Re-manufacturing Just in Time




Competition among the Fortune 500 corporations is becoming increasingly time based and cost effective as companies vie to give faster and economical response to customer needs. This case study describes how a high tech corporation, with a large customer service base, saved cash and high inventory dollars to the corpo­ration and its customers by implementing JIT Remanufacturing.

Return and Repair

Analysis of the return and repair process was completed. The analysis indicated that the defective spares were not being utilized in a cost effective method. The defective parts were on the shelf "just in case," marketing increased the forecast of sales, or a supplier failed to supply parts in a timely manner. The analysis indicated the corporation would save five million dollars in procurement costs if complete utilization of defective returns could be accomplished.


If defective returns could be received and directly sent to repair and/or dispositioned at the time of receipt and back to the customer within 10 working days the corporation could save money in safety stock and lead time.

Parts would need to be dispositioned at receiving as to repair, scrap, hold or to failure analysis.

A cross functional team was formed to review the requirements of Remanufacturing, Customer Service Planning, Finance, and Manufacturing.

JIT Remanufacturing Requirements

Through many joint requirements planning sessions and utilizing a 9-step quality improvement process, requirements of the system were identified as follows:

• Disposition of Failure Analysis

— Failure within 90 days of install

— High failure

— R+ Customer (within certain products)

Note: R+ is a software package that measures the reliabil­ity of products.

• Scrap dispositioned defined as

— Not repairable

— Not economical to repair

— Parts not needed per forecast—declining service base

• Hold parts due to known future need

— End of life products

— OEM products and spares

— Last known availability due to engineering changes

• Immediate repair of parts for customer need

• Piece parts and rework bill of material needed to be identified

System Changes

Enhancements to the online receiving system for defective parts were defined as follows:

• Retrieve data from the forecasting system for repair/scrap flag determination.

• Retrieve data from customer service data collection of 90 day failure and R+ for failure analysis.

• Create several tables for failure analysis and repair locations by commodity and product.

• Online receiving system was enhanced to encompass the additional dispositioning of parts.

The forecasting system was enhanced to calculate customer service needs by controlling all world wide inventory and knowing the status of that inventory was for leadtime and new buys:

• At depot/customer site

• Intransit from depot as defective

• To repair

• In repair

• Intransit from repair

• In good spares or defective spares inventory

• Intransit from new build manufacturing

Yield factors for repair were estimated or calculated and input into the forecasting system.

Flags were set in the forecasting system for repair, scrap and/or hold. These flags were set by the forecasting system based on the parameters above or could be overridden by the planners.

A material requirement P.C. Package was purchased to maintain the rework Bill of Material and forecast piece parts needed for repair.

To be Continued


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