Remanufacturing – A New Business Model for Light-Vehicle OEMs

Mar 04
2013

I wanted to share a recent white paper I prepared for SAE International focusing on the hot topic of remanufacturing in the light vehicle OEM world.

“The combined market value of GM, Ford and Chrysler (the estimated value that is part of Fiat) is less than that of combined value of Deere, PACCAR and Caterpillar, which have only 25% of the annual sales volume of the “Big-3.” GM, nor Ford, which for decades were ranked within the top 25 largest US- based corporations, measured by market capitalization, do not currently even rank within the top 100 corporations.”

Read the article in its entirety here and learn about my proposal to the Big-3 auto OEMs: Remanufactured Products: A New Business Model For Light-Vehicle OEMs

The Frugal Engineering Paradigm Shift For Product Support

Jun 18
2010

Strategy + Business recently published an article on frugal engineering, discussing how providing new goods and services to “bottom of the pyramid” customers requires a radical rethinking of product development.

As the domestic economic growth of industrial nations remains at 0% to 3% over the long term due to demographic issues, OEMs will be more aggressive in seeking revenue growth opportunities in Developing Nations. The Developing Nations buyers of products cannot afford the sophisticated products that the Industrial Nations currently acquire, but they are beginning to be able to purchase “stripped down” products that cost 10-25% and perform 85% of the capabilities of that of a product sold by OEMs based in Industrial Nations. In order to develop products to meet this new demand, OEMs will have to focus upon “frugal engineering,” a design concept that develops a product that is simple, low-cost and delivers a highly focused solution that appeals to Developing Nation buyers.

A product that is frugally engineered will have a huge impact upon an OEM’s Product Support business strategy. Many of these products will be platforms in which as the end-users increase their economic prosperity, they will demand additional capabilities delivered as upgrades throughout the life of the product. Understanding Product Support lifecycle management will be critical for successfully deriving the profit margins required for the risk exposure in entering these markets.

The Illegal COTS E-Waste Trade

Jun 15
2010

As DoD employs more COTS electronic components, it will face challenges in the future to dispose of these components when performing technology refresh processes. Assuring where these obsolete components find their final resting place will become an important activity for Product Support management, be it the PM Office, the Life Cycle management Command (LCMC) or contractors. There is currently an effort by the US Government and INTERPOL’s Global E-Waste Crime Group, to track these obsolete products to ensure that they are disposed of properly. Criminal organizations are involved in diverting these products and dumping them into illegal waste sites in underdeveloped nations at a fraction of the cost of disposing of them in a developed nation. End Of Life (EOL) management will require serial number tracking and an audit trail all the way to the final disposal process to mitigate the risk of these obsolete products taking a wrong turn and harming the environment, as well as posing dangers to the workers illegally handling these materials.

US Second-To-None For Product Support Prowess

Jun 14
2010

Americans have been bombarded by the Main Stream Media (MSM) touting the demise of US manufacturing base, and in turn the demise of the demand for the resources (parts, maintainers, tech support, and others) employed during the processes of the Product Support stage of the lifecycle of a capital good….but the MSM is a foolish bunch that is clueless regarding our true manufacturing might, and in turn our true Product Support prowess which is second-to-none in the world and will remain so for the foreseeable future.

Here are some facts about the US manufacturing sector from a recent article from Barrons:

“The U.S. economy is the largest and most productive on the planet. With just 4.6% of the global population, the U.S. accounts for roughly one-quarter of global output, generating more output in a year than the next three largest economies (Japan, China and Germany) combined. America’s economy is three times the size of China’s; the per capita income of China is only about 10% of that of the U.S.

The United States is a manufacturing superpower; we’re still in the business of making stuff, despite incessant reports to the contrary. We shouldn’t equate the demise of Detroit with the death of U.S. manufacturing. The U.S. makes more goods in a year than any other country, although America’s share of global manufacturing output was roughly 17.5% in 2008, down from 22.4% in 1990 and about 20.5% in 1980.

Many U.S. manufacturers have held their own the past few decades, even in the face of stiff competition from Japan, Germany and China. China’s share of global manufacturing has increased sharply over the past decades, hitting 17.2% in 2008, close to the U.S. number. However, the Chinese figure includes mining and quarrying, and electricity, gas, and water supply, in addition to manufacturing, and most of China’s gains came at the expense of Japan, South Korea, Mexico and others — not the U.S.

The largest exporter in the world is neither Germany nor China. It’s the U.S., despite annual trade deficits and all the chatter about U.S. companies not making anything the world wants to buy.”

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