Tier 1 kitting and assembly services are pushing the process forward in today’s world of lean processes and just-in-time delivery. Suppliers who step up to the plate with creative solutions can cut costs and reduce headaches.
Companies that provide kitting and assembly services make end users happy because they are more than a typical supplier — they are full service providers, problem solvers and business partners.
When a major automaker needed help engineering packaging, assembling, warehousing and delivery of fuel modules to its distribution centers, the professionals at Fapco looked at the overall set of challenges and quickly established themselves as a Tier 1 supplier in the automakers logistics supply chain.
Larry Gardiner, president of Fapco, Inc., recounted how the process began in 2003: “They were having a lot of recalls due to damage on some fuel mod kits. The lever that shows how much fuel was in the tank kept breaking.
These modules are inside the gas tank with an electronic indicator that sends signals to the instrument panel to gauge the level of fuel. We found that these arms were getting damaged because they weren’t packaged properly,” he said.
Engineering a Packaging Solution
Fapco’s in-house Packaging Engineers, Rex Krumrie and Scott Gorton, addressed the kitting & assembly issue. “Further up the supply chain, the part was having field damage. It was being packaged as a foam-in-place item,” explained Gorton. He said since the modules were slightly different for varying model cars, as well as having a right and left gas tank placement, the challenge was to design a uniform package that would house and protect all the different part configurations.
“They are a common assembly but very different in physical shape. So, we designed a mold that would fit both parts in a standardized foam block package and pretty much eliminated the damage problem,” said Gorton
The nice thing about these molded foam block solutions, as Gorton explained, is that they provide uniformity for difficult parts. Workers must arrange the part perfectly because it will only fit in the mold one way. This reduces operator error in the packaging process to assure quality packaging of the part each time. “In high volumes, this type of packaging actually provides a cost savings because it’s quicker handling to put these in the box than having to foam them in place,” he said.
The Logical Transition to Tier One Supplier
The management team at Fapco explained that for the U.S. Big Three automakers and many other large manufacturers, it just makes sense for kitting and assembly packaging specialists to utilize all of their integrated parts flow management process and tools to become Tier 1 suppliers.
Fapco poses the question: “Why should the manufacturer deal with 10 parts and all of the suppliers involved, when they can just sell one part, or one kit, in one box-consolidated, warehoused and order fulfilled by us?”
Gorton elaborated, “From the large manufacturer point of view, outsourcing parts is cheaper than taking the parts back in-house, and, our customers end up buying one assembled part from us as opposed to multiple parts from multiple suppliers. The solution became clear. They said ‘Here’s where you can buy fuel modules, here’s where to buy gaskets, here’s what the parts cost, give us our cost for the complete package. “We buy part A and we buy part B, and we consolidate to meet our customer’s pricing.’ And that’s what we continue to do,” he concluded.
As a specialist in integrated parts flow management, Fapco has found a niche in Tier One kitting and sub assembly. The company now continues to refine and further expand their service by also taking on projects like consolidating parts for a 15-piece carburetor into a carburetor rebuild kit for a major outboard marine manufacturer.
“We are now officially a Tier One supplier. We don’t go out and do engineering of the part, or that sort of thing. We have our customer perform all the engineering and design work. We just buy them as a replacement part from the customer’s suppliers. What started out as two fuel modules for one major automotive parts maker has grown to now hundreds of different parts and kits. We’ve done this since late 2004 and we’re running at the rate of about 4,000 a month for about six months out of the year, so we’ve put out a few. Tier 1 has now become a major part of our business,” concluded Larry Gardiner, president of Fapco.
Wrap It Up
Adapting to Customer Needs — To become more efficient , Fapco retooled the way it handled business with additional staffing in the purchasing department, and significant capital investments in inventory and warehousing with over $200,000.00 in fuel module inventory alone.
Long Term Investing — Partnering with our customers and utilizing our integrated parts flow management team, we became a Tier One supplier showing our customer a commitment to bulk inventory and warehousing of parts that may not be fulfilled until years later. The bulk of the inventory is kept at minimum quantity level by part number. But a safety stock quantity can also be kept ready in anticipation of future sales.
Your One Stop Shop Solution — From custom engineered parts packaging solutions, to completely scalable and adaptable clamshell and aftermarket parts packaging, kit packaging, returns packaging, private labeling and consumer products packaging, Fapco is the Tier 1 Full Service Provider that simply does it all.
