REMANUFACTURING – Strategic consulting & implementation with sound technical expertise.
We regard remanufacturing to be an important instrument of After-Sales. Nevertheless, many OEMs still focus on their new parts business. Discover the potential remanufacturing has to offer and how you can utilise this tool for yourself and your company!
To sensibly utilise remanufacturing in your company, you first need to fundamentally classify and evaluate remanufacturing with regard to the existing business models, the current product and spare parts portfolio, as well as the current after-sales strategy. Taking into account the individual framework conditions of your company, we evaluate and define the primary objective of remanufacturing in dialogue with you, whereby we focus on a wide range of company-specific fields of action:
- Developing customer segments which aren’t fully adressed today
- Reducing spare parts prices
- Reasonably priced repairs for older/depreciated products
- Increasing spare parts availability
Based on the obtained results, we work with you to derive your individual strategy and outline a sensible and feasible implementation plan.
What advantages does remanufacturing offer?
Remanufacturing can provide an answer to a wide variety of questions: How can we offer our customers who own older, already depreciated products repairs at sensible and attractive costs? How can we still meet our competitive challengers with our spare part prices? How can we improve our carbon footprint in the long term by reducing pollutant emissions? In addition, the market volume of remanufacturing is constantly increasing – in Europe alone, market researchers currently estimate the market volume to be approx. 70-100 billion €.
Is remanufacturing also interesting for my company and how do I implement it?
In order to answer this question against the background of the individual corporate strategy, the company-specific evaluation of the use of remanufacturing is conducted first. On the basis of sound industry and competitive knowledge, we evaluate and confirm the strategic relevance from an external perspective to subsequently work out the long-term strategy. Once Management has confirmed the strategy, it is finally anchored in the company and the independent product line is established in after-sales.
What are the greatest challenges in its implementation?
We see one of the greatest challenges in the implementation of remanufacturing as the sustainable strategic anchoring in the company. This is the starting point for the subsequent operational implementation and therefore serves as the basis for successful remanufacturing. Remanufacturing as such is not difficult – however it is not easy to implement in cooperations as usually it is also a challenge in internal politics.
KBC played a substantial role in helping automotive OEM and Tier 1 to initiate and complete major remanufacturing initiatives. Our customers achieved a long-term increase in spare parts sales and margins and were able to substantially increase their market share for products older than 4 years. Remanufacturing also helped our customers considerably in safeguarding their spare parts supply.
For one of our first remanufacturing projects, we received the renowed “Best of Consulting” award from WirtschaftsWoche.
In addition to a wide range of practical experience and industry-specific know-how, KBC has a broad network of experts in remanufacturing and is therefore optimally connected throughout the entire remanufacturing industry. Our own studies and benchmarks as well as our involvement in organisations such as APRA also distinguish us here.
Closely linked to strategy development, the definition of a cost-effective and competitive product portfolio is naturally quintessential.
This is usually based on the analysis and evaluation of the remanufacturing potential on the basis of the existing product portfolio. Due to the large number of competitors in remanufacturing, it is essential to fully evaluate one’s own market position and to develop a tailored product scope. In addition to the general economic situation of your company, the influencing factors also include market growth and relative market share as well as information on the product life cycles of existing products. In combination with the analysis of technologies and processes, we define an individual product portfolio in dialogue with you.
Further components of the portfolio definition include the technical evaluation and selection of the products, as well as market-driven product pricing in the context of the overall portfolio. It is very important to look at the products where your company is NOT making any business, but your (independent) competitors are. One of the biggest mistakes we see is companies just adding a reman variant to the „new part“ variant they are already selling in competetive numbers.
What current market developments do I have to take into account when defining my portfolio?
A look at the competition is fundamental for the definition of your product portfolio. This is the only way to fully evaluate your own market position and hence to derive realistic targets.
Which internal developments and challenges can be solved with remanufacturing?
The objective of ensuring the continuous supply of spare parts for older products, can be arguments for remanufacturing initiatives. For example, if a supplier cancels his spare parts delivery obligation, remanufacturing can ensure spare parts availability and continued spare parts supply to customers.
Does remanufacturing make sense for my portfolio?
The technical feasibility or remanufacturing initiatives of the competition should not be the sole decision-making basis for the implementation of remanufacturing. Only once economic viability has been confirmed on the basis of a valid business case do we recommend that you continue to pursue the remanufacturing approach.
KBC combines the two essential worlds to maximise the success of your company’s strategic implementation of remanufacturing: business administration and technology.
Based on our business management expertise, we develop a sound statement as to whether remanufacturing can bring strategic and economic advantages to your company. We substantiate each recommendation with corresponding figures.
Our technical know-how is a basic prerequisite for us to evaluate the technical feasibility of remanufacturing products in your company, because our mission is to make our recommendations a reality and therefore to create a demonstrable added value for your company. Our aim is to provide you with an individual portfolio proposal that is both economically viable and technically sound. After defining the individual company drivers, we focus with you on your spare parts portfolio and apply our technical and business know-how to offer you a valid portfolio definition.
Closed loop parts cycle
To supply a sufficient number of old parts available for reprocessing, the return of old components from the markets must be safeguarded in the required quantity and quality.
First, the relevant sources of the old parts must be identified. For an automotive OEM for example, it certainly makes sense to collect removed, old parts directly from its own workshops. However, the purchase of old spare parts may also be an alternative. Warranty returns for example, may also be used. After the potential sources have been identified, it is then necessary to assess whether the old parts are available in the quantity required for remanufacturing.
Consequently, a reverse parts cycle must be set up. In this case, topics such as incentives for the return of parts, parts identification and packaging as well as the proper collection and return of old parts play a special role. Repairs on an industrial scale can only be considered when the return flow of the parts is ensured. Finally, the old parts must be evaluated for their actual „remanability“. Due to the fact that there is usually only very little information available about the condition of old spare parts, they must be inspected after the goods have been received. In this case, the development of diagnostic know-how as well as the development of a stable process and rules for diagnostic reporting is indispensable. This is the only way in which the quality of the old parts and consequently the quality of the repaired parts can be continuously guaranteed.
How do I obtain old spare parts which I can remanufacture?
The fact alone that it makes sense from a technical and business perspective to establish remanufacturing in the company does not suffice. Old spare parts that can be repaired are needed in sufficient quantity and quality. You obtain these from the markets – based on the incentives of your process partners, you can ensure the corresponding return shipment of the components. External sources may also be considered.
Can I remanufacture every old spare part?
Despite confirmed technical feasibility, it is not automatically said that all old spare parts can also be repaired. As the origin and condition of the old parts is frequently unknown, they require intensive examination and assessment. Only a positive result facilitates repair. However, this requires the development of know-how and the implementation of clearly defined rules for the consistent assessment of old parts. Some old parts will enevitably be lost.
How do I coordinate the return of old parts?
To ensure the return of used parts by means of stringent processes and rules, the entire dealer organisation must be enabled and trained to implement and apply these. In addition, it is imperative to handle the recovered old parts consistently and on the basis of defined rules – we therefore recommend that our customers introduce adequate master data logic at an early stage. Taking into account the existing parts portfolio, specific number ranges are therefore defined and implemented in order to distinguish the old parts and repaired spare parts from the rest of the portfolio. Taxation, customs and stock keeping are other aspects that need to be considered and can be a challenge.
Our logistics know-how, combined with sound technical know-how and a portion of pragmatism, enables us to successfully develop and establish reverse parts cycles for our customers.
We always work hand in hand with our customers to develop concepts for the assessment and sorting of old parts. We have therefore already successfully developed tools for the identification of parts during the assessment process.
After successful joint testing of the processes and rules with the employees of our customers, we were always able to successfully transfer them into the standard process.
We develop individual return cockpits for our customers in order to guarantee transparency about the returned old parts in the long term. These support our customers in maintaining an overview of the old parts required and available in the parts cycle.
Processes & Technology
New processes and procedures are also required for the remanufacturing industry in order to promptly prepare for disruptive events such as the structural change towards e-mobility and the associated new technologies and vehicle components. As development is progressing at a rapid pace, it is essential for manufacturers to prepare for this change at an early stage and to position themselves strategically and sustainably. These new technologies and vehicle components must be integrated into the product range. This facilitates the exploitation of cost potentials, but also the creation of unique technological features in comparison to the competition.
In addition to the conceptualisation and design of the individual process steps (disassembly, cleaning, repair and assembly) and the selection of suitable manufacturing technologies, an end-to-end view of the entire process landscape is also required.
Only once the interplay of the quantities from disassembly to assembly of the repaired components is ensured can repairs follow on an industrial scale.
New technologies and manufacturing processes require integration into existing production lines or the implementation of new ones. Among other things, this includes a comprehensive requirements analysis in development, the industrialisation of tools, as well as sustainable and robust quality management.
In addition, an adaptation of the IT systems is indispensable to ensure monitoring and transparency of the defined processes.
Which technologies and core processes are decisive for remanufacturing?
The entire repair process can be complex and extensive and there is no single answer when it comes to technologies which are to be employed. However new technologies can help to remanufacture parts that could not be remanufactured before (e.g. plasma coating etc.). The design of the part itself dictates the technology employed in its remanufacturing. „Design for remanufacturing“ can therefore also play a role in parts design.
What are the challenges in planning and implementing these processes?
In our view, the smooth interaction and detailed coordination of the individual process steps are the critical success factors for a smooth remanufacturing process. Only if each individual process step is coordinated and all interactions and interfaces are taken into account can new repaired components be produced on an industrial scale on the basis of old spare parts.
Which technologies and core processes will be important for me in the future?
It is only through the continuous observation of the competition and cooperation with research facilities and institutes that potential can be identified and exploited at an early stage. New technologies and processes must be integrated into the existing remanufacturing business as early as possible in order to remain competitive in the fast-moving market of the future.
We have already defined and implemented repair processes for our customers in the most varied of projects. We know the typical challenges in the definition of the necessary processes and the challenges posed by the interaction of the interfaces. The complexity of the subject area particularly appeals to us: whether it be the introduction of new part number ranges, the definition of release processes or the complete integration of remanufacturing into your existing plants. When it comes to solving complex problems, we benefit not only from our expertise but also from a certain degree of creativity. For example, we have developed tailored selection tools specifically for our customers, with which old returned parts can be identified not only more reliably but also significantly faster.
Due to our broadly based know-how, we are able to define a comprehensive view of the future target process across all departments. In this regard, the interplay between quality, production, logistics, development and release plays a decisive role. You benefit from our procedural know-how and our expertise in manufacturing and production, which we have continuously acquired in numerous initiatives and projects. Among other things, this includes the complete conceptualisation and planning of an assembly plant in which a 3-digit number of engines is industrially repaired every year.
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