An MRO spend report can clearly show a reduction in cost per component. But far bigger money is involved with “lowest-cost” sourcing decisions, money that is decidedly on the negative side of the ledger. As an operations manager or plant engineer, you see it in shorter component Mean Time Between Failure, reduced equipment reliability and a loss of access to the expert engineering services of quality brand component manufacturers.

By Bill Moore, SKF

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When your company’s purchasing department saves X percent on component costs by sourcing from third-tier suppliers or opting for lower quality parts, some positive results are readily visible. An MRO spend report can clearly show a reduction in cost per component.

But far bigger money is involved with “lowest-cost” sourcing decisions, money that is decidedly on the negative side of the ledger. As an operations manager or plant engineer, you see it in shorter component Mean Time Between Failure, reduced equipment reliability and a loss of access to the expert engineering services of quality brand component manufacturers.

Perhaps nowhere does this have greater impact than in the chemical, paper, food, mining and steel industries, where unplanned equipment downtime is valued at tens of thousands of dollars per hour. Here, quality components supplied by high-value, often “authorized,” distributors can help keep equipment functioning longer, with greater precision and more reliably than bargain parts. In the area of  rotating equipment technology, bearings, seals, lubricants and shafts are key components.

Third-tier venues include Internet outlets and catalog houses. Because they base their appeal almost solely on low price and offer no additional value, they frequently undercut traditional vendors or manufacturers. Often, they vanish from the supplier landscape after a short run of successful operation, leaving the end-users who sourced from them with a temporary loss of supply.

Authorized distributors of rotating equipment components and the technology that keeps them running efficiently are stable businesses that offer essential services in addition to quality, fair-priced product. They typically enjoy a close business relationship with their component manufacturer-suppliers. To be “authorized,” the distributor will have undergone training and passed a series of evaluations spanning several months that demonstrate its ability to provide high-grade logistics and basic technical services. In return, they rate priority sourcing for the manufacturer’s product line and have preferred access to its engineering resources.

Distributor benefits

As an end-user who sources through authorized distributors, you can benefit in a variety of ways.

• Confidence that the products you source will be quality, branded components, and not returned, obsolete or even counterfeit goods.
• Expert logistics services that may include the stocking of critical extra parts in proximity to your plant locations.
• Monitoring of your product usage and automatic replenishment.
• Possible warehousing and shipping discounts.
• On-site visits to your plants that help facilitate smoother supply and equipment operation: The technical training that an authorized distributor’s representatives receive from the manufacturer-suppler, for example, may equip them to spot and rectify certain equipment problems. Most trained distributor agents have basic condition monitoring skills.

Expert Engineering Services

Among the most important services an authorized distributor can bring to its end-user customers is the expert engineering assistance available from its manufacturer-supplier. In the field of rotating equipment technology, this includes Root Cause Failure Analysis (RCFA), a process usually conducted under laboratory conditions to identify the reasons behind an equipment malfunction and then rectify it. In cases where equipment is experience recurring failure, an RCFA can be a critical maintenance asset.

A recent paper mill example concerns excessive vibration in a machine’s dryer section. A Root Cause Failure Analysis conducted by a top-tier bearing manufacturer determined that worn and improperly located rockers were at the vibration’s source. The short term solution was to replace and properly install the rockers. The long term solution will be to replace existing spherical roller bearings, which did not adequately accommodate expansion, with a torodial bearing arrangement, which both eliminates the rockers and accommodates expansion.

Such solutions help facilitate greater plant productivity. They keep the machines that manufacture the very goods necessary to keep your business profitable operating reliably. A manufacturer’s expert engineering services, however, are available only to businesses that source their branded products. Businesses that source off-track brands, usually from third-tier suppliers, are left to their own devices to solve equipment problems. In an era where internal engineering resources continue to evaporate due to early retirements, forced layoffs and other downsizing practices, access to outside assistance takes on ever greater importance.

A word to your colleagues in the purchasing department may help ensure the continued supply of quality components, backed by advanced engineering services. Be sure to mention that engineering services from component manufacturers are often provided free of charge. Fair-priced quality components sourced through a stable, proven supply chain have their payback in plant productivity, a dividend that cheaper product and third-tier venues simply cannot match.

Bill Moore is senior VP of channel management for the SKF Service Division. He can be reached

William.C.Moore(at)skf.com.