Article

The Time Is Right For Reman

February 2008, TruckingInfo.com - Feature

by Deborah Lockridge, Editor in Chief - Also by this author

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Remanufactured parts have probably been around just about as long as there have been parts. But in the last several years, we've seen increased emphasis on and interest in remanufacturing in the world of heavy-duty trucks.

Sophisticated computer technology and increased consolidation in the industry are factors making today's remanufactured parts better than ever before. At the same time, rising prices for trucks and fuel make it more important than ever to keep costs under control, and reman parts typically cost 20 to 30 percent less than new. And with increased interest in "being green," people are realizing that remanufacturing is an excellent way to recycle.

"Remanufacturing, especially in the commercial vehicle industry, is a very critical element to fleets or owner-operators," says Doug Wolma, general manager of remanufacturing for ArvinMeritor Commercial Vehicle Aftermarket. "The cost of a remanufactured part is going to be lower to the end user. More importantly, a good remanufacturer can recover that part and bring it back to original specifications, and you're going to get the same life out of the second go-round with that part."

With stricter emissions regulations adding thousands of dollars to the price of new trucks, many truck owners who previously might not have kept their vehicles long enough for remanufactured parts to enter the equation are now taking a closer look, says Rick Cape, remanufacturing marketing manager for Mack's ReMack brand.

"Remanufactured [products] can run 60 to 80 percent the cost of new - if new's even available," Cape says. "As we move into these newer emissions regulations, you can no longer get a pre-2007 new engine. So you look at, 'If I keep my truck (instead of trading it in for a new, more expensive low-emissions model), put a remanufactured basic engine in my chassis and get a two-year warranty, what's my cost per mile? It's going to increase the resale value of my truck in two years, too.' "

In a world of just-in-time deliveries and fierce competition, downtime also becomes an issue, says Craig Wood, vice president of business development for Detroit Diesel Remanufacturing. "When you're replacing a component on an exchange basis, you have the ability to just remove and install the entire component or assembly," rather than waiting to have it repaired or doing an in-frame overhaul.

All of these factors are contributing to both a greater acceptance of remanufactured parts in the trucking industry and more availability of remanufactured parts and components. Parts that are prime candidates for remanufacturing are either high-cost components with a large number of replaceable wear components, such as engines, transmissions and axles; or high-volume parts such as brake shoes, starters and alternators. But the sky's the limit.

"Just about anything other than disposable parts is being remanufactured today," says Dave Plaster, global marketing manager for aftermarket, Eaton Corp. "Even electronic items are now being remanufactured, like the electronic controllers on a transmission."

Changing Business

Original equipment manufacturers are increasingly involved in the remanufacturing business. "I think the biggest change of the past 15 to 20 years is the large OEs now deem this a critical element of their aftermarket strategy and therefore are taking a much more active interest in doing remanufacturing," Wolma says. He explains why:

"Many decades ago, the OE guys would say you can't do a high quality job of remanufacturing a part, you must buy new, when in fact there's a market out there that requires a remanufactured part. When a truck is on its second or third owner, it is not cost-effective to put a new part on it. They need an alternative."

In addition, as in many industries, consolidation and growth are changing the face of competition. Smaller companies are being gobbled up by OEs and independents alike. Last year, for instance, ArvinMeritor bought Canada's Mascot Truck Parts, while Weller Reman added five locations nationally, including the reman business of Trucks & Parts of Tampa.

"There's been a lot of people in the business that are no longer in the business over the last 15 to 20 years," says Bill Gager, president of the Automotive Parts Remanufacturers Association (which includes both automotive and heavy-duty members). "A lot of the remanufacturers have just gone away; they couldn't figure out ways to compete."

As original equipment has become more technologically advanced, it also becomes more and more difficult for small shops to have the knowledge and be able to make the investment in tooling needed to remanufacture many components.

"There are very sophisticated systems used now for remanufacturing that just weren't used in the past," Wolma says. "It's quite frankly a very high-capital-investment business."

Not Your Father's Rebuilt

The quality of remanufactured components has never been so high.

"New technology in cleaning, machining, metal build up and disassembly has improved the salvage rates as well as the quality of the remanufactured units," says Jack Lorimer, director, aftermarket, North America, for BorgWarner Turbo & Emissions Systems.

In fact, ArvinMeritor's Wolma calls the quality of today's reman products "phenomenal."

"If the remanufacturer does the job right, you can be assured that product will have the same life the second time around as it had the first time around," he says. "You don't have to assume that because the cost is lower, you're going to get less life out of that part."

Detroit Diesel's Wood says when a truck owner uses a corporate remanufactured product like DDR's reliabilt brand engines, "ultimately they're not repairing the truck, they're actually restoring the truck. The catch line we use is 'restore the power.' We see ourselves as being more in the restoration rather than the repair or rebuilding business, with a focus on minimizing the end user's cost of ownership."

In some cases, a remanufactured part may even be better than it was when it was new. Product improvements that have made their way into new parts often can be incorporated during the remanufacturing process. This is done by both OE remanufacturers and independent companies.

"The rebuilder has the luxury of looking at something after it's been road tested," says APRA's Gager. "He may see a part that fails more often and try to figure out how to make sure that part doesn't fail again."

Mike Hill, chairman of the Heavy Duty Remanufacturers Group of APRA and president of Precision Rebuilders in Missouri, offers an example.

"Some years ago, a particular air compressor that was very popular had an extremely small rod bearing insert, as well as not enough rings on the piston to adequately control oil consumption. We chose to upgrade the piston to include more oil control and compression rings, and the same with the bearing. Two to three years after we started using a five-ring piston as opposed to a three-ring, the OE subsequently changed their design as well."

Remanufacturing outfits operated by OEMs do this as well, and also have the added benefit of being able to work with the OE engineers.

"Our engineers on our OE side visit our [remanufacturing] facility," Mack's Cape explains. "When we see different wear patterns or failure modes, the engineers do analysis on that type of thing and improve the current product. A lot of times we can incorporate those type of improvements in our remanufactured product - so the remanufactured product may actually be better than it was new."

"That's one of the beauties of remanufacturing," says Detroit's Wood. "We're able to incorporate in a remanufactured engine all of the engineering enhancements over the years. It's the beauty of hindsight, the way I look at it."

Some people are taking advantage of this to improve performance rather than replacing worn or broken parts. Wood reports that with today's high fuel prices, some customers are replacing their fuel injectors with reliabilt brand injectors to take advantage of engineering improvements that allow those injectors to offer better fuel economy than their current ones.

The Quality Question

Many people, especially on the OEM side, say there's a distinct difference between "rebuilding" and "remanufacturing." Others, however, say the terms are interchangeable.

"A true remanufacturer changes all of the major wear parts and brings it back to its original specification," says Tom Engle, product segment manager, power transmissions, for Daimler Trucks North America (formerly Freightliner LLC).

As most OEMs describe it, remanufacturing is very similar to the process of manufacturing new parts. The unit is completely disassembled and unsalvageable parts are scrapped. Salvageable parts (non-wear) are cleaned and reconditioned to meet rigid OE specifications. All worn components are replaced with new components. They are placed in an assembly line along with many required new components (bearings, seals etc.) to be assembled as completed units. The same kind of quality testing that happens on new parts happens on remanufactured parts.

In the case of an engine, says Detroit's Wood, they are actually able to add metal back to the base engine in order to restore wear surfaces to blueprint specifications.

"You have to make sure, first of all, that a remanufacturer has the ability to inspect the component for all of the critical characteristics," says ArvinMeritor's Wolma. "It's not acceptable just to do a visual inspection. You have to be able to measure things with appropriate gauging, like a bore gauge or a surface finish gauge, and do things like magnaflux for cracks.

"A second piece of information is, what does the manufacturer consider to be mandatory replacement parts? There's pretty big variability on that. Some guys don't replace bearings new, 100 percent. Some guys will re-use certain seals. Some guys will re-use the sleeves for the seals." A quality remanufacturer, he says, will replace those types of items 100 percent.

But remanufacturing is not limited to original equipment suppliers, says Rich VanSlambrouck, sales manager for Weller Reman, the largest remanufacturer of heavy-duty drivetrain components in the country. "Weller remanufactures by completely disassembling a unit, cleaning and inspecting all its parts," he says. "All our cases are cleaned thoroughly, and we even paint the interiors to further reduce contamination. We remanufacture from the drain plug up, keeping the original identity of the unit."

A "rebuilder," however, may re-use parts that still work or are partly worn, even if they are major wear parts. A rebuilder does not necessarily bring the part back to original OEM specifications or expectations.

For instance, in a transmission, VanSlambrouck says, some rebuilders may not replace the synchronizer or the bearings if the failure was not related to those parts. Weller uses new synchronizers and new bearings every time.

"You may see some savings up front, if that's what you want to do, but if you're going to go through all that labor to drop a transmission out of a truck, why would you not want to put a quality remanufactured product in it?" he says.

Mack's Cape notes that while many local rebuilders may charge less than you would pay for a remanufactured component such as a ReMack engine, "while they cut costs greatly, they cut corners, too. Maybe they'll knurl the valve guides, which kind of brings it back to size a little bit, but that's not correcting the problem; it's a Band-Aid."

Not everyone agrees with this differentiation between "remanufacturing" and "rebuilding."

"As far as we're concerned, there is no difference," Gager says. "It's really more of a marketing term."

HDRG's Hill says while his company's name uses the term "rebuilders," what they do is indeed remanufacturing. "Our process is no different than [the OE's], which is 100 percent replacement of all wear parts, inspection and qualification of reusable parts and nonconsumables, and to put the unit in as new or better condition."

One thing OEs can do that he can't, Hill admits, is advertise that the remanufactured part meets OEM specifications. "A lot of times those [specs] are not made available," he says. "But the statement we make is that it exceeds or meets OEM expectations (rather than specifications). In other words, if you expect this thing to last three years when it's new, you are going to get the same results from an independent remanufactured product as you would from an OE product."

The quality of the parts being used for replacement during the reman process is also an issue.

"A number of rebuilders in the trucking industry are still not using genuine, OEM-quality components," says Eaton's Plaster. "Nor do they have the capabilities to do so anytime soon. In order to be an authentic remanufactured component, the product has to be built to its original specs with genuine, OEM components."

High-quality independents beg to differ. Many remanufacturers are now using non-OE replacement parts, including some from outside the U.S. But good remanufacturers have strict quality standards in place as to what parts they will use.

"There are several manufacturers, and if you put one of the same thing from each of them in front of you, they all look the same - but they're not," says Hill. When they decided to start using some import parts, Precision Rebuilders went through a lengthy process to select quality parts to use in its remanufacturing process.

"The key," says Weller's VanSlambrouck, "is to have a remanufacturer who has the volume and the expertise to test the product before it leaves the door, who has a careful and conservative approach, using content of the highest quality available. By reviewing so many failed cores from others, we build a valuable database of knowledge, using parts that work best in their designated applications, improving the product, sometimes beyond OE specifications."

The Right Reman

No matter what the semantics, you need to make sure you're using a quality, reputable remanufacturer. The important thing is to know what you're getting and who you're buying from.

"How do you make sure you're getting a quality remanufactured part? I think you could say, how do you know you're getting a good quality part, period," Gager says. "I think it depends on the relationship you have with whoever you're buying the product from."

You need to find a quality supplier with a ready supply of dependable products at competitive prices, says George West, production engineer, heavy duty, for AIM, which remanufactures alternators and starters. "Reduced downtime for any rig means money saved on the bottom line. Other important concerns include core handling, depth of applications, high fill rates and low return rates."

Get to know your supplier, West says. "Whether you are an existing customer or a prospective one, take time to visit the supplier's operation and get to know the people who are responsible for product quality and the manufacturing process." One thing you could look for, he says, is whether the supplier is ISO certified, which means policies and procedures are in place to assure consistent quality.

Some remanufacturers may be able to share information gleaned during failure analysis that has importance beyond the component in question. Such is the case at Weller.

"Say we detect a broken synchronizer pin in a transmission," VanSlambrouck explains. "That generally denotes a vibration issue in the truck. So that means there's probably something else going on in that vehicle. Or we could pick up things like water that was in the oil, which might point toward a cooler or air system issue. We would immediately inform the customer about that issue, within hours of receiving the core."

Make sure you know what the warranty covers. At Mack, for example, ReMack warranties cover contingent or progressive damage, Cape says. For instance, if your remanufactured oil pump fails and it throws a rod out the side of the block, the warranty will cover 100 percent on parts. If the part was installed by a Mack dealer, they'll cover labor as well. "Your local rebuilders may just say, 'Here's another oil pump,' " Cape says.

Availability and geography are key concerns.

"If a vehicle's down, you don't want to wait three days to have [a component] rebuilt or shipped in from a different part of the country," VanSlambrouck says.

"When you're dealing with a Freightliner dealer, there isn't much risk, because we're getting the genuine component, and with the dealer network there's always somewhere to get support," says Daimler's Engle. "If you're dealing with a small rebuilder with one or two facilities, it's not necessarily not a good part, but if or when a failure does occur, it might be more difficult to get that product serviced in the marketplace. A lot of rebuilders make a good product, but they might be limited to East Coast or West Coast and don't necessarily have nationwide facilities to support the product."

For some remanufactured parts, you're going to be dealing with a distributor rather than directly with the remanufacturer. Again, know who you're doing business with.

While remanufacturers would like to tell you that a remanufactured part is always a good idea, Eaton's Plaster recommends truck owners take into account two important factors - trade cycles and the applications where they're going to be placing the vehicles. "Some applications are especially severe and the owner will have to decide if it makes good fiscal sense to invest in reman or buy new components."

In order to take full advantage of the cheaper prices of remanufactured components, the old parts need to be returned for their "core" value.

"Management of cores is vital to keeping [a truck owner's] costs down," says BorgWarner's Lorimer.

Looking to the Future

In the future, expect to see continued consolidation and more activity by the OEs.

"I see the OEs continuing to take as much of that business as they can, because of what they bring to the business," Wolma says. "I see guys getting into all-makes as a strategy going forward, where they're not just offering one type of component, they're offering an all-makes portfolio for those components, which is something that hasn't always been done before, especially on the OE front.

"I think remanufacturing is going to continue to gain momentum, and it's widely accepted now. Many people were previously hesitant, thinking of it as a second-tier product."

One factor that may contribute to the increasing popularity of remanufactured parts is the movement toward a more ecologically responsible society.

According to the National Center for Remanufacturing and Resource Recovery at the Rochester Institute of Technology, transportation, including heavy-duty trucking, is the second largest segment of remanufactured products.

"Remanufactured parts are the highest form of recycling," Gager says. "So the business is being rediscovered by a lot of people, who are saying maybe we should encourage more and more remanufacturing as a way of reducing global warming, emissions and so forth. And I think that is going to drive a lot of changes in the marketplace."

Reman In The News

Just a sampling of the headlines from 2007 showing the increased interest in remanufacturing:

The Heavy Duty Remanufacturing Group (part of the Automotive Parts Remanufacturers Association) held its first Heavy Duty Remanufacturing Group Summit in Las Vegas last January prior to Heavy Duty Aftermarket Week.

ArvinMeritor announced last spring it would focus strongly on its remanufacturing business and enlarge its portfolio of remanufactured components. The company followed up in the fall by adding trailer axles to its reman offerings, and late in the year acquired Canadian-based remanufacturer Mascot Truck Parts.

Caterpillar bought Franklin Power Products and International Fuel Systems, subsidiaries of Remy International. Franklin Power Products remanufactures on-highway light- and medium-duty truck diesel engines and engine components. International Fuel Systems provides remanufactured diesel engine components such as high-pressure fuel pumps, fuel injectors and turbochargers.

Detroit Diesel Remanufacturing acquired DMR Electronics, a provider of remanufactured electronic products.

Eaton for the first time made remanufactured, medium-duty, manual transmissions with Fuller components available at dealerships throughout North America.

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