Page 318 - Orlicky's Material Requirements Planning

CHAPTER 17 Remanufacturing 297

Plossl’s conclusion: There are many apparent differences between repair/remanu -
facturing and manufacturing, but the real differences are few and far outweighed by the
similarities. This chapter will concentrate on the differences.

MANAGING REMANUFACTURING MATERIAL
The starting point for a remanufacturing company is receipt of the core or carcass. This pro-
vides the basic working material for the process to begin. The core or carcass is an item that
is intended for remanufacturing or repair. The finished remanufactured part may or may
not go back to the same customer. If you have ever purchased brakes, a carburetor, or radi-
ator for a car, there is a core charge that is commonly levied when you purchase the part.
This cost is refunded when you bring in the nonfunctioning part. This rebate is to motivate
the consumer of the rebuilt part to return sufficient raw material for remanufacture. Even
with this financial incentive, a significant problem for remanufacturers is to ensure suffi-
cient quantity of high-quality cores that can be remanufactured cost-effectively.
Once the part has been received, the first operation in every remanufacturing com-
pany is the carcass assessment process. This process is also known as inspection and evalua-
tion. A highly skilled person is required to examine the received core and first determine
if the part can be repaired or refurbished economically. Parts that cannot be returned to a
usable condition economically are scrapped at this point. Some carcasses can no longer
be salvaged economically. There is a fine balance between using all material that is
returned and accomplishing the process in a manner that can be profitable. Some com-
panies will set aside material that cannot be reclaimed currently until a later time when
the part’s value may increase as the cores become more difficult to obtain. This assess-
ment process could be as simple as a visual inspection, or it may require disassembly and
testing to determine the part’s internal condition. Care must be taken in this initial oper-
ation not to create a disorganized junkyard where the assessment process is done.

REMANUFACTURING BILLS OF MATERIALS
Once the part has been assessed as having economic value for salvage, it is time to begin
the remanufacturing process. However, parts and capacity are needed to support that
process. Similar to how a traditional manufacturing company plans to have the appro-
priate level of material and capacity available through the use of bills of material (BOMs)
and routings, the remanufacturing enterprise develops the disassembly or teardown
BOM, followed by a reassembly BOM. Figure 17-1 shows a graphic example of what this
complete BOM looks like.
Remanufacturing BOMs typically have the shape of a diamond. A single part is dis-
assembled, component parts are repaired or replaced, and then the parts are reassembled
into a single parent part. The ability to plan for this type of disassembly process requires
a very special BOM function. Lately, some MRP systems have begun to develop and
introduce functionality that specifically meets the needs of the remanufacturer.