Understanding the Difference: A Q&A with Howard Truitt
Today’s foodservice operator continues to look for ways to get the most from their foodservice equipment. Part of that includes proper repair and maintenance, which often requires operators to purchase replacement parts. Understanding the terminology can be incredibly helpful when trying to navigate the parts landscape.
In this Q&A article, Howard Truitt, vice president of key accounts for Popular Restaurant Parts, based in Casper, Wyo., helps distinguish between genuine and non-genuine parts and more.
FE&S: Why do you believe little difference exists between genuine and non-genuine original equipment manufacturer (OEM) parts?
HT: The majority of parts used in commercial foodservice equipment are manufactured by component manufacturers and sold to the equipment manufacturers. By definition, in our industry, OEM part means the part is sold through the equipment manufacturer’s distribution channel. Parts not sold through the equipment manufacturer’s distribution system are referred to by the equipment manufacturers as non-OEM parts.
Why? Economics, the highest margin business for an OEM is their replacement parts business, where margins range from 60 percent to 100 percent and typically account for 10 percent of a manufacturer’s total sales. Equipment makers use independent companies to design and, in most cases, select an existing part to use in their equipment.
The truth is a designed custom part simply costs too much and drives the cost of equipment. Replacement parts, in a vast majority of the time, are equal to a genuine OEM part.
FE&S: What’s the simplest way to understand OEM vs. non-OEM?
HT: OEM parts are installed on equipment at the time of production and replacement is sold through the equipment manufacturer’s distribution system. Terminology clouds the definition between OEM and non-OEM.
Reputable aftermarket part companies analyze why specific genuine OEM parts tend to fail, and then improve on the original design or improve the part’s materials.
Parts not sold through the equipment manufacturer’s distribution channel are referred to as OCM (Original Component Manufacturer) or Direct Source Parts, but remember they are the exact part used by the original equipment manufacturer. These are the most inexpensive type of parts you can purchase, mainly because you are not paying for the margins and logo. The only time to use an OEM part is if it’s still under warranty and you don’t have to pay for it.
The other type of part that is a non-OEM is a “generic.” Generics are not Original Component Manufacturer-type parts, but rather a replacement part termed generic. Same fit, same function but completely unrelated to OEM and OCM type parts.
Generics are sourced to meet a demand when sales demand increases for a particular item. Unfortunately, our industry feels generic is the worst type of parts. So, the generic term has a taboo associated with it. A lot of vendors call them replacement parts instead.
FE&S: How does cost weight in?
HT: OEM parts will cost more than non-OEM or aftermarket parts. More often than not, someone pays extra money for a genuine OEM part, hoping that it is vastly better than the non- OEM or aftermarket part. But that is seldom the case and instead that person is just paying extra for the OEM name and margins tied to the OEM part.