This gigantic warehouse, opened in 2019 by Sumitomo Mitsui Finance and Leasing, contains the largest concentration of used machinery in Japan. It handles machine tools, molding machines, medical equipment, construction machines, and much more.
The huge warehouse, one of the largest in Japan by floor area, is organized into a grid system,
with a wide variety of machinery displayed in different sections.
Some customers make a purchase within as little as 30 minutes,
while others spend half a day carefully looking around.
The Re-Machine Higashi-Nihon Yard is in Kawajima Town, Saitama Prefecture. With this facility plus the Re-Machine Nara-Tenri Yard in Nara Prefecture, which opened in 2018, SMFL always has more than 400 machines in stock to meet the needs of used machinery buyers and sellers nationwide.
With a floor area of 10,753 square meters, this warehouse is big enough to accommodate 41 tennis courts! It’s so big, the warehouse workers use bicycles to get around. This is the Re-Machine Higashi-Nihon Yard, opened by Sumitomo Mitsui Finance and Leasing (SMFL) in 2019. It contains hundreds of used machines, with machine tools being the most numerous category. Machine tools, also called “mother machines” in Japanese, are machines used for producing other machines and components by machining, such as milling and grinding, metals and resins, for example, to make molds for smartphones. “By trading used machines that are no longer needed in one factory, we find new opportunities for them where they can make themselves useful in new ways. Our business plays a vital role in Japanese manufacturing,” says Mr. Hiroyuki Matsumoto of the Machine Resources and Marketing Dept.
In the warehouse, machines of every shape and size are lined up by category. Here are numerically controlled vertical machining centers capable of a wide range of machining operations. Over there are horizontal machining centers. And then there are press machines, grinders, and more.
Why is SMFL trading used machines? It does so in order to make good use of valuable machines whose leases have expired. Leasing can be a very useful approach when making capital investment in industry because it enables the lessee to reduce the upfront cost of introducing the latest equipment. There are two types of leases. With a finance lease, a lessee pays lease fees in installments during the lease term, which amount to roughly the sum of the purchase cost of the leased asset plus insurance premiums. With an operating lease, a lessee pays lease fees during the lease term corresponding only to the value of the leased asset minus the residual value after the expiration of the lease term. Even back in the days when finance leases were mainstream, SMFL, ahead of industry peers, began trading used items and, as it gained experience, enhanced its appraisal capabilities.
Furthermore, in line with the increasing demand for operating leases, SMFL developed expertise in projecting the residual value after three or five years of use. Hand in hand with the progress of the leasing business, transactions of used machinery steadily increased to the point that SMFL is now a leading trader of used machine tools and semiconductor manufacturing equipment. The company’s expertise concerning pricing and its appraisal capabilities are based on a growing database of transactions and deep knowledge of machinery. SMFL is satisfying a wide range of customer needs and supporting rapid business development.
Much of the used machinery handled by the Machine Resources and Marketing Dept. is purchased from outside sources. SMFL buys idle equipment and machinery that is no longer needed due to replacement of factory lines, closure, relocation, etc., and then sells the gear to customers who need it. “A unique feature of SMFL’s Machine Resources and Marketing Dept. is that machines that need to be cleaned are meticulously cleaned by machine cleaning experts who know what is required,” says Mr. Matsumoto. Depending on the condition of the machine, detergents and brushes are selected and force is adjusted to prevent damage to paintwork and the machine is polished. Maintenance is performed by specialized engineers. In the case of machines that have been used for many years, SMFL sometimes works with machine tool manufacturers to refurbish* the machines by completely disassembling them and cleaning every element, replacing parts that are missing, and reassembling them.
* To restore to a condition equivalent to that of a new product
“Our customers benefit in two ways by introducing used equipment. Firstly, it is less expensive than new equipment, thus cutting the initial cost and reducing the manufacturing cost. Secondly, they can introduce equipment quickly. Unlike new machines, for which delivery lead times and decisions on specifications can be time consuming, used machines can be delivered to the factory and put into operation immediately after the purchase decision by the customer who has seen and confirmed the actual machine that has been serviced here,” Mr. Matsumoto explains. Not only is it easier to plan production, but it also allows a company to adjust its production system to match order peaks and respond quickly to the diversifying demands of its customers. This means that they do not miss out on business opportunities due to lack of equipment.
SMFL launched the RE-MACHINE website in 2008. In most cases, customers search for machines on the website, check the data and specifications, and then visit the warehouse to see the actual machine. Mr. Matsumoto and his co-workers in the Machine Resources and Marketing Dept. are delighted whenever a customer exclaims, “That machine is exactly what we have been looking for!” or “We can now respond to urgent orders.” Mr. Matsumoto says, “We have more and more repeat customers. They say, ‘Thanks to the maintenance, there are few problems after introduction.’ We take pride in everything we do.”
SMFL has been a pioneer in the used machinery business by focusing on refurbishment rather than final disposal. “We are contributing to the emergence of a circular economy that minimizes waste, while responding to our customers’ diverse needs concerning the purchase and sale of machinery and equipment,” says Mr. Matsumoto. Going forward, in collaboration with manufacturers and dealers, SMFL aims to offer services that create new value. SMFL is also considering business development using digital tools, such as the “assetforce market,” a cloud-based membership site developed by the company for used items, where sellers and buyers are matched and potential buyers can conduct a virtual inspection of the item before making an informed decision on whether to make a purchase.
The warehouse has a ceiling height of more than 10 meters and there are three giant cranes, each able to lift a 20-ton load. The layout is designed with ample space around each machine, allowing customers to navigate and examine the equipment, including opening and closing doors for thorough inspection. Safety measures are prioritized during loading and unloading of machinery. Additionally, power supply facilities are available to enable operational checks. Great care is taken to display the machines in ways that reflect meticulous consideration of customer needs.
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