Reman 35 www.aftermarketonline.net SEPTEMBER 2025 Harnessing the untapped potential of AI Powering the remanufacturing renaissance with artificial intelligence is more accessible than ever before, and it holds untapped potential for remanufacturing players across sectors, according to recent analysis by McKinsey’s Automotive & Assembly Practice. Adopting AI tools for forecasting core — previously sold, worn or nonfunctional product or parts intended for the reman process — could help remanufacturers reduce core safety stock by 2-4% and save 3-5% in freight costs, by reducing the cost of expedited shipping, said the report: Powering the remanufacturing renaissance with AI. AI tools could also help remanufacturers reduce overtime expenses, lose fewer sales due to stockouts, and ensure they have the parts that end customers need. In one case, a top technology OEM struggled to match the regional availability of core to demand. The refurbishing team harnessed an AI ecosystem that included a forecasting layer, sourcing algorithm, and valuation algorithm, the report said. At the customer level, the team was able to identify lifetime value and historical purchases by end customer. At the product level, they tracked battery health, service history, and usage rate. They then used all this data to create a personalised trade-in offer based on each customer to help ensure that core was available when the OEM needed it. Meanwhile, introducing AI for pricing in remanufacturing could improve margins by 2-4%, McKinsey said. One independent remanufacturer harnessed AI and machine learning tools to identify the top factors influencing pricing power of niche SKUs, such as manufacturer brand, shipping requirements, and customer characteristics. By implementing these and other practices, the company increased its profit margins by 11-15% and an automated AI tool allowed it to price more than 140 million parts in real time.
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