The Tier One supplier consolidation process of spare parts can seem daunting for OEMs at first glance. That’s why we began a three-part series of articles entitled “Three Steps to Begin the Tier One Supplier Consolidation Process.” The first article answered the burning question facing many OEMs: “How do I start the Tier One supplier consolidation process?” Part two of this series discusses the next stage: “What are the immediate benefits that OEMs realize once they start the Tier One supplier consolidation process?”
1. Reclaim Space
Having Fapco house all of your parts, such as small parts kitting, will open up space in your warehouse or on the factory floor as you transition your parts inventory over. This freed up space can then be used for increased production capacities or other purposes to help generate more income for your company. This additional space could also be sold or leased to reduce overhead costs or generate additional revenue.
2. Stop Worrying About Inventory
You’ll no longer need to have employees spend time on spare parts inventory, packaging, warehousing, product staging, or freight consolidation. With Fapco providing vendor inventory management, inventory overhead cost and volume issues will be a thing of the past. Whether your company has 30 SKU’s or 3,000 SKU’s, Fapco can provide a customized solution to manage your inventory needs and take away your inventory control management headaches.
3. Save on Labor Costs
Fapco handling your inventory, complex part kitting, and parts supply management and fulfillment will reduce staffing in your packaging, shipping, or warehousing departments. Other areas where staff costs could be lowered include purchasing, receiving and accounting. This staff can be reallocated to other departments within your organization to help improve your bottom line or make your company more productive and profitable.
4. Lower Transportation Costs
Transporting parts to and from a single location like Fapco is much more cost efficient than transporting freight to and from multiple locations. Managing rising freight cost is often overlooked but can have a significant impact on your profitability. Having a larger volume of inventory shipped to and from Fapco provides an opportunity for lower per unit freight costs on parts. To put it simply, we help you save money.
5. Improve Quality Control
By using a Tier One Parts Supplier like Fapco, OEMs can improve on parts quality. Fapco’s in-house parts inspection team can improve quality assurance for clients with even the toughest of expectations. Our critical OEM parts replacement and inspection process reduces the cost of receiving, inspection and inventory of bad parts for the OEM. And because we are acting as the Tier One Supplier in the process, Fapco has ownership of the parts, giving us a high stake in making sure the parts are right.
“Our Tier One Parts Consolidation program takes a lot of the burden and overhead off the customer. We really free up the customer to do what they do best. We do all of the work of purchasing, receiving, processing, and product distribution,” said Fapco’s General Manager Scott Sloniker.
The packaging experts at Fapco can help you with nearly any packaging needs, providing top-quality contract packaging, trapped blister packaging, along with many other types of packaging. Get Started with Fapco Inc. today!