’s Technology Roadmap is in keeping with our mission to help our members focus on what’s most important: reintroducing reconditioned electrical equipment into our infrastructure that is safe and reliable.”

For more information on PEARL and the reconditioning industry, visit pearl1.org.

PEARL’s Technician Certification Raises the Bar in the Reconditioning Industry

The Professional Electrical Apparatus Reconditioning League (PEARL), a national trade organization for companies that supply quality surplus and reconditioned electrical equipment, offers a Technician Certification program for those individuals employed by full voting member companies of PEARL looking to become recognized as Certified Electrical Equipment Reconditioning Technicians. As a standards-bearing organization, PEARL’s mission is to ensure that reconditioned electrical equipment reintroduced into the marketplace is safe and reliable. A benefit of PEARL membership, companies that encourage their employees to become PEARL- certified are leading the way in the industry by helping to fulfill PEARL’s overall mission. Not only does certification raise an employee’s proficiency level, it also gives PEARL member companies who employ certified technicians a marketable edge and elevated status within the industry.

“PEARL’s Technician Certification program is an important part of the organization’s mission to promote best practices throughout the electrical equipment industry,” said Howard Herndon, president of PEARL. “Voting member companies of PEARL that encourage their employees to become certified are committed to making certain that reconditioned equipment meets PEARL’s high standards for safety and quality. But advocating for program participation is more than a company’s commitment to the industry – it’s a commitment to employee education and growth.”

PEARL launched its Technician Certification program in 2014 and currently offers Level I and Level II certifications to employees of Full Dealer and Full Service PEARL member companies, which are designated voting members of the organization. Through a combination of practical, hands-on experience, training, and successful completion of an online certification exam, individuals obtaining certification through PEARL will have demonstrated their ability to perform specific reconditioning tasks by virtue of their technical knowledge and experience. Certified technicians will also be considered ‘qualified’ technicians. Qualified technicians are defined in the 2017 ANSI/PEARL Electrical Equipment Reconditioning Standard as individuals who have “received training in and have demonstrated skills and knowledge in one or more of the following: construction, assembly, testing, inspection, and/or operation of electric equipment and installations and the hazards involved. Qualified technicians shall be capable of evaluating electrical equipment to determine if it functions to manufacturers’ published specifications if available, and industry standards.”

“The positive end results of certification are countless,” Herndon emphasized. “Certification helps boost employee morale, decreases accidents and associated costs, and reduces warranty claims. For an individual, certification can represent that next step forward in their career path while enhancing their professional growth.”

More information about PEARL’s Technician Certification program can be found on PEARL’s website atwww.pearl1.org/Education-Technician-Certification-Program. To find out how to become a full voting member of PEARL, visit www.pearl1.org/About.

Key Role of Supply Chain in Disaster Recovery Stressed

WHEAT RIDGE, CO – “Grid and critical infrastructure failure are what keep me up at night, because it is estimated that it would take the U.S. less than a week to fall into anarchy from such a disaster,” concluded Chloe Demrovsky, executive director of the Disaster Recovery Institute International (DRI) in her keynote speech at the Professional Electrical Apparatus Reconditioning League’s (PEARL) 20th Anniversary Conference, held in Newport Beach, Ca., April 5-9.

Citing that power outages alone cost the U.S. some $96 billion each year, Ms. Demrovsky stressed the importance of preparedness for and recovery from disasters in her speech: “Resilience is a Competitive Advantage: How to be a Reliable Supplier.”  The U.S. Department of Homeland Security defines resilience as the ability to prepare for and adapt to changing conditions and to withstand and recover rapidly from disruptions, such as attacks, accidents, or naturally occurring threats or incidents.

“With the theme of our conference this year being ‘Disaster Recovery,’ we were particularly interested in hearing Ms. Demrovsky’s insights into the key role that the supply chain plays in this essential recovery process,” noted outgoing PEARL President Doug Powell. “PEARL supports and maintains the integrity of electrical systems by developing certified training programs, being included in the National Electrical Code and creating a reconditioning standard. This is what PEARL is all about and is how we as an industry strive to be the best-prepared supplier during emergencies and disasters.”

Ms. Demrovsky cited six emerging supply chain risks: cyberattacks, communications failures, political/social unrest, pandemic, critical equipment failure, and aging infrastructure. From here, she stressed that the focus needs to be on the impacts, not on the causes of the impacts. She identified four impacts that a disaster can create: Facilities issues, such as a flood or fire; Business or operations issues, such as a transit strike or supply chain missteps; Technology, which refers to IT issues; Organizational issues, such as mergers and acquisitions.

Summing up the essential need for planning, Ms. Demrovsky shared a seminal case study: In 2000, a minor fire in a plant that provided the majority of microchips to Nokia and Eriksson resulted in a total destruction of the microchips, due to their sensitivity to smoke damage. Nokia had a plan in place to stay in business if such a disaster occurred with a key supplier; Eriksson did not. As a consequence, Nokia went on to succeed in business. An additional outcome of this case study was the realization that businesses need to add resiliency clauses to their business contracts.

“PEARL provides an alternative for the industry by offering safe, reconditioned equipment that can be used to quickly and effectively recover from a disaster, be it equipment failure, electrical outages, or natural disasters,” said Mr. Powell. “The organization is proud of the integral role it plays in disaster recovery and unites suppliers in order to help ensure that trusted equipment can be delivered to a facility in need as quickly as possible.”

For more information on PEARL and the reconditioning industry, visit: pearl1.org.

Reconditioned Electrical Equipment Now Included in the National Electrical Code®

WHEAT RIDGE, COLORADO (March 17, 2017) – Two significant code revisions recommended by the Professional Electrical Apparatus Reconditioning League (PEARL) were adopted for inclusion into the latest version of the National Electrical Code®, 2017 Edition (NEC®). These revisions represent the first time since its inception in 1897 that the NEC® makes reference to product condition, specifically allowing for reconditioned, remanufactured, and refurbished electrical product.

“The revisions underscore that reconditioned electrical equipment is considered valuable, safe and reliable for use in the field,” said David Rosenfield, past president of PEARL. “When the National Electrical Manufacturers Association (NEMA) opened their doors to PEARL to discuss their position and acknowledgment of the demand and need for reconditioned electrical equipment, we felt supported and empowered to proceed with our proposed revisions. PEARL’s change proposals were intended to present reconditioned equipment as a substantial part of the sourced market and to identify that there are certain essential requirements with products falling into the reconditioned class.”

The NEC® 2017 Edition, which was published in August of 2016, includes PEARL’s proposed changes to NEC® rules 110.3 and 110.21. PEARL’s contribution to NEC 110.3 – Examination, Identification, and Use of Equipment – ensures that reconditioned equipment is acknowledged and considered for use in installations. PEARL’s revision to NEC 110.21 – Equipment Markings-Reconditioned Equipment – requires reconditioned equipment to be marked with the name, trademark, or other descriptive marking that identifies the organization responsible for reconditioning the electrical equipment. The date of reconditioning is also required to be marked on the equipment.

According to Howard Herndon, incoming president of PEARL, and NEC® code revision champion, the impact of these changes to the electrical equipment industry is extensive.

“As a standards developer and educator, PEARL is fully committed to the betterment of the industry,” said Herndon. “Our organization’s Certified Technician program is focused on teaching professionals that it is imperative to use proper procedures during an installation. It is equally important that the equipment being used meets the highest standards. Since the NEC® is the authoritative voice in the industry, including reconditioned equipment in the NEC®helps to alleviate misconceptions about reconditioned equipment and its capabilities.”

With PEARL celebrating its 20th anniversary as an organization this year, the adoption of these code revisions in the NEC® is a noteworthy milestone and has U.S. infrastructure implications as well.

“As equipment ages in the U.S., it can be challenging to acquire replacement parts from manufacturers, especially if the equipment has been in place for so long that the replacement parts are no longer made,” said Rosenfield. “Acknowledgment of reconditioned electrical equipment in the NEC® is a ‘seal of approval’ providing a level of assurance that reconditioned equipment is a valuable and reliable component of the electrical system, and its usage is indispensable for maintaining and strengthening our country’s infrastructure.”