– By Rob Wilson –
Making the right decision on purchasing parts is of critical importance to fleet operators. Parts failures can affect safety, operational and financial performance. With recent developments in Free Trade Agreements and access to parts sourced on-line, a sound parts procurement policy is essential.
It used to be that parts were either Original Equipment Manufacturer (OEM) or After Market. This distinction no longer adequately covers the range of parts available in the market.
OEM, or genuine, parts are the same as those used to originally build the fleet item. The benefit of OEM parts is that credible suppliers will apply the same high quality design, manufacture and testing regimes to replacement parts as they did to the original part and there is no question of compromising compatibility, performance and warranty. The flip side is prices are often high – very high. In a recent exercise I discovered the price to replace and fit five seat belts in a passenger sedan was 20% of the cost of the car!
After Market: This is where the confusion can begin. Some after-market supplies are high quality products (some argue better than the original) but others aren’t. After-market parts include recognised stand-alone brands and clones or “will-fit” products.
These parts can range from high quality, fit for purpose products through to sub-standard and unsafe components. To add to the confusion some after-market manufacturers use similar product identification numbering to the OEM making it more difficult to make a distinction.
Counterfeit parts are illegal imitations sold as OEM parts. This is perhaps the most concerning of “after-market” products because it deceives the buyer and can carry a substantial safety risk. There have been some notable examples of counterfeit parts recently. Toyota Australia took Federal Court action against two independent retailers for selling “counterfeit” airbag spiral cables.
The ACCC recently ordered a recall of brake pads (for use in Toyota Hilux and Hiace vehicles) imported from China that contained asbestos. There has also been recent concern about counterfeit wheels imported from China that can fail under relatively low impact.
The Federal Chamber of Automotive Industries (FCAI) reports of testing undertaken by Mercedes-Benz Australia Pacific and GM Holden where fake wheels fractured after hitting a pot-hole at 50kmh.
Second hand parts are a further alternative which pose safety and reliability risks. This is primarily due to the reason that the life history of the part is not known and the part could be subject to fatigue or other degradation.
So, how to work through the sourcing of spare parts in a way that ensures safety and the best outcome for your organisation?
It is essential that fleet operators have a documented procurement policy for spare parts. The policy should state a default position (such as OEM only) and define processes and authority for varying that position. Importantly the policy should take a risk based approach recognising the likelihood and consequence of failure.
Any decision to use after-market parts needs to be taken in light of the part’s function, the quality standards applied and the consequence of failure. One approach is to consider a hierarchy where parts relating to safety are subject to the highest scrutiny and standards, followed by parts that carry operational or financial risk, down to parts where failure carries little consequence and therefore have the greatest latitude in procurement.
The Australian Road Transport Suppliers Association (ARTSA) shares an interesting approach to this in their article: How to Develop a Replacement Parts Purchasing Policy .
Rob Wilson is an experienced Fleet Manager and Director of fleet consultancy company 4C MANAGEMENT SOLUTIONS
