EDITOR’S CHOICE
OEM ENGINEERING COMPANY
SMARTWATER
A MODERN-DAY HORROR STORY
A gap has been identified in track and trace technology
In January 2017, a Director of an international
size OEM engineering company of specialist
fasteners, became embroiled in a dispute
with a major customer, who accused them of
selling shoddy products.
Apparently, one of their high specification
bolts had been installed into a large turbine,
which operated under extreme pressures. It
was fitted by the customer’s highly skilled
engineering team about six months earlier,
who claimed that they had bought the bolt
from an authorised Distributor of the OEM’s.
Upon inspection at the Customer’s site, the
OEM’s own engineers found that the bolt
displayed their Company’s logo and, to all
intent and purposes, it looked like a genuine
bolt. However, as it had been fitted months
previously, the Customer had thrown all the
packaging away that contained the ‘track and
trace’ production data.
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PECM Issue 41
The Customer warned the Director to expect
a claim for damages to the turbine and
consequential loss, amounting to many tens
of thousands of pounds.
As a result, the Director alerted their Insurer
of a potential claim and asked the Company’s
Metallurgists to conduct tests on the bolt
to confirm that it was a genuine bolt and, if
it was, to try and identify what caused the
problem, as there may be a potential recall of
flawed products needed.
The Insurer advised them that, whilst they
were committed to pay out on the claim for
damages up to the extent of the product
liability cover, they would only do so if it was
a genuine product.
The Director realised that he was between
‘a rock and a hard place’. His Metallurgists
could either determine that the bolt was
a counterfeit, negating the Company’s
insurance cover leaving it liable to pay
damages or find that it was a genuine but
flawed bolt, resulting in the horrors of a
product recall.
The Metallurgists reported that they believed
that it was a counterfeit, based upon the
poor quality of metal used. He advised the
Customer of the result and suggested that
they should take their claim up with the
Supplier of the counterfeit bolt.
The Customer responded that his
engineering team had already investigated,
with the Supplier claiming that they had
bought it from an authorised Distributor of
the OEM. As far as they were concerned, the
OEM was still responsible and they would not
only take the matter to Court but cease all
future business with the OEM.