Remanufactured Machines-Are They Worth a Look?

“In the rental business, the two biggest factors that need to be managed with respect to the equipment costs are to minimize equipment purchase costs and maximize the utilization period of that equipment,” says Wagner at Deere. “When the machine goes out, it needs to be reliable, and it needs to do the job the customers needs done, with minimal downtime. I think what can happen sometimes is the rental companies end up trading the machine in early just to avoid the risk of a major component failure. With the Reman Reload program, they can extend the useful life of that machine and maximize its amortization period, while having the peace of mind of the three-year/5,000-hour extended power train warranty.”

Better-than-ever performance

Since any product improvements that have occurred since original production are included in the remanufacturing process, these components can not only extend the life of a machine, but in some cases actually improve power and durability. At CNH Reman, specially trained technicians disassemble and inspect worn engines, so they know exactly which parts require replacement. Other parts such as crankshafts, connecting rods and cylinder heads are carefully evaluated.

“We have the technology to bring good components back up to spec,” explains Hutkowski. “Every part is checked.”

Plus, they come backed by warranties, parts availability and service. In addition to the obvious cost advantage, other benefits include the ability to get parts from the original factory at attractive prices with factory warranty and support.

The same warranty available on new product is provided on most of the remanufactured items. Studies show that the failure rate of parts remanufactured to manufacturers’ exacting standards is at least the same as that of a new part. Manufacturers are able to offer warranties and services comparable to new due to the stringent steps followed during the remanufacturing process.

With Tier 4 Final technology beginning to come into the market, the remanufacturing concept has special significance for equipment owners of machines so equipped. For CNH Reman, a recent $1-million investment in its Springfield, MO facility helped engineers create a 1,200-square-foot “clean room” for testing the latest Tier 4-compliant fuel injection components. This includes the new family of high-pressure common rail injectors, which are now being built to micron-level tolerances. The new “Class 6” clean room supports standard measurements of one half of a micron. By comparison, a human hair is 70 microns.

Clean rooms are rated by measuring the air particulate count per cubic meter. In the new clean room, eight huge HEPA filter modules work continuously to purify the air to less than .1 micron of particulate per cubic meter every two minutes, or 30 times per hour.

In addition to saving capital investment, remanufacturing is also good for the environment. Energy savings and environmental benefits of remanufacturing are significant. Remanufacturing uses about 85% less energy than mining, refining, melting and machining of new material. Remanufactured engines and components help keep products from ending up in landfills, and can have a large impact on greenhouse gas reduction efforts.

Gaining momentum

Remanufacturing is a growing industry, suggesting increasing availability of remanufactured parts in the future. The remanufacturing business has tended to do very well during tough economic times, and continues to do well in today’s financially cautious atmosphere. Equipment owners want to derive extra value from their investment and using remanufactured products is one way to do that.

“The cost-efficiency of the CNH Reman program has been a big draw — particularly during the last several years of economic turbulence,” says Hutkowski. “Rental companies — and the construction industry in general - have become very sensitive to the overall cost of machine ownership. Finding ways to lower this overall cost is a huge priority, and CNH Reman fits into the objective perfectly.”

Many believe the remanufacturing business will continue to grow even past the recovery of the construction economy. The concept of remanufactured products is well understood in North America and is gaining acceptance in all markets. In addition to expansion of markets, there’s likely to be expansion of product lines as more technology is being developed to deliver an increasing array of remanufactured products.

“Since CNH Reman parts come with absolutely no quality sacrifices — in fact, CNH Reman engines often exceed original performance — they’re an easy decision for economically savvy rental companies,” Hutkowski says. “CNH Reman plans to grow sales 18 percent in 2013 through continued product development and increased dealer loyalty.”