Manufacturers are facing a potential commodity time bomb. Globally, between now and 2025 we expect to see:
1bn more people
8bn more middle class consumers
A dramatic shift to packaged products
Much greater waste at end of life
Source: Towards the Circular Economy – Ellen McArthur Foundation
What does this mean for businesses? In the eight years between 2002 – 2010 commodity prices rose by 150% and with the estimated consumption rate set to rapidly rise, there will be increased volatility in the price of raw materials, posing serious risks to businesses.
Defusing the time bomb
Business strategies often focus solely on internal efficiencies in the Infrastructure and Operations that save money – reducing energy usage, using renewable energy sources, reducing waste and water efficiency.
However, the real opportunity to add value to the business comes from looking at products and services. At Cummins Diesel Recon, we place remanufacturing at the heart of our sustainability plans.
What is remanufacturing?
Remanufacturing is the process of bringing back used components to their original OEM standards for a new cycle of use through a process involving:
At Cummins, we offer a core exchange programme where customers return engines and components to us and receive a credit towards purchase. We then remanufacture the returned goods to “as new” factory standards using the rigorous process above.
Why would a customer choose remanufactured parts or engines?
Often, the engine or component required by our customer has been through the Cummins remanufacturing process and is in stock from us or one of our authorised suppliers. This means faster turnaround times, less down time for machinery and a lower cost product therefore minimising any financial implications associated with non-operational machinery.
The remanufactured product offers peace of mind to consumers with its “as new” warranty and offers a more reliable alternative than local non-genuine repairs.
Existing engines can be upgraded to facilitate the advance of technology further extending their useful life without the expense of procuring a brand new engine.
Finally, with a growing awareness of the consumption issues faced globally, remanufactured products can complement and enhance the customer’s sustainability and environmental policies.
What about the benefits to the remanufacturing business?
Remanufacturing and our core exchange programme allow us to gain a competitive advantage throughout the product lifecycle and protect intellectual property by severely restricting unofficial repair and remanufacture.
The ease of the process offers an enhanced customer experience which in turn drives customer retention and provides a USP for new customer sales.
When compared to manufacturing a new product, remanufacturing represents a reduction in energy usage of 85% and 200 million pounds of greenhouse gases are avoided providing measurable environmental benefits.
In addition, increased efficiency in our remanufacturing process enhances our profit margin, stimulates growth and supports our sustainability programme.
Want to find out more?
Come along to our 1.30pm workshop at the SMAS 2016 Conference with the Scottish Institute for Remanufacture and find out about improved efficiency and cost reductions through innovative and collaborative projects.