As a major OEM supplier reached an end-of-life cycle point with over one million spark plugs labeled under an older brand for a major automaker, the parts were still viable; but the part numbers had to be switched to the next generation. The packaging experts at Fapco were called for this cumbersome re-packaging job.
“The major automaker has a program called a ‘mix with/sell as’,” explains Fapco’s Operations Manager, Scott Sloniker. “This means distributors market and sell part A until it changes to part B, then repackage and re-market the same part as part B. Basically this policy demands that you try and deplete all of part A first. This does not always work out the way it is projected. Projecting in this economy has been tough on OEMs. That’s where Fapco comes in to rescue the program and repackage the parts.”
Sloniker explains that Fapco helps the customer repackage the plugs with the new program’s packaging, “…to the tune of 1.3 to 1.4 million plugs over the course of about 13 part numbers,” he states.
Since the characteristics of the plugs have not changed, only the packaging and the fact they are now cross-platformed to new vehicles, the plugs must be removed from their existing containers, and repackaged under the new name.
“We took in all the stock on behalf of the major automaker, shucked it out of its existing packaging and repackaged it into the new brand. This is known as washing inventory. It is an extremely time-consuming, labor-intensive process that is best provided by an experienced contract packager like Fapco. Once they are repackaged we return them to the distribution network—for which we are completely programmed with our system for the OEM,” he states.
To get a feel for the scope of this project, imagine organizing your labor force to receive multiple truckloads of 13 SKUs of spark plugs on skids, break down the skids, empty out the boxes, open up each box to remove 104 sparkplugs per box, remove each plug from a box then reversing the process by repackaging each plug into the new box, then place 104 plugs into an overpack box, fill skids to the proper unit load level, then prepare skids of each SKU for truckload shipment.
“Washing inventory like this in-house is tough. Even for a major OEM. It’s bound to show up in their loss column. We’ve been doing business with the Big Three automakers for over 20 years and providing them with repackaging programs like this has become second nature for Fapco. Since these parts had already been produced and had to be paid for by the OEM- the only alternative to repackaging was to scrap all these great parts- and no one wants to do that. So repackaging was a winner for all parties involved, and we continue to provide these services at a great cost reduction when compared to the OEM doing this in-house,” concludes Sloniker.