SA auto parts makers improve their capabilities
Posted on : Friday, 4th November 2016
Remanufacturing is the rebuilding of old or used products, which are regarded as scrap, to the exact specifications and quality of the original, manufactured product.
Worn out, missing or nonfunctioning components are replaced with new or remanufactured components to original-equipment-manufacturer specifications.
For v
arious reasons, including cost effectiveness and environmental sustainability, remanufacturing is a benefit for companies in the automotive sector and for their customers, Rovelli suggests.
He adds that reduced inventory slashes holding costs and overhead absorption while adding value to the productsultimately increases margins.
“In South Africa, with the duties on automotive products, as well as the cost of transport and currency fluctuations, it is important to consider alternatives to imported products to remain competitive.
“For example, if a starter’s landed cost is R1 000, about 30% of that cost comprises duty, import and holding costs. Therefore, it makes sense to add value and remanufacture the product locally,” Rovelli avers.
He notes that all tiers of customers, including resellers and the public, can benefit from remanufacturing.
Job creation is another key advantage for local remanufacturers. “A team with a variety of skills must be in place to actively seek and source products from the market, correctly identify and sort core products, scrupulously dismantle and rebuild the product, and test the productbefore it is packaged and sold,” Rovelli says.
He believes “it is clear” that remanufacturing will be a mainstream business in the automotive segments: “As South Africa does not manufacture starters and alternators locally, this industry is a way to remain competitive,”.
Probe is currently one of the few local companies that effectively remanufacture automotive starters and alternators to International Standards Organisation standards.
The company has increased its remanufacturing component to 15% of total sales and has set a remanufacturing component target of 50% by the end of 2017. The majority of products currently remanufactured are starters, alternators and Horton engine-cooling, spring-applied clutches.
Remanufactured starters and alternators are also available for heavy-duty equipment such as bus and truck fleets, farming equipment and construction equipment. “In these markets, rebuilt parts are often the fastest and most satisfactory solution to getting a vehicle back in operation,” Rovelli says.
The company’s remanufactured products are referred to as the Probe value-line, and offer the user a good, cost-effective alternative to a new replacement with the same warranty terms as a new unit. Probe further offers a “core return-credit” to customers, which effectively reduces the purchase cost of the product in the hands of the consumer. Effectively, consumers can “trade in” their old starter or alternator, he explains.
With Probe committed to remanufacturing as part of ensuring a sustainable future, the company has also taken a conscious decision to limit or reduce the impact of manufactured products that add to harmful emissions. “Remanufacturing is a sustainable practice that limits the negative impact on the environment by using reusable materials,” concludes Rovelli.
