Major OEMs Partner with Fapco on Tier One Parts Purchasing Programs
Fapco is not only a Tier One parts supplier — they can also help all types and sizes of businesses with their entire parts fulfillment program.
Taking the complexity and cost out of spare parts management is at the core of Fapco’s successful Tier One Parts Purchasing Program. “When we purchase parts, receive them in-house and convert parts and products, we essentially become part of the manufacturing process supply chain,” states JoAnn Pressey, Materials Manager for Fapco. “We don’t actually make the component parts. We just purchase the inventory on behalf of the OEM and provide it when they need it.”
Whether it’s assembly, packaging, small part kitting, warehousing or shipping to the distribution chain — passing parts management cost savings onto OEMs has become a significant part of Fapco’s business growth.
Pressey explains that this growing business segment makes us a value added contract packaging firm, and a Tier One parts supplier to the OEM.
“When it comes to our major automakers and our niche OEMs, they now consider us a Tier One parts supplier because they simply acquire the parts from us. We are purchasing the parts from the tier two suppliers. We believe this customer/service business relationship to be the wave of the future in value added contract packaging, ” says Pressey.
Top Five Best Practice Scenarios for Fapco’s Parts Purchasing Program
1. Limited Warehouse Space
“It is incredibly valuable to partner with an integrated parts flow management supplier who has strategic warehousing services to meet the demands of today’s tight deadlines,” said President and Founder of Fapco, Inc., Larry Gardiner. “At Fapco, we offer completely customizable, one-stop warehousing services to OEM and Tier One suppliers in a wide array of markets. These services are far more affordable and require less labor for an OEM than staffing, equipping and maintaining their own stand-alone internal facility,” said Gardiner.
Parts purchasing is a perfect scenario for many of our clients that lack warehousing space. We can secure the parts and keep them out of the weather in one of its centrally located warehouse facilities. The OEM can then “lean-up” its manufacturing, shipping and receiving space to maximize operations. Parts are then shipped to the supply chain JIT from our facility.
2. Too Many Parts Suppliers in the Mix
Our Tier One Parts Purchasing Program can relieve headaches in receiving, inspection, shipping and accounting by consolidating parts from various sources to one location. Each OEM is assigned a dedicated Fapco Manager to their account. One major industrial compressor OEM has consolidated parts from 245 suppliers into one convenient distribution center at Fapco. This means one contact at Fapco for all parts suppliers, questions and challenges.
“We have the capability of taking customer’s orders through e-mail, fax or integrated online services,” said Fapco’s Materials Manager Troy Taylor. “Every part in our warehouse is stored within our systems in such a way that we can pull parts and fulfill them on an as needed basis. Fapco can pull and ship parts with any shipping supplier a customer prefers, whether it’s FedEx, UPS or airfreight, to meet the tight deadlines of distribution centers or dealerships anywhere in the world. Shipping directly from Fapco eliminates one leg of the freight process and saves our clients money.”
3. Focus On More Key Competencies in Manufacturing
Our Program can also eliminate the need for packaging equipment and all its associated costs. From equipment capital expenditures, to maintenance, to labor and facility overhead, the cost of our customer in-house packaging when partnering with Fapco can result in significant savings. In addition to cost reduction, many OEMs have improved their lean manufacturing processes and improved product quality by increasing their focus on what they do best.
“There’s not a state we don’t ship to,” continued Taylor. “Under the OEM’s instruction, we also load and ship ground, air or various carriers to meet presubscribed cost parameters. Overnight (OVN) parts are also shipped by the customer’s designated carrier overnight for delivery the next day. All of this expertise in shipping and transportation leads to cost savings for our clients. The more legs of the distribution network that we can eliminate for our customers, the less money they will spend unnecessarily.”
4. Better Expediting Emergency Orders
Completely versatile to its customer’s needs, Fapco also does emergency or backorder items. Hot orders that come into the facility are packaged in an expedited fashion and shipped — many times within 24 hours. For one large automaker, Fapco ships Emergency Back Orders (EBOs) for repairs directly to dealerships within one day.
Whatever the emergency, be it a “machine down” in the field or a missed JIT shipment that threatens to shut down an assembly line, having a full range of repair and production parts ready to ship at Fapco provides a simple solution. By direct shipment to a dealership and bypassing the distribution center, or using overnight air freight to expedite a pallet for the assembly line, partnering with Fapco provides OEMs a competitive edge.
Fapco also ships less than truckload (LTL) shipments from its warehouse facilities to regional distribution facilities located nationwide. “We’ve designed our warehousing facilities so that there is no size limit to the part kitting we can handle,” said Taylor.
5. Value Added Packaging Engineering
With the Fapco Parts Purchasing Program in place OEMs benefit from experienced professionals ready to engineer and provide packaging solutions at the lowest price based on high volume purchasing.
Wrap It Up
Customer Service Manager, Jim Page, is a 19-year veteran at Fapco with 30 plus years in the packaging business. Page heads up the Fapco Tier One Parts Customer Care Program for Fapco’s largest OEMs.
“From the major automakers we serve, to international construction equipment and industrial compressor OEMs, our customers are very pleased with our Tier One parts program,” says Page. “They like the streamlined, day-to-day parts consolidation and fulfillment we provide, the warehousing, packaging design, as well as the economies of scale resulting from our volume purchasing. But most of all I think the manufacturer enjoys the efficiencies of the program — such as dealing with just Fapco instead of multiple different parts suppliers. Customers also like having a partner watching their back with inventory ready to ship when working with normal schedules and emergency situations,” he concludes.
Let’s get started today with one of our solutions such as our spare parts management, auto parts fulfillment, or cold seal packaging. We have the capabilities to meet all of your needs, regardless of the application. We’ll help you design the perfect packaging solution for your products.