September-October 2006

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Behind the Boom in Remanufacturing

Reman components offer speedy repairs.

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By Daniel C. Brown

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Last spring, Trumbull Corp. was using articulated dump trucks to haul dirt for the reconstruction of Interstate 79 in Pittsburgh, PA. It was a high-production project. Suddenly, for an unknown reason, an engine failed on one of the 40-ton trucks, which had slightly more than 4,000 hours on it, says Bob Decker, Trumbull’s equipment manager.

Photo: John Deere
Inspection ensures components meet new-machine specs.

“Rudd Equipment, the dealer, had a remanufactured engine available. We told them to go ahead, and the truck was only down for two days,” says Decker. “To rebuild that engine would have taken from seven to 14 days, so that reman engine got us going much faster, and saved the $3,000-per-day loss of production from that one truck. I’ll put a reman engine in anything.”

Ron Hutchinson has a similar story. “Two summers ago, we lost an engine in a wheel loader working at an asphalt plant in northern Kentucky,” recalls Hutchinson, the construction equipment manager for Barrett Paving Materials Inc. “The engine had overheated and failed, and we sent the whole loader to the dealer. It took seven days to put a remanufactured engine in it.

“We had to rent another loader to fill in for the one that broke down, but putting in that reman engine reduced the impact of the rental time, compared to rebuilding the old engine,” says Hutchinson. “It would have taken 14 to 20 days to rebuild that engine.”

Hutchinson and Decker are not alone. Across this country, contractors in large numbers have discovered savings in downtime costs by installing a reman unit. Virtually all engine manufacturers keep an inventory of these units—and some can ship an engine the same day they get an order.

Photo: John Deere
A ready-to-go remanufactured engine

“In a perfect world, our engine arrives just after they take the old one out,” says Bradley Fife, sales and marketing manager for ReGen Technologies, a John Deere joint venture company that remanufactures the company’s engines. “Typically we have an engine on the shelf, or one in the process of remanufacturing. At the slowest, we send an engine out the second day after an order.” Based in Springfield, MO, ReGen remanufactures engines, connecting rods, cylinder heads, fuel injection nozzles, fuel pumps, oil and water pumps, and turbochargers.

Fast-growing Business
Remanufacturing is growing by leaps and bounds. Cat Reman Services, one of the world’s largest remanufacturers, has seen its business double in size and scope over the past five years—and expects it to double again in the next five, says John Butte, commercial manager for the company.

Through last May, Fife reports that reman business at ReGen Technologies jumped by 40% over the prior fiscal year. What’s more, ReGen sales climbed by 30% in 2005 over 2004. The reasons: Customers tell Fife their equipment is very busy—even over-utilized—and that it’s difficult to find good rental units. “Acceptance of the reman option has grown,” says Fife.

Photo: Phoenix
Going reman gets machines back to work fast.

At Phoenix Reman Group, a John Deere subsidiary that remanufactures drive train and hydraulic components, business is growing at the rate of 15% to 20% a year, says Don Flatau, the group’s general manager. For one thing, reman components cost less. They run about 65% to 70% of the cost of new components.

And Flatau echoed what a number of contractors told Grading & Excavation Contractor: Reman engines and components simply offer a quicker way to get a machine up and running after a breakdown. “If a transmission fails in the field and the customer or dealer repairs it, they have to pull the transmission, split it open, order parts, make the repair, and hope they fixed the right thing,” says Flatau. “With our remanufactured transmission, they order one part number, built to new machine specifications, and it carries a new component warranty—generally a 12-month, 1,500-hour warranty. So you can imagine how much faster it is to get a customer up and running.”

Mack Trucks remanufactures approximately 4,000 to 5,000 engines every year, says Dave McKenna, powertrain sales and marketing manager. “It’s a growth business for three reasons,” says McKenna. “Trucks are lasting longer, and reman engines extend their life; two, people don’t want to rebuild their own engines because they’re getting too complex; and three, it’s quicker. You can remove and replace an engine in two days. We must be doing something right, because the business continues to grow every year.”

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