Resource: Case Studies: Blackhill Engineering Services (Quarry Equipment)
Blackhill repairs and remanufactures crushing machines for the quarrying industry, and designs bespoke engineering systems for a range of other clients.
Friday, 17th November 2006
About Blackhill Engineering Services
Blackhill has been operating for over 10 years, and employs around 23 people including 4 CAD staff, generating a turnover of about �1.2m in 2001 of which 30% is directly attributable to remanufacturing. Remanufacturing accounts for around 10% of sales in the quarry crusher market. Any company that relied solely on remanufacturing would suffer cash flow problems. Blackhill has diversified into a number of services encompassing new build, repair, remanufacture and bespoke engineering design, which use essentially the same skill set. They also re-engineer old equipment to include upgrades, and service customers outside of their traditional sector. Special Features of Blackhills Operations In this industry, even complex components are worth salvaging by remanufacture. Customers tend to trade in a used item to be replaced by an equivalent remanufactured one. Since the traded-in items retain a high value, representing a large sum of money tied up in Blackhills stock, a customers order is satisfied from a (near) complete remanufactured unit, while the actual cost of the job is related the cost of remanufacture of the traded-in machine. Typically, a remanufactured item can be presented at around 40% of the cost of an equivalent new item, or 30% of the price of a new marque machine.
Special Features of the Sector
Core technologies are relatively static and evolution is quite slow since machines have around a 7 year life. There is some evolution in peripheral components - it is the application of electronics, which is generally outside the core competence of remanufacturers, where OEMs maintain their edge. To the cost-conscious customer, remanufacturing in this sector gives clear benefits. Well maintained units on a moderate duty can provide service for up to 3 cycles of use, or 20 years (the typical life of a mining operation). It can be difficult to find personnel with experience of large scale, manual set-up machines as opposed to small scale, computer controlled machines. Remanufacturing also requires competence in more than one discipline of machining, fitting, fabrication and welding. An increasing portion of the business is for bespoke engineering solutions. Such activities require personnel capable of understanding engineering needs, and of translating them via CAD packages into engineering drawings and specifications capable of transmission and interpretation by others. This demands a new level of IT facility. Businesses need to offer a number of services, and to be flexible in their approaches as a means of weathering variations in demand.