Repair, New, or Refurbished?

Question: 

Your plant has a 15-year-old conveyor motor that fails every 4 months. Each repair costs $300. A new motor costs $2,500. A refurbished motor (from a specialist) costs $1,200 with a 1-year warranty. Which path do you choose? What data would change your answer? 

Answer: 

Given: 15 years old, fails every 4 months → 3 failures/year × $300 = 900/year. New = $2,500; Refurbished = $1,200 with 1-year warranty. 

Simple payback (repair vs. refurbished): 

Current annual repair cost = $900.  
Refurbished cost $1,200.  
Payback = 1.33 years.  

After 1 year, warranty covers failures. From year 2 onward, assume refurbished failure rate is similar to current (3 failures/year) → another $900/year. Still cheaper than $2,500 for new. 

Decision: Choose refurbished motor based on current data. 

What data would change answer? 

▪ If the conveyor is a production bottleneck where downtime cost is >$500/hour → new motor (higher reliability) may be justified. 

▪ If the refurbisher's warranty excludes labor, adding $150/failure for installation → refurbished TCO rises. 

▪ If the motor is obsolete and refurbisher uses scavenged parts with unknown remaining life → avoid. 

▪ If new motor efficiency is 10% better, then electricity savings alone could favor new motor over 5+ years.

 

When to Choose Which?

Sample tutorial question and answer:

Question: 

Under what conditions would you recommend refurbishing over remanufacturing for a fleet of industrial power tools? 

Answer: 

Refurbishing is recommended over remanufacturing when: 

• The core structure and motor remain within original tolerances, but only wear items (brushes, switches, grips, bearings) need replacement. 

• Downtime is critical—refurbishing is faster because it avoids full disassembly to the last screw. 

• The tools are not yet discontinued by the OEM, so replacement parts are still standard. 

• The goal is cost containment with moderate extension of useful life (1-2 additional cycles), rather than bringing the tool to "like-new" performance. 

• The fleet is large and identical, allowing batch processing of common wear parts without requiring full rebuild of every subassembly.

 

STO Answer Book

Here's the book blurb I've crafted for the upcoming Answer Book, which is really a companion tutorial to Solutions to Obsolescence (STO):

The Answer Book is the companion every reader of Solutions to Obsolescence needs. It takes the 15 chapters of the main textbook and turns each set of discussion questions into a working session. You’ll find not just answers, but the reasoning pathways—the trade‑offs, the numbers, the risk calculations, and the contract clauses that separate a confident retrofit specialist from a hesitant one.

From TCO showdowns (new vs. refurbished lighting ballasts) to ethical dilemmas (third‑party remanufactured medical devices) to nitty‑gritty engineering (inertia ratios, thermal spray coatings, and VFD inrush currents), this book walks you through the decisions that obsolescence experts face daily.

Whether you’re a plant engineer, a remanufacturing line manager, a procurement professional, or a student of circular economy, the Answer Book will cement the concepts—and give you the scripts, formulas, and checklists to apply them immediately.

• TCO calculations for real-world decisions
• Root cause analysis for warranty returns
• Scripts for plant manager conversations

No fluff. No evasion. Just solutions. 

A Companion Book in the Works...

Readers who have recently purchase the book Solutions to Obsolescence would no doubt have noticed the discussion questions posed at the end of every chapter. Questions are a means to help readers understand and solidify what they have read. 

This is also a departure from my usual style of writing, since remanufacturing was new to me when I started out to learn the subject through researching and writing. It has tremendously enabled me to not just know how the three R's are interrelated to solving obsolescence, but also appreciate the dynamics between them in ways I did not preceive before.

Again, besides a visual aid like the book cover above, I will need a book blurb to help me focus on my writing. I anticipate that this will be a smaller workbook than the textbook, but it will no less be as informative and practical with many full-colored illustrations. I hope to finish and publish it in 3-4 weeks' time, if schedule allow.

So stay tune for more updates...

 

Release Announcement!

If you have been following the progress of my latest book writing attempt, you will be delighted to know that it has just been released and is available for order on Amazon KDP.

The book is currently available as paperback in full-color edition. It will also be available as hard cover in full-color, but because Amazon's hard cover does not support 8" x 10" format, I will need to adjust the manuscript to fit the nearest available size. This will take some time so if you can't wait, then order the paperback.

Printing in full-color is much more costly (3-4 times that of black on white), so I cannot sell at the normal low price like I did for the other engineering books. But I have kept the price as afforable as I can—for now as goodwill and promotion period, with a minimum royalty margin. So get this book as soon as you can. Click on the book cover to go to the Amazon order page.

The hard cover edition should be available in 3-4 weeks time but it will be more costly as I intend to use premium colors for this book format (first time trying). Still, I hope to keep the price below $100 (USD, of course).

That's all for the update, for now...

Ps: There will not be a Kindle ebook edition (at least not in the near foreseeable future).

The Final Lap...

I'm into the final lap of writing my seventh engineering book—the three R's of Solutions to Obsolescence. These include Appendices (Comparison Matrices, Glossary of Terms, and Strategy Selection Card), Acknowledgements, and a comprehensive Index for better reference.

I intend to just release a full-color, hard cover edition. It will not be as "affordable" as the other engineering books but I will keep the price below $100, if possible. Color printed books are not cheap to begin with, and for Amazon KDP it can come up to 3-4 times that of plain black and white print edition.

But I assure you, my readers, that it will be worth every cent to get a copy of this book when it is ready. The amount of work put in to ensure quality content and images are definitely not mesasured in dollars and cents.

I look forward to your support, through purchase and by word-of-mouth recommendations. It's been a grilling yet rewarding journey for the past couple of months. I believe there will be more engineering books to follow, if things work out for my collaborations with ASTER and the Singapore Army.

So stay tune for new updates.

The Hidden Engine of Refurbishing

A novice refurbisher focuses on cleaning and repairing products. A professional refurbisher focuses on flow—a steady, predictable stream of incoming used products (cores) and an efficient, low-cost channel for delivering finished goods to buyers. Refurbishing creates a circular supply chain. Unlike linear manufacturing (raw materials → factory → use → disposal), refurbishing feeds used products back into the value stream. 

If you really want to go into the refurbishing business, you'll need to know about supply chain and reverse logistics, which include the following areas:

▪ Sourcing cores (where used products come from) 
▪ Reverse logistics networks (getting cores to your facility) 
▪ Inventory management (balancing supply and demand) 
▪ Quality variability (handling the unknown) 
▪ Outbound logistics (selling and shipping refurbished units) 

▪ Metrics for a healthy refurbishing supply chain 

I've listed some references for further reading:

▪ Rogers, D. S., & Tibben-Lembke, R. S. (1999). Going Backwards: Reverse Logistics Trends and Practices. Reverse Logistics Executive Council. 
▪ Guide, V. D. R., & Van Wassenhove, L. N. (2009). "The Evolution of Closed-Loop Supply Chain Research." Operations Research, 57(1), 10-18. 
▪ International Organization for Standardization. (2018). ISO 14021: Environmental labels and declarations—Self-declared environmental claims (includes guidance on refurbished claims).

Hope that helps.

 

The Refurbishment Window

Not every product is a good candidate for refurbishing at every point in its life. The figure above illustrates the concept of the refurbishment window. Refurbishing is most valuable when a product has passed its early reliable life but still has significant structural value remaining.

Safety Warning: Never refurbish safety-critical components where failure could cause injury or death. This includes brake components, airbags, medical implants, pressure vessel seals, and aircraft structural parts. Refurbishing is for convenience and cost savings—not for life safety.

The Repair Trap 

One of the most common errors in asset management is the repair trap: repeatedly repairing a product because each repair has low upfront cost, while ignoring the accumulating total cost and downtime. Refurbishing resets the clock at a fraction of replacement cost as the figure below shows:

Despite the virtues of refurbishing, replacement is sometimes unavoidable. So when do you choose repair or replacement over refurbishing? The decision tree below might help:

The choice between repair, refurbish, and replace depends on four criteria: required reliability, available time, budget, and strategic value. 

 

The Refurbishing Workflow

If you're doing a one-off refurbishing job in your daily repair work, then a workflow may not really matter much. But if you're thinking of making refurbishing a sustaining business model then it is imperative to adopt a proper process to ensure success.

Refurbishing follows a repeatable workflow, though the depth of each step varies by product type. Of interest is the first step: Intake/Triage. What exactly is triage, you might ask. In refurbishment, it refers to the initial, rapid assessment and sorting of returned, damaged, or aging items to determine the most cost-effective action: repair, refurbish, resell, or dispose. This process prevents wasting resources on irreparably damaged items and prioritizes those that can be quickly returned to the market. 

You might not realize it but intake triage is the most economically critical stage. A misclassified unit will lose money at every subsequent step. Here's an economic triage rule you would do well to adhere to: 

A product is economically viable for refurbishing if (Resale value of refurbished unit) – (Cost of parts + labor + overhead) ≥ 30% of resale value. That's the minimum margin threshold and it varies by business model. If the margin falls below this threshold, the product is better used as a donor unit or sent to recycling.

A "donor" unit in refurbishing refers to a used, broken, or identical device (often a hard drive, appliance, or electronic component) that is utilized to supply parts for the repair of a "patient" device. This process allows technicians to restore non-functional equipment to working condition by replacing damaged, rare, or obsolete parts that are no longer produced. It's also referred to as "parts harvesting".

It is also important that each unit received during the intake has a unique tracking identifier (serial number, barcode, or RFID). This ID follows the product through all six stages, creating an audit trail. It ensures traceability, compliance, and quality control, providing visibility into the "who, what, and when" of the refurbishing process. 

Bet not many know of such details involved in starting a refurbishing business. There's more but I'll stop here for now. Once I sort out the workflow process in my upcoming book, you'll have the needed information all in one place.

 

Is Refurbishing Viable?

Refurbishing is not suitable for every product. The table above summarizes the sweet spot. The rule of thumb is simple: If a product's value is more than 3-5 times the cost of common replacement parts, and safety does not depend on its exact original tolerances, refurbishing is viable. 

However, refurbishing is not a panacea. Engineers and asset managers must recognize its boundaries. Refurbishing does not reset the fatigue life of mechanical components. A refurbished fan motor with new bearings still has an aged stator winding. Intermittent faults or degraded components (e.g., capacitors near end of life) may not be detected. Also, a refurbished product typically lasts 30-60% as long as a new one, and refurbished items usually have shorter warranties with added conditions.

Always do your homework and be realistic in your expectations.

 

Planned Obsolescence

How many ever heard of this term? If you hear remarks like, "They don't make things like they used to." and "Things don't last as long as they did in the past."—then you'll know what I mean.

Planned obsolescence is a profitable but short-sighted strategy: it drives repeat sales by intentionally limiting a product's lifespan, yet it shifts hidden costs onto consumers and the environment. While it can sustain business cycles, it often undermines trust, encourages waste, and runs counter to more sustainable, circular approaches to design and manufacturing.

The term gained currency in the 1950s, but the concept is older. Manufacturers discovered that durable products—products that lasted decades—limited repeat sales. The solution was to design products with intentionally limited lifespans. This is accomplished through one or more of the mechanisms listed in the above table.

Refurbishing directly counters systemic and functional obsolescence by keeping products in service. It does little against psychological obsolescence—you cannot refurbish a status symbol back into fashion. 

What is your take on this manufacturer-related issue?

 

What's the Difference?

Since I'm setting out to write a book about the three R's, it's worth establishing a clear boundary at the outset. (see above table)

Refurbishing is the most accessible of the three strategies: 

• It requires no specialized tooling (screwdrivers, cleaning supplies, basic test equipment) 
  
• It can be performed in a small workshop or even a garage 
• It has the lowest barrier to entry for small businesses and entrepreneurs 
• It delivers value quickly (days, not weeks)

Refurbishing is also the most scalable in terms of volume. A remanufacturing line for automotive engines is a capital-intensive operation. A refurbishing line for laptops can be set up in a warehouse with rented tables and hired labor. 

And refurbishing is often the only economically viable strategy for low-to-medium value products. No one remanufactures a $50 coffee maker. But thousands of coffee makers are refurbished every day. In short, refurbishing works because it aligns economic incentives with life extension. It is not charity. It is good business. 

 

Refurbishing

In my previous company, I've done quite a fair bit of refurbishing work on top of PCB testing and repairs. One such project I still recall fondly was the control panel of a lighthouse installation on the controversial island-rock of Pedra Branca.

The unit was sent to my work centre for repair—not just the PCB within but also the front panel which suffered defacing from constant use. After assessing various options, I reckoned that the easiest and safest way was to recreate the panel layout using Microsoft Visio, print out in color and laminate the pieces, which were then affixed over the original damaged artwork using double sided tapes.

Crude, but it worked and was aesthetically appealing as far as the customer was concerned. That was my first attempt at refurbishing and I was quite pleased with the outcome.

Industrial refurbishing, however, is more than just a cosmetic operation. Once you define what refurbishing is as the starting point of combating obsolescence, the process—from assessment to aesthetics becomes obvious. Then the decision naturally rests on when to choose refurbishing over repair and replacement.

This is the route I'm taking as I started out to write for the first of three parts for my upcoming book on Solutions to Obsolescence. It'll be a good idea to also throw in an actual case study to cement the practice, if necessary.

We'll see how that works out...

 

The Three R's Relationships

The relationships between the three R's can be quite intricate for the uninitiated to the world of obsolescence. So I've created a simple venn diagram to illustrate their intertwining similarities and differences.

As a first cut, I've come up with a preliminary paragraph for my book blurb:

Obsolescence is not the end—it’s an opportunity.

Every year, millions of tons of equipment—from industrial machinery and medical devices to electronics and building systems—are discarded not because they have failed, but because they are “outdated.” In an era of supply chain fragility, rising material costs, and mounting environmental pressure, the ability to extend product life is no longer a niche skill—it is a strategic imperative.

I will not divulge much on what I intend to cover as there are still grey areas that need to be sorted out. In fact, writing on a topic of this magnitude can be quite a challenge. Perhaps if I have the opportunity to explore further with ASTER's business model and process, it will become clearer what direction the book should take.

Until then...

The Three R's in the Work

I've spent a couple of days designing the front cover for my next engineering book. I decided that the best way to accelerate and build my knowledge on the subject of remanufacturing is to write a book on it, alongside two others I'm familiar with—refurbishing and retrofitting. Hence the title of the book.

Back in 2009, my former company had sponsored me to attend a course "Diminishing Manufacturing Sources and Material Shortages (DMSMS)" conducted by Donald Seger. This was in view of the threat of obsolescence stemming from a shortage of critical electronic components and the importance of stocking up based on predict forecast of the repair works we were doing.

On hindsight, it was an eye-opening experience though I did not link it to the three R's as the plausible Solution to Obsolescence. Now that I revisited the subject after my eventful visit to the ASTER facilities, I'm beginning to see how all these things tie up.

As usual, I will need to write a book blurb to keep me focus on what I want to write. Chapter outline will then follow, subject to changes as the work progresses, of course. It will be both interesting and challenging. And I suspect it will take me beyond electronics—well into the broader industries facing this same problem.

We'll see how it goes...

Solutions to Obsolescence

My recent visit to ASTER has set me thinking about the problem of obsolescene, not just in the electronics industry but other sectors as well—commercial and military.

Granted, in my previous company I had taken on several jobs by the military to address their obsolescence concern, albeit on a smaller, customized scale, which included refurbishing and retrofitting their aging equipment. But ASTER has up the ante by doing remanufacturing—which is on an institutional scale.

It's not hard to see that there are three options to the obsolescence problem:

1. Refurbishing
2. Retrofitting
3. Remanufacturing

So which option is suitable? That depends on the kind of issue you have on hand. If it's just  low-cost cosmetic and basic functional restoration, then refurbishing is the way to go. If it's adding new features to an old platform, retrofitting would fit the bill. But if you want to return a high-value asset to like-new reliability with a full warranty, consider remanufacturing—but be prepared to fork out cash.

In other words, refurbishing is the light-weight solution, retrofitting provides strategic upgrades, while remanufacturing entails deep industrial processes.