OEM or aftermarket parts?

Every piece of capital equipment is a mission critical asset. When it breaks down or needs its periodic service, owners want the very best repair or maintenance job for their valuable asset. One of the key decisions to make is whether to insist on OEM parts or to opt for generic aftermarket spares instead, writes Munesu Shoko.

There is seemingly a growing aftermarket parts market, especially on the back of current difficult economic conditions. This article unpacks the differences between aftermarket and original equipment manufacturer (OEM) parts, as well as investigating the benefits and downsides of each option.
To start with, what is the difference between OEM and aftermarket parts? According to Sandro Scherf, CEO of Pilot Crushtec International, OEM parts are in most cases, specifically manufactured to compliment the design of the machine/equipment. They are engineered to deliver certain desired outputs and depending on what the part is, for example, a hydraulic pump – could be designed to supply a specific pressure to achieve optimal performance.
“The method of mounting might also be different for each piece of equipment. A generic part or pirate aftermarket part could be very similar in design, but could have hugely negative effects as it may not only damage the equipment, which not only results in loss in performance, but also voids the warranty of the equipment,” explains Scherf.

Price vs. quality
The growth of the aftermarket parts is said to be largely driven by the price factor. Should price determine what parts equipment owners buy for their mission critical assets?

According to Scherf, operating costs are critical and a focal point for any operation. “We are obviously sensitive to the costs incurred by clients when taking on OEM vs. generic/pirate aftermarket parts, however, the long-term and daily operating returns are usually in favour of selecting OEM goods,” says Scherf.

He adds that when customers invest millions of rands into capital equipment and use generic aftermarket parts, they take on a high level of risk, not only in the investment, but also with a potential breakdown which occurs as a result of an aftermarket generic part.
“A breakdown is a highly costly situation where the fleet owner can lose hundreds of thousands of rands in lost production. In extreme cases, equipment fitted with generic/pirate parts can be damaged to such an extent that the piece of equipment will require major repair work after that, obviously translating into even bigger costs,” adds Scherf.

Scherf advises that fleet owners should be aware that generic/pirate parts may lead to catastrophic machine failures, which results in not being able to deliver on contracts and furthermore, losing money, time and possible reputational damage from untimely and constant failures.

Major benefits
While they represent a major cost upfront, there are an array of benefits associated with buying OEM parts in the long run. Primarily, with OEM parts you get the perfect match for your machine.

Scherf says keeping equipment to OEM specification is always a benefit for various reasons, including retaining the value of the equipment; retaining all standard and additional factory warranties; all equipment is serial number related, meaning ease of getting spares that will fit accurately and deliver expected performance; as well as peace of mind that one has purchased correct parts which won’t cause any additional damage to the equipment.

“There are several other benefits associated with OEM parts. A longer lifetime of wear parts directly reduces the cost per ton. To maximise production, fleet owners need to ensure that their crushers’ uptime is maximised. Meanwhile, support and information is easier to access through OEM goods, whereas generic/pirate parts may be once-off, and impossible to source reliable information on,” says Scherf.

He adds that consistency of quality from OEM parts is almost guaranteed, whereas generic/pirate parts are usually sourced from a variety of locations, based on cheaper pricing.

Justified costs?
The general reasoning by fleet owners who opt for aftermarket parts is that OEM parts are generally expensive – in some instances they are said to be almost 60% more than their aftermarket counterparts when it comes to price. Is the premium price for OEM parts justified?

According to Scherf, OEM parts pricing has always been perceived to be more expensive than generic/pirate parts and in most cases the pricing is either competitive or slightly higher than generic/pirate parts. “This is due to several reasons, such as the R&D which goes into the production of the parts themselves, the amount of information associated with the parts, such as parts maintenance, as well as the level of support provided to the parts, such as warranties and guarantees. The consistency of materials and high quality of raw materials used in the parts manufacture also contribute to their pricing,” says Scherf.

Scherf adds that the most important aspect is the level of new technology being developed year after year, and the amount of improvements to the performance of OEM parts. “Manufacturers are continuously under pressure to design, test, fix and redesign new equipment to keep up with the demand and customer expectation. For example, Metso spends millions of Euros annually on R&D, and ultimately end users are the ones that benefit from the results,” he says.

“This is the main reason we tend to spend time with our customers who use generic/pirate parts and commit to analysis of the cost of OEM parts and their resulting performance, and compare these against the cost of downtime, machine failure and mediocre product performance, to showcase how beneficial OEM parts are in the overall operational costs against looking at the once-off cost for a part purchase,” concludes Scherf.

Munesu Shoko
Editor – Capital Equipment News

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