Diesel Dialog: The Nature Of The Diesel Aftermarket Has Become Increasingly Competitive - Engine Builder Magazine
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Diesel Dialog: The Nature Of The Diesel Aftermarket Has Become Increasingly Competitive

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In recent years, the nature of the diesel aftermarket has become
increasingly competitive. Many of the bread-and-butter engines
that diesel shops have focused on have become so common that the
factory replacement parts and reman engines available leave little
profit to be made by the machine shop trying to stay competitive.

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One
important factor in this equation is the OEM’s strategic positioning
of their exchange programs – which have grown into a major source
of competition – for both our industry and their own dealers.
Let’s face it, when the customer swings one of these engines,
the machine shop and the local dealer or repair facility all lose
the labor business and the parts sale, too.

This is all fair and
well as long as we are playing on a level field that is being
judged by the same set of standards. But, some manufacturers have
clearly gone beyond good business and have breached their own
integrity in this effort to gain a competitive advantage in the
service and replacement parts field. I think it only fair to recognize
these inconsistencies and respond to them in professional ways
that strengthen the rebuilding industry. I’m not talking about
the "Boston Tea Party" here!

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For many of us, the OEM’s
rebuilding facilities are big accounts. But in many cases the
factory service centers are the one’s suffering from corporate
policy. When the engine is swung at the authorized service center,
all of its repair service providers are cut out of the picture.

More than one OE dealer representative has expressed concerns
about their own factory exchange programs making parts swappers
out of their experienced, factory trained technicians. Like any
other group, the OEs can only be judged in terms of their own
actions. In an effort to corner the service and aftermarket replacement
parts, these marketing strategies are affecting the rebuilding
industry and should be recognized.

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To name a few examples of the
types of tactics I’m referring to, you can start by opening a
service manual. When the listed spec for new block deck height
is .004" from the minimum acceptable deck height, or a head’s
"new minimum thickness" is equal to the "minimum
acceptable thickness," there is no room to resurface.

Not
that you can’t machine these parts and negatively impact the engine’s
runability. But does the OEM make any notification to the buyer
when it sells a factory exchange part with the factory warranty
even though the part may be machined beyond their owned published
tolerances? How about replacement bearings and pistons not offered
in reasonable undersizes or oversizes, rendering the component
useless after it’s first go around. Or what about a manufacturer
placing a "bounty" on cores in an attempt to control
the value of the reman component by being a major supplier.

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And
how about service manuals that contain steps in a repair which
are included to shield the manufacturer from liability, but in
effect create additional time and equipment costs to repair the
component "properly." Meanwhile, these practices are
not even being followed in the factory’s own rebuilding facility.
These wasted costs drive the price of rebuilding the component
up above the replacement price of the factory exchange part.

Some
OEMs will not endorse technically sound repairs, yet evidence
of the same repair is observed upon inspection of the factory
replacement part. The examples just seem to go on and on, all
pointing to the same result – to drive the costs of rebuilding
well above the replacement costs of a factory exchange unit, while
simultaneously maintaining the "security" in the customer’s
mind that they are receiving the "quality" represented
by the factory name.

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Far too few end-users are putting two and
two together and seeing what is really going on. In some cases
rebuilders play into this trap, hack away at price and leave quality,
warranty coverage and profits behind. By doing this we compete
against ourselves, guiding our businesses towards lost revenues,
rather than focusing as an industry on the real issues.

So what
can we do and how can we combat these tactics? First, we can develop
and collectively recognize industry standards that are based in
sound metallurgical facts. Acting in technically professional
ways, we can educate our customers as to which repairs are durable
and reliable, saving them down-time and money while at the same
time supporting labor and sales for the local shops involved in
the rebuilding industry. We also can continue to innovate and
create sound repairs that work for the materials and the application
at hand, being confident that we are providing our customers with
quality products. The customer should make the choice about a
repair option based on all the information. They should be accurately
advised about the repair and its chances for success.

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It is important
that as a group we only recognize quality repairs. As these repairs
are devised and proven to work, individually we need to be active
in and consult with our national trade groups such as the Automotive
Engine Rebuilders Association (AERA), Production Engine Remanufacturers
Association (PERA), or standards boards such as the National Institute
of Automotive Service Excellence (ASE), American Society of Testing
and Materials (ASTM), or ISO, and share the lessons we learn to
improve our products.

I know there are those who’ll take issue
with my views, but as an industry participant I have to ask myself,
"What can I do to improve our industry’s image?" When
I read trade journals, I’m looking for insights into our industry
and it’s related markets. From this standpoint, I think it reasonable
to examine these issues in an informed and active way, with the
end goal of answering the question, "How can we make our
businesses and our industry better?"

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