Hunting for success, part 4: A classic case of disruption

This blog is part 4 of a 4-part blog series.
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While technology has created challenges and disruption within the remanufacturing industry, technology also has brought opportunities, and real growth potential. By leveraging their combined strengths, market access, and capabilities, OEMs and independents will fully realize the potential that the automotive market offers.

With new automobile and light truck sales just now returning to what they were 12 years ago, both OEMs and independent remanufacturers seeking growth need to adjust their business models accordingly. That means joining forces, each contributing their particular strengths and expertise, to collaboratively address business challenges strategically and holistically.

There is valuable – but dispersed – knowledge in the supply chain, relating to distribution and product characteristics, that needs to be captured and integrated into remanufacturing processes and go-to-market strategies to assure continued success and growth for both OEMs and independent remanufacturers. The recipe for achieving this success is a well-defined partnership between an OEM and an independent. However, those alliances must begin with a comprehensive, well defined due diligence process that looks to optimize the strengths of the prospective partners while minimizing the risk of a poor strategic or cultural fit.

There is no argument that there are significant opportunities in remanufacturing for companies, investors, and, most importantly, for society – and not just in the automotive sector. Recycling, reuse, and remanufacture, according to a 2014 Ellen MacArthur Foundation report, “Towards a Circular Economy,” could generate more than $1 trillion for the global economy by 2025, and create 100,000 new jobs in the next five years. At the same time, remanufacturing can help preserve a global environment and biosphere increasingly suffering from the depredations of the old linear manufacturing model, characterized by high energy usage, waste, and pollution.

In the automotive sector, reaping the benefits of remanufacturing will take time, effort, and a reordering of mindsets. But it will be well worth it. A carefully crafted merger or acquisition, partnership or joint operating agreement, with the strategic intent clearly defined for both parties, can provide stronger solutions, more quickly, to the remanufacturing industry. That will generate enhanced revenue and profits for all stakeholders, and provide value throughout the supply chain.

Read the original and full article at FTI Journal.

This blog is part 4 of a 4-part blog series.
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