“Penny wise and pound foolish” is how Metric Automotive Engineering operations director Andrew Yorke describes the tendency for many equipment owners to try to cut corners when getting engines remanufactured.
“There is often a perception that quality engineering in the remanufacturing business is expensive, but we have proved time and time again that this is not the case,” says Yorke. “When one looks at the cost of an engine overhaul or remanufacture, only around 20% of the cost can be attributed to the engineering portion of the total job; the balance is generally associated with replacement parts.”
In addition, he says, there is generally only a marginal cost difference – perhaps a 20% variance – between a quality diesel engine component remanufacturing operator and what he refers to as a “backyard” operation.
“This means that the additional cost of the engine overhaul will only be about 4% – that is, 20% extra on the engineering portion of 20% of the total job,” he says. “It doesn’t really make sense for companies to base their buying decisions on this negligible percentage, when there is such a significant quality difference. The risk of premature failure due to poor workmanship should surely be a much greater concern.”
He says this begs the question of whether it is really worth taking the chance with a service provider that cannot offer the highest possible level of quality.
For the end user, the price of engine failure in the field is exorbitant; apart from the cost of getting mechanics to site and keeping them there until the repair is complete, there could be substantial contract penalties incurred due to downtime. The breakdown is also sure to disrupt other aspects of the project work plan.
In addition, site repairs are never a good idea as the right tooling might not always be available, and contamination from an uncontrolled environment is always a high risk. An even worse case scenario is that the entire piece of plant may need to be pulled out of operation and taken back to the workshop, incurring even higher costs and project disruption.
Yorke says that quality engineering also makes sense for OEMs, who are carrying the warranty for the item over the agreed contract period.
“It is the cost of original parts that escalates the cost of an engine rebuild,” he says. “So we believe that there is a need for engine OEMs to start looking at these cost ratios, rather than sacrificing a quality repair just to keep the profit on the parts.”
It is vital, therefore, that users and OEMs understand how the cost of engineering fits into the overall cost of remanufacturing engine components and engines, as the potential risks of poor engineering undermines a sustainable business model. On the other hand, ensuring the right quality is actually not an expensive option in the short-term or the long term.
“This message is important because we at Metric Automotive Engineering have seen numerous examples where companies considered the cost of quality engineering too expensive – but by cutting corners, they ended up paying far more for this error in judgement,” says Yorke.