Hi jwalker and welcome to the Org.

You can't recycle withdrawn units, but you can control which units are the first ones on the field. There is a reinforcement button in the upper right(?) corner of the pre-battle screen. It has been a while since I've used it, but you select the unit you want to replace and then click on the reinforcement button. It will cycle through all the units waiting off the battlefield. Keep selecting undesirable units in the initial 16 and cycling through the reinforcements until you get the starting line up you want. I hope that helps.