There are four areas to discuss concerning the repair of spare parts and equipment:
• The repair work process flow
• The salvage process
• Sourcing and selection of a repair center
• Purchasing equipment on the secondhand market
The repair work process flow:
Once you have determined that the component is in need of repair, it is sent to a selected supplier to evaluate whether it can be repaired, and to provide a quote to do the repair. The control of the part needing repaired and being sent to a supplier includes a red repair tag, which identifies the part number, the description, the purchase order number for the supplier to evaluate the component part or equipment, and the reason for the need of repair. Once the part is received by the supplier, and it is determined that the part can be repaired, a quote is prepared to evaluate by the customer. Once a go-ahead is received by the repair center, the tag is changed to yellow, meaning "in process," and the part is repaired. The part is returned back to the customer. The tag is then changed to green indicating the part meets all specifications of a new part. It is to be repaired to the same state of the Original Equipment Manufactured product, with the same expectations as a new part. There normally is no warranty attached to the repaired part, except test results indicating the part specifications. The part is then binned, and placed as a "First In, First Out" rotation, since repair parts are needed to be picked and used first.
The salvage process:
When the part is determined to be unusable from the evaluation by the repair, the next step is to determine the best means to salvage the part. There are three decisions-having the repair center scrap the part at their facility, having the repair center send the part back to you for you to scrap, or having the part sent back to your salvage facility to break down the components to bring the most dollars in scrap value back to the plant. Each time, the dollar value of the part must be evaluated in order to make that decision. High dollar parts, with precious metals, need to be brought back to the salvage center and broken down into components. Once the part is scrapped, the buyer goes into the market to purchase new equipment and/or components. Safety stock and defined min/max points help to reduce the pressure of expediting parts to replace the original parts.
Sourcing and selection of a repair center:
The criteria used to source and select a repair center is as follows:
• Referrals from the OEM manufacturer, based on experiences customers have had with the repair center
• Recommendations from competitors and/or customers who have fixed like pieces of equipment
• Industry reputation
• Least best sources: Web search, industry trade magazine, newspaper, etc.
The best method to source and select a supplier is a certification process:
• Current and potential repair centers go through an objective visitation at their site, evaluating each part of their process.
• The suppliers are ranked in each category. The main categories to be ranked are facilities, organization, work flow processes, inventory management, storeroom management, receiving and shipping, market pricing, quality of repair, service after the sale, and delivery meeting due dates.
• The supplier is placed in one of four categories-Certified (top supplier), Preferred (near the top supplier), Qualified (average supplier), and Non-Conforming (do not want to do business with that repair center).
The visitation at the facility of a potential service center holds a great deal of weight, and makes the decision-making much easier. It takes time and effort to locate the centers, but this approach makes the selection and sourcing much improved. Testing and instrumentation are also a part of the process, which means that the repaired equipment has to meet the strict guidelines of the OEM.
Purchasing on the secondhand market:
I avoid this as much as possible and exhaust my source and selection process before I go into this market. Even when a component or piece of equipment is advertised with a price attached to it that sounds good, there is no guarantee that this is not a come-on, and that it actually exists. I spent hours locating a secondhand market part in Kansas, and found it shipped from the East Coast. When received, the part did not meet my specifications. The secondhand market company would not take it back, but instead wanted to sell it at a discount, of course. My time would have been better spent doing the hard work as discussed above in sourcing and selection techniques. You never get time back, and the repair condition continues. Once you find the right repair center through visitation and research, the secondhand market goes away. Once in awhile you may find a part that meets your specifications and testing methods in an emergency, but unfortunately that is rare. I have not had the best experience at the secondhand market, have you?
Summary:
A repaired part or piece of equipment must equal or exceed the OEM specifications. Warranty costs are to be monitored so that no additional dollars for the repair are applied if it is under warranty. The repair work flow should be mapped and followed. A salvage program should be established to support the repair program. Repair centers should be ranked and evaluated prior to selecting them to quote jobs. The selection should be based on both objective and subjective criteria, and may be the result of the supplier's recommendation, industry reputation, and visitation at the facility. The secondhand market is available as a last resort. The repair process is a key work flow in the MRO process.