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Confidential Green 1 Making Sustainable Progress Possible Joe Allen General Manager Director of Sustainable Development Cradle-to-Cradle Achieving the Vision Through Remanufacturing
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Cradle-to-Cradle - New York Product Stewardship … 2008...Cradle-to-Cradle Achieving the Vision Through Remanufacturing Confidential Green Making Sustainable Progress Possible 2 *

Jul 31, 2020

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  • Confidential Green1Making Sustainable Progress Possible

    Joe AllenGeneral ManagerDirector of Sustainable Development

    Cradle-to-CradleAchieving the Vision Through Remanufacturing

  • Confidential Green2Making Sustainable Progress Possible

    * 2007

    $44.9 billion* in salesDistribution to morethan 200 countries in23 time zones

    101,000 Employees181 Dealers120,000 Dlr. Employees

    Global customer support over

    multiple product life cycles

    Over 400 facilities in 50 countries

    Total Life Cycle Management

    Reduce Reuse RecycleReduce Reuse Recycle

  • Confidential Green3Making Sustainable Progress Possible

    Remanufacturing: The process of returning

    end-of-life products to original “same-as-new”

    condition in a manufacturing environment.

    Remanufacturing… Advanced RecyclingRemanufacturing… Advanced Recycling

    End-of-Life CoreLogistics

    Remanufacturing

    OutboundLogistics

    End Users / Dealers / Distribution

    The Reman Cycle

    Reduce Reuse Recycle

    30 years of Remanufacturing30 years of Remanufacturing

  • Confidential Green4Making Sustainable Progress Possible

    End-of-Life“Take Back”

    Advanced RecyclingTechnology

    New Material Assembly & Test

    The Reman Business Model…The Reman Business Model…

    Reduce Reuse Recycle

    Products returned to original “same-as-new” condition - or better…

  • Confidential Green5Making Sustainable Progress Possible

    Remanufacturing…Remanufacturing… Same-as-new quality & warranty

    Fraction-of-New price

    2.2 million units in 2007

    Over 7,000 part numbers

    2 billion* pounds returned per year

    15 primary facilities in 8 countries

    Over 6,000 employees*

    * Includes Progress Rail

    Meeting Customer Needs

  • Confidential Green6Making Sustainable Progress Possible

    Shock Wave Cleaning

    Metal Deposition

    Thermal Cutting

    Thin Film Coatings Molten Salt Bath Cleaning

    Head Recasting

    Investments in Technology & Systems…

    Products brought back to original “same-as-new” condition…

    A Strategic Approach

  • Confidential Green7Making Sustainable Progress Possible

    New Reman

    Engineering prints

    Same-as-New functional specs.

    Manufacturing quality systems

    Same-as-New factory warranty

    Design-for-remanufacturability

    �����

    ����

    CoreLogistics

    Remanufacturing

    OutboundLogistics

    Dealers / Distribution

    The Reman Cycle

    Original “Same-as-New” Quality & PerformanceOriginal “Same-as-New” Quality & Performance

    A Strategic Approach

  • Confidential Green8Making Sustainable Progress Possible

    Exchange Transaction example

    End-of-Life CoreLogistics

    Remanufacturing

    OutboundLogistics

    End Users / Dealers / Distribution

    The Reman Cycle

    Coke $1.00Bottle deposit $0.25Total Cash Outlay $1.25

    Bottle Return ($0.25)

    Net Cost $1.00

    No Return = No RemanNo Return = No Reman

    A Commitment to “Take-Back”

  • Confidential Green9Making Sustainable Progress Possible

    CORERETURNS

    � 2.2 million “cores” returned in 2007

    � Preservation of ~ 85% of original energy “value add”

    � Approaching “zero landfill” status

    RemanProducts

    65% by weight

    OTHER MILLS& FOUNDRIES

    25% by weight

    SCRAPMETAL

    CATFOUNDRIES

    10% by weight

    Extended Producer Responsibility…Extended Producer Responsibility…End-of-Life Return Rates

    Reman 93% New 0%

    CoreLogistics

    Remanufacturing

    OutboundLogistics

    Dealers / Distribution

    The Reman Cycle

    Enabling EPR

  • Confidential Green10Making Sustainable Progress Possible

    Cylinder Head* Reman vs. New

    GHGGHG 61% less61% less

    Water useWater use 93% less93% less

    Energy useEnergy use 86% less86% less

    SafetySafety 82% advantage82% advantage

    Material use Material use > 99% less> 99% less

    Landfill space Landfill space > 99% less> 99% less

    Favorable Environmental Footprint…Favorable Environmental Footprint…

    * 2006 Cat study, 3412 cylinder head

    CoreLogistics

    Remanufacturing

    OutboundLogistics

    Dealers / Distribution

    The Reman Cycle

    Cylinder Head* Reman vs. New

    GHGGHG

    Water useWater use

    Energy useEnergy use

    SafetySafety

    Material use Material use

    Landfill space Landfill space

    Remanufacturing - Benefits

  • Confidential Green11Making Sustainable Progress Possible

    Green House Gases

    Raw Material Use

    Landfill Waste

    Energy Use

    Water Use

    LessLessExtended Producer Responsibility

    Jobs

    Recycling

    Affordable Development

    Controlled Industrial Processes

    MoreMoreThe future…The future…

    Remanufacturing - Benefits

  • Confidential Green12Making Sustainable Progress Possible

    Cat Certified Rebuilds…

    � Engineering specifications� Product upgrades� Dealer labor� New parts� Remanufactured parts� Fully warranted

    Cradle-to-Cradle SolutionsCradle-to-Cradle Solutions

  • Confidential Green13Making Sustainable Progress Possible

    Biogas gen sets…Remanufacture diesel truck engines

    into methane fueled generators

    Next Generation Reman

    Methane Capture - Hog Farm - Philippines

    Cradle-to-Cradle SolutionsCradle-to-Cradle Solutions

  • Confidential Green14Making Sustainable Progress Possible

    0

    20

    40

    60

    80

    100

    120

    1974

    1979

    1984

    1989

    1994

    1999

    2004

    2009

    2014

    2019

    Year

    Num

    ber

    of R

    egul

    atio

    ns

    Diesel Emission Regulations

    Current E-Waste Regulations

    Projected E-Waste Regulations

    Increase in Environmental Regulatory Laws

    Cat “Zero e-Waste” initiative… - Utilize the Reman “take back” model

    - Sell electronics on an exchange basis

    - Remanufacture returned e-cores

    - Recycle unusable e-cores

    Next Generation Reman

    e-Waste – a global problem

    Cradle-to-Cradle SolutionsCradle-to-Cradle Solutions

  • Confidential Green15Making Sustainable Progress Possible

    INC

    RE

    AS

    ING

    EN

    VIR

    ON

    ME

    NT

    AL

    BE

    NE

    FIT

    INCREASING ECONOMIC VALUE

    The Future… Sustainable SolutionsThe Future… Sustainable Solutions

    SUSTAINABLE SOLUTIONS

    ECO-EFFICIENTOPERATIONS

    PRODUCT TECHNOLOGY

    INTELLIGENTCHOICES

    BusinessSociety

    Academia

    Government

    NGOs

    “Cradle-to-Cradle” Life Cycle Focus…

  • Confidential Green16Making Sustainable Progress Possible

    Good for SocietyGood for Society

    Good for BusinessGood for Business

    Good for the Environment Good for the Environment

    Remanufacturing…Remanufacturing…

    CoreLogistics

    Remanufacturing

    OutboundLogistics

    Dealers / Distribution

    The Reman Cycle