Exchange 2.0: implementing circular economy in distribution

Audi wants to reduce its environmental impact and conserve resources along the entire value chain. With this in mind, the four rings has established the principles of a closed-loop circular economy during the development, manufacture and marketing of its products. The company has reached an important milestone in its efforts with the Exchange 2.0 project. In cooperation with the Volkswagen plant in Kassel, Audi has developed a sustainable remanufacturing method for mechatronic parts and transmissions for Audi S tronic models.

03/11/2019 Reading Time: 5 min

Circular Economy bei Audi

Circular economy at Audi

Gears, screws or gaskets are just some of the small parts that go into a transmission. If one of the components quit working, it used to mean a lot of work for Audi employees: “We had to disassemble everything to find the fault – even the wheel set,” explains Dominic Rattmann from Audi Product Management Genuine Parts. That cost not only time but a lot of money as well. And aside from that, at most only half of the components were reused. The rest were replaced as a precaution.

That has changed now. Thanks to the new remanufacturing method, up to 80 percent of the individual parts in the value chain can be conserved. Projected over the year, this means employees can currently reprocess up to 4,500 transmissions and 20,000 mechatronic parts. The market launch for the remanufacturing will take place during the course of 2019.

Retention of

up to

80 %

of the individual parts in the value chain

Remanufacturing of

up to

20,000

mechatronic parts

possible

Possible reduction

of up to

80 %

in material consumption in transmissions and mechatronic parts

New process standard: innovative and sustainable

Unlike in the past, parts no longer have to be replaced preventively and disposed of.

Johann Wendl

The Exchange 2.0 project was initiated by Dominic Rattmann and is the first joint remanufacturing concept from both Audi Ingolstadt and the Volkswagen Group Kassel. While the complex S tronic transmissions are being processed in Kassel, the Ingolstadt assemblies remanufacturing unit handles the mechatronic parts. That is yet another first: mechatronic parts have never before been remanufactured in the VW Group. A total of around 40 employees from Research and Development, Genuine Parts, Finance, Production Planning and Quality Assurance pushed the development of the program forward across all brands and developed new tools, systems and lines for the implementation.

The new process standard involves a number of different steps. First, dealers must complete a checklist if customers lodge complaints about vehicles. The list offers the first clues about possible causes of defects. Employees then analyze the data from the fault memory. The fault codes provide information on potential prior damage to the wheel set or other components: “Even at this stage we can already search for components that should be remanufactured,” says Johann Wendl from Quality Assurance Powertrain. “Unlike in the past, parts no longer have to be replaced preventively and disposed of.” As a result, the new intelligent diagnostics save numerous process steps that had previously been necessary. In addition, the new cleaning method removes oil from the components and provides more information.

With the Exchange 2.0 project we are embodying the circular economy in Audi distribution and are also managing to combine the strategic key areas of sustainability and digitalization.

Dominic Rattmann

Remanufacturing of the components following diagnosis

We have shown how replacement parts can be remanufactured at a premium level.

Michael-Andreas Spreng

Only genuine parts that have been approved by Technical Development can be used to remanufacture the transmissions: “This sets us apart from our competitors, who sometimes do not have the option of procuring genuine parts. We have shown how replacement parts can be remanufactured at a premium level,” says Michael-Andreas Spreng, Head of Engine Remanufacturing. The transmission is then subjected to a 100 percent functional inspection on the test bench. And Wendl confirms: “The tests so far have demonstrated that the remanufactured transmissions meet the quality criteria of new parts. This is also currently being verified by vehicle tests and safety runs.”

With use of the methods starting in the second half of 2019, Audi will achieve the conceptual process capability for the new remanufacturing method for other components as well: “As a consequence, we’re focusing on innovation leadership of our remanufactured components.” And Dominic Rattmann adds: “With the Exchange 2.0 project we are embodying the circular economy in Audi distribution and are also managing to combine the strategic key areas of sustainability and digitalization.”

Circular economy: focusing on reuse

The added environmental and economic value of the project is indeed impressive. The use phases of individual components are considerably lengthened through repair or reuse. The four rings could reduce its overall material consumption for transmissions and mechatronic parts by up to 80 percent. The goal is for the new process to pay for itself after just one year. Industrial remanufacturing of used parts in genuine-part quality is the second approach within the circular economy. By adding this sustainable remanufacturing process, Audi is expanding its various programs in order to advance the circular economy along the entire value chain. Audi has already introduced successful aluminum recycling projects.

These projects and the current Exchange 2.0 project are thus contributing directly to the sustainability strategy at Audi (circular economy/resources action area). Audi has also expressly committed to the UN’s Sustainable Development Goals (SDGs).

Sustainable Development Goals

SDG

Sustainable Development Goals

The Sustainable Development Goals of the United Nations (SDGs) describe 17 global goals for sustainable development. With the activities in the Exchange 2.0 project, the company is contributing to SDG numbers 12 (Responsible Production and Consumption) and 9 (Industry, Innovation and Infrastructure).

Exchange 2.0: how Audi is combining sustainability and digitalization

The digital diagnostics in the Exchange 2.0 project is one example of how Audi is digitalizing its own processes in order to generate new revenue potential, boost sustainability in its business activities and cut costs. The four rings wants to implement digitalization along the entire vehicle cycle – from the purchase of a new car to its use and its sale. This also includes the spare parts business. The focus here is always on the needs of customers, since digitalization is intended to enable them to easily use premium mobility. That includes quickly and economically replacing spare parts.

Fast time-to-market, continuous improvement and clear decisions – the issue of speed also plays a decisive role in the digitalization strategy. The Exchange 2.0 project shows that quick implementation is possible when Audi employees work together in pursuit of a goal and collaborate across multiple departments.

Circular economy: reduce, reuse, recycle.
Circular economy: reduce, reuse, recycle.

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