The Hollander Interchange system is a decades-old standard used by auto recyclers to identify and catalog parts for vehicles. It assigns a unique identification number, known as the Hollander number, to every part, which helps recyclers and auto repair shops quickly identify interchangeable parts across different vehicle makes, models, and years.
How It Works:
- Parts Identification: Each part in a vehicle, such as a fender, engine, or transmission, is assigned a Hollander number. This number is essentially a catalog entry for that part, regardless of the specific vehicle it originally came from. It tells recyclers which vehicles’ parts are compatible with others.
- Interchangeability: The key feature of the Hollander system is its ability to indicate which parts can be swapped between different vehicles. For example, if an engine from a 2015 Toyota Camry has a particular Hollander number, it can be cross-referenced with the system to find out which other vehicles that engine fits, potentially across different makes or years.
The Challenge:
The Hollander system is largely independent of OEM (Original Equipment Manufacturer) part numbers. This is where the problem lies for auto recyclers like Scott Robertson Jr. OEM manufacturers assign unique part numbers to their components, but those part numbers often change over time, and OEMs don’t readily share their part numbers or part compatibility data with recyclers. As a result:
- Lack of Communication: The parts listed under Hollander numbers don’t always match the OEM’s part number for the same component, even if they are functionally identical.
- Compatibility Issues: Since OEMs don’t allow the use of recycled or aftermarket parts (unless they’re sold through their official channels), it becomes difficult for recyclers to prove to repair shops or insurers that a used part is equivalent to a new OEM part. This limits the potential market for recycled auto parts.
- Data Fragmentation: Hollander’s system is not updated as quickly or as extensively as OEM systems, which means it’s not fully aligned with the data used by the broader automotive industry (e.g., repair shops, insurance companies, and manufacturers).
Opportunity for AI Integration:
By using artificial intelligence (AI) to bridge the gap between Hollander numbers and OEM part numbers, the auto recycling industry could unlock significant value:
- Automating Cross-Referencing: AI could be used to cross-reference parts from the Hollander system with OEM data. An AI-powered system could automatically find the corresponding OEM part numbers, identify which parts are interchangeable, and map this data in real-time. This could help recyclers integrate their inventory with the larger market of repair shops and insurers who rely on OEM part numbers.
- Seamless Integration with OEM Data: An AI tool could also help track and integrate updates to OEM part numbers, ensuring that recyclers always have the most up-to-date compatibility information.
- Improved Market Access: With a more direct connection to OEM part numbers, recyclers could potentially gain access to a much larger market of repair shops, insurers, and even consumers who may be more willing to use recycled parts.
- Carbon Neutrality Benefits: Since using recycled auto parts can reduce emissions and energy consumption compared to manufacturing new parts, connecting recyclers to insurers and repair shops could help the industry contribute more effectively to carbon neutrality goals. Many insurers are already looking for cost-effective ways to meet these sustainability targets by using recycled parts, making the ability to prove part compatibility essential.
Potential Impact:
- Improved Sales: More accurate part identification could open up a new revenue stream for recyclers by making it easier for them to sell parts to a broader range of repair shops and insurers.
- Cost-Effective Repairs: If AI bridges the gap between recycled and OEM parts, repair shops could reduce their costs by using recycled components, passing savings on to consumers while maintaining the same quality standards.
- Reduced Waste: Linking recyclers to a broader market of parts buyers could help reduce the waste generated from cars, as more parts are reused rather than sent to the shredder.
The insurance companies would love it because they want to use recycled parts (it’s cheaper, but also they are trying to reach some carbon neutrality).
Competition
Hollander, CarPart, and another company working with eBay run their own interchanges.
Conclusion:
An AI-driven system to link the Hollander interchange with OEM part numbers could significantly transform the auto recycling industry by creating more seamless integration between recyclers and the broader automotive supply chain. This would not only improve recyclers’ ability to sell parts but also contribute to more sustainable vehicle repair practices, increasing the utilization of recycled auto parts. For Scott Robertson’s business, such a system could be a game changer, expanding market opportunities and enabling recyclers to extract greater value from each vehicle.
Thank you ChatGPT for summarizing this.