Resource: Issues and Challenges: for Remanufacturing Companies
Remanufacturing has many implications for companies in terms of organization and relationships with customers, suppliers and other manufacturers.
Tuesday, 21st November 2006
- In direct competition with low cost imports, only organised, low cost organizations will be able to engage head to head.
- Reputation, warranties, relationship with OEMs, and excellent bi-directional logistics will be major competitive issues for local contenders.
- Do not compete on price: provide complete supply and maintenance and refurbishment service to reclaim value chain directly.
- Identify novel service/product combinations, particularly those that combine purchase, maintenance and upgrade capabilities.
- Seek opportunities to tie in to OEMs or to accredited brokers and distribution channels for added credibility.
- Back-integrate into customers operation to in-source the aspect of operation related to use of the equipment.
- Become the local maintenance and remanufacturing arm of a reputable foreign importer, particularly if they have no presence in the UK; consider profit share or equity stake of OEM in business.
- Do not remanufacture for primary home, European or other western markets, but rather for secondary markets.
- Relocate or create subsidiaries in developing markets to take advantage of local cost structures; this creates a foreign remanufacturing operation at point of high demand, but also capability to re-import cost-effectively into the developed world.
- Urge industry associations to present a coherent message for remanufacturing in their sector.
- Ally with other service providers, such as logistics agents, where the above service is beyond the scope of knowledge, or is at another business interface.
- Consider opportunities in logistics and brokering of core components using existing skills, and leveraging economies of scale.
- Get together, for example in trade associations, to lobby for changes to legislation that are unfairly hampering competition.
- Benchmark and identify best practices within and without the sector.
Caterpillar Remanufacturing celebrates 35th anniversary
CAT Reman opened its doors in Corinth and Alcorn County in Mississippi, USA in 1982 with just 11 employees. 35 years on, there are over 1,300 men and women working at CAT Reman’s four sites there.