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OEMs under threat

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World Coal,

Original equipment manufacturers (OEMs) are in danger of losing market share if their product quality, after sales services and inventories, is not enhanced. This evaluation from a recent Timetric survey comes as mining companies strengthen their bid to minimise costs.

The results of the survey covering 100 key decision-makers at operating mines throughout Europe and approaching the former Soviet Union (FSU) show a cost-conscious spending on equipment parts and after-sales service. OEMs are under threat of losing market share as those surveyed detailed their dissatisfaction on issues regarding after-sales services and the availability of parts.

The survey separated parts into strategic parts, non-strategic parts, and processing equipment parts. The results reveal the dominance OEMs have in the strategic parts and processing equipment segments, whilst independent third-party suppliers have significant shares of non-strategic parts. From the sample, 60% of mines solely use OEMs for strategic parts, with 66% just employing OEMs for processing equipment needs. For non-strategic parts, however, 27% of mines are using third-parties solely and 39% using a mix of OEMs and third-parties. The dominance of third-party suppliers in the non-strategic parts industry proves that mining companies are attempting to cut costs in the less critical areas, yet are less prepared to sacrifice quality for cost and primarily rely on OEMs for the more important parts.

Participants in the survey identified the key areas where they feel their OEMs need to improve. Among the leading factors were after-sales service and availability of spare parts, with these the two highest-rated factors in the FSU.

“Mining companies throughout Europe and the FSU rely mostly on OEMs for strategic parts. Where non-strategic parts are concerned, companies are increasingly looking to cut costs and purchase products from independent third-parties. Where issues regarding OEMs’ after-sales service and the availability of parts have been identified, there is a greater potential for OEMs to lose market share to third-parties,” says Nez Guevara, Senior Mining Analyst at Timetric’s Mining Intelligence Centre (MIC).

Adapted from press release by Joseph Green

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