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Explore the reman life cycle by selecting a stage below.

Reman Life Cycle Market Indicators

 

Product Period:

Ownership:

Truck Value:

Purchase Priority:

Compensation:

Stage 0

Product Period:
Pre-Production

Ownership:
Pre-Ownership

Truck Value:
100% Truck Value

Purchase Priority:
Preparation

Compensation:
None

Stage 1

Product Period:
Warranty Period

Ownership:
1st Owner

Truck Value:
80% Truck Value

Purchase Priority:
Quality

Compensation:
None

Stage 2

Product Period:
Ending Production

Ownership:
2nd Owner

Truck Value:
65% Truck Value

Purchase Priority:
Quality/Availability

Compensation:
Initial

Stage 3

Product Period:
Peak Population

Ownership:
3rd Owner

Truck Value:
50% Truck Value

Purchase Priority:
Availability / Price

Compensation:
Peak

Stage 4

Product Period:
Declining Populations

Ownership:
4th + Owner

Truck Value:
15% + Truck Value

Purchase Priority:
Price

Compensation:
Intense

Reman Life Cycle Strategy

Stage 0

Coverage:
Pre-Introduction

Awareness:
Surveying

Availability:
As Needed

Pricing:
Target Price

Parts Strategy:
Contractual

Warranty:
Same as New

Core Management:
Poicy Set

Core Ratio:
Pre-Introduction

Core Value:
Keep Scrap

Stage 1

Coverage:
Long Blocks

Awareness:
Introduction

Availability:
Few in PDC

Pricing:
Increase New

Parts Strategy:
Initial Validation

Warranty:
Same as New

Core Management:
From Warranty

Core Ratio:
1:1 Scarcity

Core Value:
Low as Possible

Stage 2

Coverage:
Some Replacements

Awareness:
Education

Availability:
PDC Stock

Pricing:
Maintain

Parts Strategy:
OEM Only

Warranty:
Same as New

Core Management:
From Seeding

Core Ratio:
1:1 Core Preserve

Core Value:
Peak

Stage 3

Coverage:
Replacements

Awareness:
Promotion

Availability:
Full Pipeline

Pricing:
Market Based

Parts Strategy:
Peak Reclaim

Warranty:
Market Based

Core Management:
Based on Forecast

Core Ratio:
1:1.2 Start Increasing

Core Value:
Market Based

Stage 4

Coverage:
Consolidation of Part #’s

Awareness:
Obsolescence Management

Availability:
Selected PDC / Over-the-Counter

Pricing:
Reduce

Parts Strategy:
More Scarce / Outsourcing

Warranty:
Reduced for Greater Value

Core Management:
Reduce

Core Ratio:
1:1.5 Increase Ratio

Core Value:
Reduce

Stage 0 - PreparationNext Stage

Coverage

  • Beginning of APQP process Visit APQP Page
  • Awareness

  • Survey dealers for needs & demand
  • Availability

  • Initial seeding of program
  • Timing of launch determined
  • Formula driven
  • Pricing

  • Target pricing established
  • Parts

  • Negotiate service parts upfront
  • During contract of parts for production
  • Ensure available while have leverage
  • Parts are not common for service
  • Validate rotating parts during testing
  • Warranty

  • Same as new
  • Quality can be improved with Reman
  • New Product Introduction Team (NPIT)
  • Core Management

  • Calculate necessary seeding of program
  • Core Ratio

  • Plan for 1:1 ratio initially
  • Core Value

  • Low value, no competition
  • Require core for warranty coverage
  • Keep scrap parts / products from new production
  • Stage 1 - IntroductionNext StagePrevious Stage

    Coverage

  • Post PPAP / PSW for Reman
  • Start with Long Blocks if possible
  • Include key components (turbos, cylinder heads, fuel, etc.)
  • New is typically still in production
  • Awareness

  • New product introduction
  • Highlight engineering improvements
  • Availability

  • Initial stock into PDC’s
  • Demand estimated based on forecast
  • Pricing

  • Increase the price of “new” if possible
  • New is still in production, reman costs are at the peak
  • Parts

  • Use all genuine OEM parts initially
  • Reclaim at its lowest point
  • Specification tolerances at a minimum
  • Warranty

  • Same as new
  • Core Management

  • Core coming in from warranty claims
  • Core Ratio

  • Plan for 1:1 ratio, conserve core which is scarce
  • Core Value

  • Low as possible, little competition
  • Require core for warranty coverage
  • Keep scrap parts / products from new production
  • Stage 2 - Growth/StabilityNext StagePrevious Stage

    Coverage

  • Introduce Completes or Replacement Level engines
  • New engine production has typically ended
  • Awareness

  • Educate dealers on features of reman
  • Reman in full production
  • Availability

  • Stock in PDC’s
  • Minimum inventory levels established
  • Pipeline being managed by historical demand
  • Pricing

  • Maintain pricing as much as possible
  • Based on competitive pressure
  • Parts

  • Still using genuine OEM parts
  • Reclaim increasing
  • Engineering acceptance process required for reclaim and outsourced parts
  • Get access to parts left over from production of new
  • Review capital equipment no longer in used from producing new
  • Warranty

  • Same as new
  • Core Management

  • Core from seeding of program coming in
  • Core Ratio

  • Plan for 1:1 ratio still unless a surplus
  • Core Value

  • Raise to prevent competition from getting access to core
  • Stage 3 - MaturityNext StagePrevious Stage

    Coverage

  • Have full coverage
  • Complete or Replacements
  • Awareness

  • Promotion
  • Try to hang-on to 3rd generation owners
  • Competition preventative measures
  • Availability

  • Full stock in PDC’s
  • Production at highest levels
  • Production based on average demands
  • Stock-out’s detrimental
  • Pricing

  • Market based pricing upon competitive pressure
  • Parts

  • Reclaim at its peak
  • Begin introducing outside sourced parts that have been validated
  • Relax specification tolerances to allow more reclaim
  • Warranty

  • Market based warranty upon competitive pressure
  • Core Management

  • Start considering forecasts and future demand vs. supply
  • Core Ratio

  • Begin considering higher core ratios, such as a 1:1.2 ratio
  • Example: 12 cores to build 10 engines
  • Core Value

  • Market based and determined by future forecasts
  • Stage 4 - DeclinePrevious Stage

    Coverage

  • Start consolidation of offering
  • Reduce content level to cover more SKU’s
  • Awareness

  • Surveying to gauge on-going demand
  • Keep close eye on to prevent obsolete inventory
  • Promote component parts for in-house repairs
  • Availability

  • Keep in selected PDC’s based on fleet sales in region
  • over-the-counter sales
  • Consider alternative channels to reach 3rd & 4th generation owner
  • Pricing

  • Reduced due to competition and vehicle value
  • Parts

  • Pricing increasing from suppliers due to lower volumes
  • Utilize additional cores to reduce new parts
  • Utilize validated outsourced parts as much as possible
  • Specification tolerances are relaxed to a comfortable level
  • Warranty

  • Reduce to reduce price
  • Core Management

  • Begin reducing core inventories due to end of life cycle
  • Fallout of core usually at its highest
  • Core Ratio

  • Increase core ratio based on supply and forecasted demand reductions
  • Core Value

  • Lowest value
  • Key piece to management
  •