Regardless of what manufacturing industry you
look at, OEM to MRO conversion represents a significant cost savings
opportunity for any organization. To their own benefit, Original Equipment
Manufacturers heavily promote their parts for ongoing equipment maintenance and
repairs. You can’t blame them; it’s excellent revenue sustainability. The
problem is that the price variance between an OEM and a standard MRO item is
often astronomical.
Although it may seem like an easy task to
convert all OEM items to standard MRO parts, it most definitely is not. The
challenge is to identify equivalent MRO interchange items that can be sourced
elsewhere to safely replace these costly OEM items. While most MRO
manufacturers are quite generous when providing part specifications, OEM’s usually
are not. If you’re lucky, you may be able to retrieve a limited amount of information
online or by contacting the OEM directly, but there’s a very good chance you’ll
come up empty handed. In most cases, obtaining OEM attribute information
requires an on-site subject matter expert to physically inspect OEM parts and
collect information such as type, size, material and description.
It is a time-consuming and laborious task
that manufacturing organizations rarely leverage to the full potential, however,
the return on investment opportunity is tremendous. For example, in a given
manufacturing organization OEM items represent on average 40% of total
inventory. To further illustrate the savings potential, the purchase price
reduction opportunity on OEM to MRO interchange items can range from 25-75%, if
not greater. You don’t have to be a mathematician to realize that’s a lot of
money that could be kept in pocket.
For more information on OEM to MRO Conversion
and IMA services, visit www.imaltd.com or
contact info@imaltd.com.
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