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Friday, July 16, 2010

Interchange: The Recycler Language We're Speaking

Like a lot of columns, this one started with a question: is there a better way for auto recyclers to inventory parts? Can we tie our system more closely to OEM numbers? And like the best questions, the answer surprised me. I’m sure there is room for improvement, but, especially compared to some international markets, we have it pretty good.

The numbering system for the auto recycling industry is derived from the original equipment manufacturer (OEM) number. It’s the basis for what is universally known as “Interchange.” While we do not speak the same numerical language as collision repairers, all stake holders in our collective industry are fortunate to have a common platform by which we can all operate.

This common platform is written and owned by Hollander, a Solera company out of Plymouth, Minnesota. The Hollander Interchange allows all auto recyclers to inventory and categorize assemblies rather than all of the components that make up an assembly. For example, auto recyclers inventory and stock a vehicle’s door as an “assembly” in that the door’s internal hardware, moulding, handle and window are part in parcel of what the customer can expect to receive. In the manufacturer’s concept, there is no OEM number for a door; there’s one for a door shell.

Part of the value in recycled parts for the collision repair industry is the opportunity to receive an original manufacture’s part like a door fully intact, thereby reducing the labour they’d expend if the door had been a bare shell. Ultimately, it reduces the cycle time of the vehicle being repaired.

As Hollander senior product manager Avi Pelc put it, the real question is “how do we give the collision repairer confidence that the part is accurate and that it is the correct used part for their vehicle?” This is the very nature of what Hollander does and they have teams of representatives who are trained to use various systems to outline this for all stake holders in our industry. As Avi explained to me, it all boils down to the premise of the Interchange itself: “fit and function.” Hollander is the creator and makes the decisions using that credo. When there are slight variations to the interchangeability of parts, Hollander provides the options for its users.

In simple terms, the benefits of Interchange are that it allows auto recyclers to search for and find parts from manufacturers that share parts components, such as Chrysler and Mitsubishi etc. When part requests are logged into various inventory management systems available to auto recyclers the Hollander Interchange is the foundation for each and every part look up. Essentially, it increases the likelihood of finding that part in the recyclers database.

Without this common platform available to recyclers the net result would be very chaotic and confusing due to the varying natures in which we operate. Recyclers have to find a middle point and not limit ourselves to the opportunities to provide collision repair centres with the parts they want and need. We may not have the part from the exact model, and the appropriate part we have available may not even come from the same type of vehicle, but that doesn’t mean the part we have isn’t applicable to the repair.

The Hollander Interchange, also known as the “Bible” for the auto recycling industry, is the reason that we are able to effectively cross reference these parts and provide them as an option in the repair process. Not long ago, auto recyclers had two forms of interchange for our industry, and this only fractured and shrunk the marketplace for parts; there were too many barriers and obstacles for us to trade parts among ourselves.

I think it is fair to say that there still needs to be improvements to the existing situation. A better exchange of information is attainable, which will aids in strengthening all stake holders in our industry.

Having said that, the common platform by which we operate today allows us to trade many tens of thousands of parts daily in an almost seamless fashion. This in itself would otherwise not be possible without Interchange. This is all because of the great work that is done behind the scenes at Hollander and a big thank you is deserved for their efforts and positive contribution to our industry. 

by David Gold, Standard Auto Wreckers, Scarborough Ontario
This story originally ran in Collision Repair magazine issue 9#3.

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