Caterpillar seeks to push remanufacture into restricted markets
Caterpillar is examining how it can increase global access to its remanufactured products, especially in developing markets where trade barriers exist.
Within its 2013 sustainability report, the company revealed it is working with policymakers, government regulators and customs officials in several countries to try and open up markets and expand remanufacturing options for customers within those regions.
According to Caterpillar, there are two main types of trade barriers – tariff and non-tariff. A tariff barrier might include excessive fees or taxes levied by a certain country that significantly increase the customer’s cost of choosing a viable remanufactured product.
A non-tariff barrier might involve customs officials categorising remanufactured goods as used goods, which cannot be imported under any circumstance or can only be imported after complying with special inspection, certification, licensing or other onerous requirements.
Similar barriers are also faced when customers seek to export their core parts and return them to Caterpillar in exchange for a remanufactured engine or component. The company argues that as all of its remanufactured products carry the same durability, performance, quality and warranty equal to that of a new component, they should be treated as such.
Since 2006, the company has seen a 64% revenue increase in its remanufacturing business. Last year it took back 174 million pounds (in weight) of end-of-life materials – up from 171 million pounds the previous year.
In reflection of this, last year Caterpillar created a new customer goal in its business – to grow remanufacture and rebuild business revenues by 20% by 2020 compared to a 2013 baseline.
One of the ways it intends to meet that goal is through its various retrofit kit offerings, which are available to customers through the Cat dealer network. In 2013, Caterpillar expanded its range of dynamic gas retrofit kits for selected engines. These kits allow for maximum substitution of diesel fuel with natural gas during high pressure pumping operations.
Another product stewardship area Caterpillar is working on is an initiative called ‘job site efficiency’ (JSS) to help customers capture maximum value from their assets by improving on-site performance and sustainability. Each solution is tailored to the customer and can range from a short-term consulting engagement to a multi-year fleet ownership and maintenance contract.
Agriculture is one of the latest industries where JSS is being applied, primarily for customers with large dairy and feedlot operations. This sector now accounts for approximately 15% of total JSS volume.
According to Caterpillar, the results have been significant. On average, agricultural customers have been able to reduce idle machinery times by 20%, and operator-caused events, such as equipment wear and tear and safety issues, by 25%.
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