Dennis Fotopoulos
Director - Strategic Business Development

Reversing the Decades-Old Trend to Outsource Remanufacturing

In May of this year, global imaging company Canon announced plans to expand its manufacturing capabilities. Given the state of the global economy, they haven’t chosen to do so locally in Japan, nor in the manufacturing-rich and emerging economies of the rest of Eastern Asia. Rather, they have chosen to build it in Virginia, the heart of the eastern United States.

Once the epicenter of global manufacturing, US companies have moved much of their manufacturing outside of the country over the past decades. Canon breaking ground on a new manufacturing facility in the US reverses this trend and creates jobs and certainly eliminates some of the supply chain challenges that they would have faced by importing products from around the globe for resale in the US.

What are the reasons for the trend reversal? In Canon's case, one reason is the positive impact on reducing the CO2 footprint. Tsuneji Uchida, president and chief operating officer, Canon Inc. said in a statement released by Canon, “the combination of producing, selling, collecting and recycling cartridges locally, and eliminating the need to transport products around the world, will allow us to have a positive environmental impact by helping to reduce CO2 emissions worldwide.”

Another reason comes right down to the bottom line savings in time and money. Uchida added that “Canon’s new automated production system will enable the Company to maintain cost competitive manufacturing, better manage labor costs and deliver products in a timely fashion.”

There it is – Finally, the perfect storm that results in localized cost-competitive manufacturing. Until recently, these winds have only skirted US shores, not making any significant impact on the economy, the environment and corporate bottom lines. Now, however, the front has a head-on bearing for us, and it has become the perfect time to turn this storm into a domestic windfall for manufacturing and re-manufacturing companies of all sizes.

The Trend is Clear - Domestic Outsourcing is the Answer
Canon's move validates what remanufacturers across the country have been suggesting for some time – domestic remanufacturing saves time, cost and the environment by simplifying logistics and reducing a company’s carbon footprint. Further, considering the weak dollar and the rising cost of energy worldwide, it makes more sense than it ever has to localize the remanufacturing of IT maintenance items and high mortality parts found in computers, copiers, faxes and printers.

Corporations that do not have the manufacturing infrastructure that companies like Canon have can now look to local manufacturing and logistics companies for solutions that were financially and logistically prohibitive in the not so distant past. Larger service companies and OEMs alike are calling on remanufacturing companies like Metrofuser for reclamation, defective inventory management, recycling and remanufacturing, and warehouse logistics.

As larger OEMs continue to consider domestic remanufacturing and logistics solutions to increase margins and reduce logistical overhead, will US remanufacturing companies answer the call? Will DeMuth, CEO of Metrofuser states, “Over the last year, Metrofuser has invested significant time and resources into providing (those solutions).” He adds, “our commitment to develop and improve service solutions has already helped OEMs maintain their commitment to their own customers, the environment, and their bottom line as we provide them with quality remanufactured laser imaging system components.”

Metrofuser’s August, 2008 move to its new technology center and corporate headquarters in Roselle, NJ “will enable us to expand our operations even further,” DeMuth said.

Fig 3 Source Deloitte Research