Battle of the bulk: parts and components

Every OEM and manufacturer supplier wants to offer the best service in parts and components, but the presence of independent suppliers and “will-fitters” dip into the market. John Wyatt reports

Don't do it,” says JCB's Service Director Stephen Fox when asked about customers who might be considering buying parts and components from non-manufacturing sources, such as independent suppliers and non-OEMs. His advice mirrors that of most manufacturers regarding the purchase of aftermarket parts and components. The reasons for this collective stance are far more complex than just a concern for lost sales.

The primary argument, according to Fox, is quality and performance of the parts purchased. Since many parts and components are proprietary, using non-OEM parts is considered a short term solution that could develop into a long term problem. High quality aftermarket parts are readily available from the manufacturers and OEMs.

To retain its customer base in the aftermarket and to combat independent suppliers, most manufacturers have improved their parts availability and prices. Haulotte has increased the stocking level and line item inventory of its regional distribution center, bringing its parts stocking numbers up to 50,000 items, says Kenneth Welsh, product support manager, Haulotte US Inc. The French-based company, which announced last year a plan to invest $20 million in its US operations over the next three years, has added a 25,000 square foot parts warehouse In Atlanta, GA. The company also has warehouse facilities in Frederick, MD and Rialto, CA.

Manltou North America is putting the finishing touches on a major expansion of its parts distribution facility in Waco. TX. According to Steve Peacock, director of aftermarket sales support, the new warehouse will allow Manitou to quadruple its parts storage capability. “This of course will further enhance our level of customer support, and also allow us to the capacity to grow in other areas of the aftermarket business,” he says.

One of Genie's most recent service offerings is the training of technicians, says Steve Gooding, director of technical support. He says the company has expanded its technical training team and offers classes both at the factory, as well as in the field. The concept is that by training field technicians, the working life of the machine is increased.

JCB's Fox says its latest aftermarket service is a range of security options for factory and dealer installation. Also, JCB is in the final stages of developing a telematics program, which will be announced at Conexpo-Con/Agg in Las Vegas next year.

Snorkel has been offering free estimates on its electronic monitoring systems for its big boom product line, says Dave Smith, director of product support. Snorkel has a 90% fill rate, which means that for every 100 orders placed, 90 are sent out that day, Smith says. “We have an old EMS system that we are repairing and testing free of charge. In addition, there is a new system customers can retrofit on their machines that is more cost effective than replacing,” he explains. “When they use the retrofit, it matches the new machines that are coming off the production line.”

JLG, which markets more than 6,000 SKUs (stock keeping units) of competitive parts for its lines of aerial work platforms and telehandlers, offers online parts ordering. “Customers do not want to cross-reference part numbers, they want to identify that part online, make sure it is what they need, point and click on the part on our online schematic, and add it to their shopping cart. It is a seamless process to the customer,” says Tim Morris, vice president, North America market development sales. JLG's ServicePlus locations strengthen this endeavor by supplying parts and components, allowing area customers to get products in the same day.

Independent competition

Even with these improvement programs, manufacturers still have not squelched the competition. Parts supplier C-Tech Industries, located in Cincinnati, OH, offers joystick controllers and parts, control boxes, electrical parts and other consumable items. According to its Owner Greg Greene, the business is very good. Currently, controllers and shifters are the highest in demand for his company. He says all the company's aftermarket parts meet ANSI regulations 92.6 standard Para 5.6: “When parts or components are replaced, they shall be identical or equivalent to original aerial platform parts or components.” He says the parts the company sells are identical to what the OEMs put on the machines, and a lot of times, the same part.

“The quality of aftermarket parts have gone up greatly, which is evident. JLG is chasing us because we've taken a lot of their business, and they don't like it. We not only sell to the aftermarket, we sell to several of the OEMs,” Greene says.

Equipment Parts Wholesale Inc., (EPW), an independent supplier located in Fresno, CA, is averaging 25 to 30 new customers per week, according to Brian MacFarland, general manager. The company sells parts and components for all aerial manufacturers and some for telehandlers.

“We sell exact OEM replacement parts, from nuts and bolts to switches, controllers, chargers, wheels and even weldment,” says MacFarland, adding that the company posted a small increase in business from last year. Although EPW is not sending out as many parts as last year, the increase stems from a growing and solid customer base, he says.

EPW sells exact OEM parts (it even helps facilitate MEC's scissor parts department), and the company is also is competitive in regards to same day shipping, 24/7 parts service, wholesale pricing, offers a one-year warranty and a no-minimum order requirement. But it is the company's promotions that seem to offer a niche to its service. In September, the company celebrates its six years in business and part of the anniversary promotion is for each customer that purchases $2 million of merchandise, they get a Corvette.

Another advantage to EPW's growing business is its location in California, where businesses can ship out material later. If at the end of day a customer in the Eastern US should need a part, EPW has the advantage of later shipping because it is on Pacific Standard Time. This allows the company to cultivate customers abroad in the UK, Europe and Australia. MacFarland says EPW's international customer base is roughly 15%.

Yet, even with the company's inventory of “thousands of parts,” one service EPW does not offer is remanufacturing or refurbishment of equipment. MacFarland says he doesn't envision the company getting into this line of work.

Reconditioned goods

Conversely, most manufacturers do offer refurbishment and/or remanufacturing capabilities, especially for its own machines. Snorkel calls this “reconditioning,” and like an auto mechanic, the company's service technicians will flag any other issues a vehicle has while servicing a machine that a customer has brought in. According to its Service Manager John McKibben, the machines “leave our doors safe.”

“JCB offers an extensive range of remanufactured components via our worldwide dealer network,” says Fox. “This includes major components such as engines, transmissions, axles, hydraulic and electrical components. The product offering is under continual review and our focus is upon providing our dealers and customers with the most cost effective solution that meets their individual requirements.”

JLG is among the first manufacturers to offer machine reconditioning, Morris says. Beginning as JLG Equipment Services more than 15 years ago, the operation is now named ServicePlus, with reconditioning and repair centers in Houston, TX, Atlanta, GA, Bedford, PA and a new facility opening in Riverside, CA. Internationally, the company has a facility in Tonneins, France.

“We do a variety of repair work for our customers,” says Morris. “Not only JLG machines, but also the equipment [customers] have brought from our competitors.” However, the company will not recondition competitor brands.

Genie also has the ability to remanufacture and refurbish its equipment at locations throughout the world, says Gooding. “It is a program that substantially increases the residual value of our products,” he says.

Haulotte's Welsh says the company has considered offering reconditioning services. Manitou does not offer this level of servicing, yet.

C-Tech equipment does offer refurbishment to its products. “We supply some of the major refurbish facilities with new product,” says Greene. “Doing actual complete machine refurbs is something we have thought about, but I don't see it in our future.”

The counterfeit issue

Since manufacturers, for the most part, offer a full line of parts and components in their parts inventories, as well as service capabilities, and a distribution network that can supply those parts worldwide, is part counterfeiting an issue? The consensus is that counterfeit parts are a concern, although manufacturers have yet to report a panic situation. “I don't believe we have a problem with counterfeit parts, but there are certainly issues with ‘gray’ [market] parts which are sold as alternatives, not genuine parts, says Peacock, who asks if in such a global marketplace if anyone really knows where everything comes from.

Genie's Gooding says that counterfeit components are a risk, and only through quality control can this market be monitored and eliminated. He adds that with emerging markets developing, so does the risk of more non proprietary parts surface.

While using non-OEM parts can seem like a practical alternative, especially when repairing an older model machine, there are still safety issues to consider, especially when dealing with machines that lift people and materials to high locations. Should a lesser quality part fail, liability could be traced to the decision to use a non-OEM part, even though the fix was quick and inexpensive.

“Having been in the aerial work platform industry for more than 30 years, I have observed both the risk and reward of using components from sources other than the original equipment manufacturer (OEM),” says Gooding. “The reward is that you might get the part faster and for less money. The risk is that it won't be the right part and time is lost. Adding to the risk column is the fact that we as manufacturers are making continuous improvements to the products and the service parts on a regular basis.”

McKibben at Snorkel says back years ago, rental yards would carry a stocked inventory of parts, though eventually these random items would just sit idle. Now, the manufacturers are expected to carry these parts, serving as the customer's inventory.

McKibben and Smith say they believe the market for counterfeit parts is a concern but “not a big deal.” The company uses logic to argue why it is unwise for customers to use non-OEM parts on its machines. Smith says that customers need to understand the liabilities associated with using parts that were not designed for a particular product line.

“Counterfeit” is a word JLG prefers not to use, instead favoring “will-fitter.” Morris says that any time a part is installed in equipment that is not an OEM part, it is an issue. He does think that there are many will-fit part suppliers emerging, suggesting that the market is strong and growing.

“We understand we have to earn our customers' aftermarket parts business,” says Morris. “By providing easy methods to order, having the parts in stock, and providing better service, we hope to be the clear choice for our customers. Speed and efficiency are critical.”

Often, using non-OEM parts is unwise as their use may compromise the validity of the warranty of the machine. Warranties protect the owner from a variety of costs and the use of a non-OEM part can negate a warranty.

“As JCB's machine park continues to grow in North America, there is a concern that this market [counterfeit parts] is developing,” says Fox, who says that all OEM parts purchased via the aftermarket carry a 12 months warranty when installed by one of JCB's dealers.

This seems to be exactly the point manufacturers want to get across to customers. By stocking a large inventory that will satisfy customer needs, suppliers need to be aggressive in regards to fast turnaround at a reasonable price. Should their commitment to the aftermarket become lackluster, the “will-fit” market could become more than a threat.