Lean BI helps Remanufacturers


Remanufacturing has all the challenges of manufacturing PLUS more variability. Variability is introduced by core parts and in the purchased parts required for reman assemblies. The increased complexity can be controlled in two ways; using tribal knowledge or with data. However tribal knowledge can only carry an organization so far. As growth occurs employee turnover, new products or production volume increases can make tribal knowledge an unreliable approach. Reliance on data ensures repeatability and minimization of the costs associated with handling the variation remanufacturing introduces.

Optimum inventory of variable-sized parts

Optimum inventory of variable-sized parts

Remanufacturer's challenges

Background: Product life cycles are extended in remanufacturing (reman) by machining a part enough to get “clean-up” and no more. Compared to new manufacturing, where a single sized part would mate to this machined surface, the remanufactured part could take 2 to 4 sizes of mating parts (i.e. bearings, pistons, rings...) depending on where the part "cleans-up". 

  • In reman, the quantity per unit for some parts in a Bill of Material (BOM), are listed as less than a whole quantity per unit. This represents the expected usage percentage in some theoretical build quantity (not in a single unit)    
  • The percentages start as engineering estimates, actual results will vary in each run and will probably change over time. If purchases are made strictly to BOM percentages, you’ll probably run out of one size and have excess of another (causing interrupted runs and potential excess inventory.) 
  • Safety stocks are the best option for ensuring you don't run out of required materials. However, as a  business grows, safety stocks defined by tribal knowledge lead to the previously described issues. If unaddressed for an extended period this leads to oversized problems. 
  • When organization use usage data to define safety stocks, (in lieu of tribal knowledge) it is usually an irregularly scheduled one-off effort. Data is combed through manually. Due to the effort required, its not performed as often as it should and sometimes only the “high runners” are addressed

How Lean BI helps control variable-size part inventories

  • We take the relevant data (usually from multiple sources) and automate combining and manipulating it. The output is a safety stock analysis and rating of their appropriateness (based on usage rates and trends)
  • You’ll get quick and easy results from the analysis so team members aren’t spending non-value added time doing data manipulations or manual comparisons. They will remain focused on changing system data to reflect the analysis results, to keep production areas running smooth and minimize excess inventories
  • Your team will perform the analysis more frequently to eliminate major lag time if unexpected changes occur. 
  • We'll create graphical displays that show how safety stock inventories are tracking to their defined levels. The entire team will stay appraised of safety stock status.


Core Component Safety Stocks

Core Component Safety Stock

Remanufacturer's Challenges

  • Core component defects may be revealed in machining, some of which can not be detected before machining. In specific parts this can be a routine issue.
  • If you’re using large batch production methods (which generate large amounts of WIP and excess inventory) the impact is hidden. Expediting replacements occurs, but the underlying issues are either not identified and addressed and/or safety stocks are not defined and implemented. (Mass production masks more than scrap, see Costly Mass Production Practices)
  • In smaller batch production, unexpected fallout means you have mismatched part sets. If the problem can’t be fixed in teardown, safety stocks of high fallout components is the only option for maintaining matched set material flows

How Lean BI Helps Control Core Component Safety Stocks

  • We take your relevant data and automatically manipulate and combine it to determine fallout rates per component and recommended safety stock levels. 
  • You’ll get quick and easy results so planners/supervisors can maintain safety stock levels based on actual fallout rates.
  • Even when part numbering schemes prevent the easy review of core versus machining part numbers, we'll create a solution.
  • Graphical displays will show how safety stock inventories are tracking to defined levels for team awareness

Costly Mass Production Practices

Costly Mass Production

Remanufacturer's Challenges


  • Some organizations still use mass production practices. Mass production is recognized by large batches of parts, individual component scheduling and material moving in and out of a warehouse. Production operators see no linkage from the part they produce to a particular end item.  
  • In contrast, organizations that focus on non-stop material flows once teardown occurs are able to eliminate multiple wastes. The result is a significant reductions in inventory, scrap, WIP, indirect costs and higher quality outputs




How Lean BI Helps Lean out Costly Mass Production Practices

  • Lean material flows do not require abandoning all existing processes and rearranging the facility. With Lean BI it can start with scheduling data, team visibility to that data and new material movement “rules.” This is a low risk way of moving to Lean manufacturing. This introduces Lean Thinking to your team members before significant costs are sunk into facility rearrangements
  • The change will not be easy, you’re accomplishing the hardest part of a Lean transformation - changing people’s thinking
  • Lean BI drive’s accountability by getting team agreement on a new process prior to starting, then reinforcing those processes in daily meetings. Data displays will create accountability for staying the course till the changes are routine