A three-year-old joint venture between Springfield-based SRC Holdings Corp. and international equipment manufacturer Case New Holland Inc. is quickly proving to be a winning combination, with 2013 gross revenues expected to exceed $110 million and a capital expenditure of $11.6 million planned by the end of 2015. Following the model of past SRC endeavors, the partnership is setting a high service standard for core parts supply, offering build-to-order and a standard stock of remanufactured parts, mainly related to drive-train functions of CNH’s agricultural and construction equipment.
“We’ve been able to launch a tremendous amount of new product into the marketplace in a short amount of time,” says Chief Financial Officer Jason Leone. “That has really been the primary driver of our growth.”
Formed Dec. 31, 2009, the venture has since added an average of 600 product offerings each year and the company expects to add its 3,000th part this year. Expansion was quickly warranted, and the company moved into its current location in northwest Springfield, allowing increased space for inventory, distribution, a call center and line operations.
Leone says the venture’s initial appeal lies in immediate savings for equipment owners, with CNH Reman parts offering up to 30 percent cost savings over many replacement items.
He says – with CNH as a vested partner – remanufactured parts offer a full extension of the manufacturer’s warranty and their use can reduce lifetime cost of ownership by up to 30 percent.
In 2011, the company announced it would create more than 250 jobs during the next five years.
With 188 employees already, CNH Reman plans to create an additional 40 jobs during the next 12 months.
As the the company has developed, internal remanufacturing production has steadily increased to 40 percent, with the remaining 60 percent subcontracted to outside vendors, mainly SRC. However, Leone expects the ratio to be reversed within the next few years.
“We’re constantly recalibrating our stocking strategies to directly support the demand in the market,” he says. “It’s the basic pull-through model. It allows us to give the customers what they want – the right part, delivered yesterday.”
While additional remanufacturing capacity will be phased in, the venture is rooted in a strong customer focus. CHN Reman boasts an 85 percent first-touch resolution on 25,000 annual calls fielded by its tech center.[[In-content Ad]]
