Process and Operations

MRO Q&A: Should I Use Non-OEM Suppliers?

MRO Q&A is a Food Processing series addressing maintenance, repair and operational issues in food plants.

Q: I am getting pressure from my boss to use secondary sources as parts suppliers rather than the original equipment manufacturer’s parts. Can you give me some direction from your experience?

A:You need to look at this issue from the standpoint of risk and reward. There are the easy parts decisions; the O-rings, fasteners, sprockets, belts and connectors that are industry standards, but because of the part numbers, may appear to be unique. There are major suppliers that provide very high quality parts in each of these areas. This is low risk, high reward. Your MRO buyer can flesh them out, and it normally makes sense to buy from a secondary supplier.

On the other end of the spectrum is “insurance parts,” ones that are infrequently used, typically expensive but, if not available, will have a major impact on production. These parts are expensive because there is something unique about the design, their manufacturing process or the material used. Using a secondary supplier for these types of parts is not advised. This is high risk and low reward. You may want to consider having your OEM stock these parts for you to keep your inventory costs down.

The more difficult decision involves parts with higher use and less impact to the operation but ones that could be procured at a lower cost. Your OEM must provide value you cannot get somewhere else. There is no “easy button” solution for these types of parts. If you have a reliable local vendor that can produce these parts with great quality, service and price, it may make sense to use him instead of the OEM. The risk here is medium and the reward may be medium as well. You must communicate to them what the consequences are if one of their parts fails in service. If the savings you think you may gained over the long term justifies some minor failures, go for it. In either case, this decision should be made in concert with the production stakeholders.