The Realities of Reman

Oct. 20, 2014

Nothing lasts forever. Every component has an inherent fatigue life, and even the number of life cycles is limited. But determining the tipping point for repair, remanufacturing or replacement can involve a complicated set of metrics.

“Every component does have a lifespan typically different than the machine itself,” confirms Michael Balella, business development manager, product support, for Liebherr Construction Equipment Co. “All equipment owners understand that mechanical components will wear over time. Components have a finite life span.”

Reman gives customers a choice: to keep an old machine or buy new. While the potential downside of remanufacture for dealers and manufacturers is the impact it has on the sale of new parts for such machines as excavators, dozers, and wheel loaders, it nevertheless empowers customers and dealers with choices.

Master everything from OSHA regulations, to high-tech safety equipment in this FREE Special Report: Construction Safety Topics That Can Save Lives. Download it now!

When it comes to keeping a machine at optimal performance, reman can be a cost-effective option for replacement. “Owners can repair components locally for less money; however, over time, the performance of those components and lack of warranty will undoubtedly cost more,” Balella states.

Typically, reman components cost about two-thirds of a new component, and they generally carry the same warranty. Because reman components are built to the latest specifications-which could signify an improvement in performance as compared with the original-he says the remanufactured product offers the best option for overall value. “Remanufactured components are, in my opinion, the best value for replacement.”

The reman option offers a substantial savings opportunity, states Dick Snodgress, commercial manager for Caterpillar’s reman division, who estimates the average reman price at 55% of equivalent new. The range is 25%”“80%. “There’s definitely a cost benefit-plus, you get a same-as-new warranty on all reman parts.”

There is value in the machine, says Paul Moore, senior marketing manager, parts division for Komatsu, which maintains a global reman operation with local suppliers. Savings of 50%”“60% with reman, versus new, constitute a significant cost benefit. “It’s increasingly important to control the cost of operation to maximize opportunities.” Reman can contribute to that goal.

It’s a business decision, says Randy Bushelli, director of sales and marketing, customer support for Volvo Construction Equipment. “If a machine is a good producer, you’re more likely to reinvest; if not, you’re less likely to reman.”

There’s another, often forgotten benefit, he adds: It helps resale value. Balella concurs. “When it comes time to sell a machine, the resale value can be increased well above the cost of component replacement when replacement is documented, especially if the components carry a warranty.”