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The Life Cycle of Used Auto Parts and Wrecked Vehicles


By Ben Silver - May 20, 2015

I am often asked questions about my business when people find out what I do for a living.  Most people don’t have a lot of interactions with owners or employees of salvage yards.  I thought I’d take a few paragraphs to take any interested party through the process that our parts go through before they end up at a dealership, body shop, or neighborhood garage. 
 
Today’s sales world is highly customer driven, competition has created shorter windows of time, lower prices, and hopefully better products.  Consumers expect to be able to get a product immediately, especially if it is in stock.  But with used auto parts, there is a “reverse manufacturing“ process that has to take place before a part is ready for the consumer to put it to use.  Automotive salvage yards are not like Wal-Mart or an electronics store, which uses a “Built to Stock” production model.  This model allows the manufacturer to produce the product before the end customer is identified and stock X units that are ready to sell.  Do to warehousing and human resource limitations; salvage yards must use a “Built to Order” production model.  This model allows for the production of the product after it has been ordered.  There are simply too many parts on every vehicle that may or may not sell to have them all removed, cleaned, and stocked for sale.  The cost of a process like this would bankrupt any salvage yard that attempted it within months.  This is the reality of dismantling wrecked vehicles and selling used auto parts, sometimes it’s not easy to communicate this process to the retail public but maybe this blog will help.
 
Procurement
So you’ve been in an accident, the insurance company has cut you a check or you have sold your vehicle to a salvage yard.  Hopefully, you did some research and got the vehicle to a reputable recycler who will recycle and dispose of it properly.  This is the first step in the process, we have to get our “raw inventory” from somewhere before we can begin our “reverse manufacturing” process.  I am using “reverse manufacturing” because our process is one of disassembly and removal as opposed to traditional manufacturing that is based on assembly of a product.  The procurement process is of paramount importance to automotive recyclers.  Do it poorly, and you will suffer.  Do it well, and you will thrive.  We have a dedicated employee to this specific component of the process and we use the most cutting edge software available to aid him. 
 
Inventory
Now that the “raw inventory” has been acquired and is at our facility, we need to physically inventory the vehicle and it’s parts.  We’ll actually assess the damage to every part that we put in stock and assign a grade to many of them to help our salespeople understand the condition of the part.  We inventory fewer parts than most people would think.  This is based on the value of the parts and our historical sales data.  We use a hand held computer to electronically enter the parts with descriptions into our yard management system.  This allows our sales people to easily look up parts when they’re requested and access all the information about the vehicles and their parts.  Once the parts are in our inventory, they’re broadcasted real time over the internet to hundreds of other salvage yards, shops, and even to the retail public on various websites.
 
Dismantling
This is the heart of our “reverse manufacturing” process.  We start by testing any of the products that we’re able to, emphasizing the more valuable components like the engine and transmission.  Next we’ll systematically remove of all the fluids, gases, oils, etc., in the most environmentally sound way possible.  Finally, we’ll actually remove the engine, transmission, and core parts.  The engine and transmission will be stocked in our warehouse so they can be delivered to our customers the day after they are ordered.  The removal of the engine and transmission is key to removal of most other parts on the vehicle.  Once they are removed, it is much easier to remove most of other parts from the vehicle.  Upon completion of the dismantling process, our lead dismantler will inspect the vehicles and verify that proper procedure has been applied and the vehicle is placed in a row in our yard.
 
Sales
After the dismantling process takes place, parts will begin to sell off the vehicles at a rather quick pace.  We’re primarily a wholesale provider of used auto parts, so we take hundreds of calls a day from body shops, insurance companies, independent repair shops, and dealerships, and process there orders as quickly as possible.  This is where the “Build to Order” process begins, as sales receive the orders, they will need to be filled by the next department.  The parts are not 100% ready to be sold at the time we receive the order, the order just drives the rest of the “reverse manufacturing” process.  Through our yard management system, we create electronic work orders that prompt our production staff to pull the specific part that has been ordered. 
 
Parts Removal
Our parts pullers will now create a report from the work orders that will route them in the removal of all the correct parts.  This is one of the final steps in the “reverse manufacturing” process, as the part that has been ordered will be removed from the vehicle or picked from the warehouse.  The parts puller is responsible for doing basic quality control, pulling the correct part, marking, and tagging the part with the routing information.  He’ll then place the part in our quality control department for cleaning, quality control, and routing.
 
Quality Control
This final and vital step in the process is one that separates some salvage yards from others.  It is important to look for any minor defects or problems before the part is delivered or picked up.  We also believe that parts should be cleaned and ready for the repairer to put right on the vehicle if possible.  All of our mechanical parts (engines, transmissions, rear axles, etc), suspension, and most any part under the hood are going to be pressure washed to remove oil, dirt, and grime.  Suspension will be painted for presentation and as a rust barrier.  Engines and transmissions undergo a more thorough preparation process to ensure quality presentation and an install ready product.  Lights and sheet metal products are cleaned and buffed for close inspection and presentation.  Our quality control department is critical in providing a final filter for defects or problems as well as making our product stand out.
 
Delivery, Shipping, or Pick Up
You can see now how the product has been “Built to Order”.   It is ready to be used by one of our valuable customers.  We will deliver many of parts to customers within our delivery zone and we freight or ship a fair percentage of our products out as well.  We don’t do residential delivery and some shops opt to pick up there parts in store.  We try to accommodate the needs of our customers as much as possible, and provide the product as quickly as we can.
 
Vehicle Scrapping
After a vehicle has spent a “cycle” at our yard, it’s time to put new inventory that was recently procured in its place.  In order to make room, we must “scrap” the vehicle and send it to be shredded and recycled.  We will remove a final round of core products from the vehicle and move it into a large container to be hauled off to the recycler.  At the recycler, they will shred the remaining shell of the vehicle and separate the metals from everything else to be smelted and reused.  This is the absolute final element of recycling the vehicle as it is returned to the raw material state from which it was originally built.
 
There it is, start to finish.  That’s what happens to vehicles and parts that are processed by automotive recyclers.  This outline is based on our company and our procedures and they may not reflect how some salvage yards process vehicles.  We have found this method to be environmentally friendly, efficient, and effective at providing quality used auto parts. 
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