Case Study: Caterpillar Remanufactured and Rebuilt Products
Caterpillar: Helping customers build a better world
Caterpillar are not new to the topic of Sustainability, they have been publishing an annual sustainability report since 2005. They see sustainability as a key part of their vision to "Help our customers build a better world". One of the ways that Caterpillar do this is by offering Remanufactured and Rebuilt products.
What is a Remanufactured product?
Remanufacturing is where the manufacturer takes back products at the end of their life and returns them to a "same as new" state before selling them to a new customer. It requires the design of a service infrastructure for taking the products back and a different approach to product design that enables cost-effective remanufacture. Caterpillar uses this process for many of its engines, reducing waste, lowering greenhouse gas production and minimising the need for raw materials. Caterpillar is a global leader in remanufacturing technology, recycling more than 68 million kg of end-of-life iron annually.
What is a Rebuilt product?
Caterpillar's Rebuild program increases the lifespan of equipment by enabling customers to updates their products through a manufacturer certified program. Caterpillar provides dealers with information, training and tools to help them decide which parts can be successfully reused whilst achieving the expected lifespan of rebuilt components. This helps use materials and energy more efficiently.
Caterpillar say they take a "systems view" of the life of their products, deliberately designing them for multiple lives. They sum up this lifecycle in the diagram below.
What do Customers get out of it?
Caterpillar believe that remanufacturing their products gives their customers performance and reliability similar to new products at a much lower cost, whilst also reducing the impact on the environment. Rebuilding products extends their service life, and the over the counter availability of components helps maximise productivity.
The company claims a long list of customer benefits for these products, including:
- Ensuring maximum productivity
- Increasing reliability and equipment up-time
- Ensuring cost-effective performance
- Receiving a like-new warranty
- Increasing the customer’s return on their investment
- Providing the customer with a variety of repair options to meet their service needs
- Providing the customer with a higher resale value
- Providing the lowest total owning and operating life cycle costs
- Preserving the majority of energy and materials required to make the original component or machine
How does Remanufacturing work?
Once a returned core arrives at a "Cat Reman facility", it is disassembled down to the smallest part, losing its original identity. Each element goes through a cleaning process and is inspected against strict engineering specifications to determine if it can be effectively salvaged. Accepted worn out components are then converted into production ready material through advanced salvage techniques which use the same rigorous engineering process that goes into new Cat machines.These techniques make it possible to return otherwise unusable core parts to the latest performance specifications. Caterpillar see this as a key differentiator of their remanufacturing program.
What does the Business get out of it?
The remanufacturing program is based on an exchange system where customers return a used component (core) in return for remanufactured products. This fundamentally changes the relationship of the business with its customers, creating the expectation of a long-term on-going relationship, rather than a one-off transactional sale. In the long term this maximises the value Caterpillar obtains out of each of its customers. Caterpillar clearly also see their commitment to sustainability as a key part of their value proposition, and a reason for customers to choose them over their competitors.