AAR Expands OEM Parts Business
AAR is expanding its electrical piece parts business as part of its OEM Solutions group, which distributes commercial and defense OEM parts. Its initial contract was with Leach International in September 2019 to stock, promote and sell electromechanical and solid-state switch gears.
OEM Solutions has primarily been a distribution business, but it’s adding front-end services to help OEMs navigate supply chain issues that are hampering the industry. By helping OEMs support their supply chains, it ultimately helps AAR on the backside if it’s distributing for those OEMs. “It’s full-circle OEM support that we’re trying to go after,” says Darren Spiegel, VP of OEM development, GM of electronics.
AAR rationalized this parts business six years ago from a catalog approach to one focused on engineered parts that include intellectual property. “We like to focus on things that have a competitive nature…but are not commoditized,” says Spiegel.
Because of this, the company doesn’t aspire to become a large OEM parts catalog. “We’ve seen a lot of OEMs that are sick of having their parts thrown into a bucket of all kinds of things and not have focus in the market. Then they lose touch with the market,” sometimes even losing track of where their parts go over the years, says Spiegel.
To combat this, he says AAR leverages its global salesforce, who have strong relationships with engineering and procurement professionals to get real-world market data that OEM Solutions uses to figure out where the parts go and to map out the market size and identify the gap that the OEM is missing.
Its OEM Solutions portfolio includes engines parts—from ignition systems to fuel pumps—to airframe components such as de-icing systems and wheels and brakes. It doesn’t distribute competing parts so it doesn’t have “share the shelf conflicts,” says Spiegel. “We pick a horse and go really deep with (the OEM),” he adds. “When we pick an OEM, we work for that OEM. We don’t work for the competitor, as well.”
That exclusive relationship holds true for military contracts, too. AAR uses its proprietary system of scraping government solicitations to speed review and bid times. “We’ve gotten 30-day quote times down to three days,” which helps its OEM customers submit bids faster, says Spiegel.
In addition to distributing new OEM parts for more than 50 product lines, AAR also sells used parts and leases inventory, as well.