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Cost Saving Opportunities: Demand-Pooling Through Vendor Management

Custom Bearing smallAt Asia America, we offer a variety of manufacturing services to complement our machined component capabilities. One service we offer is vendor management programs, which allows Asia America to handle the day-to-day time consuming tasks that can slow down an internal sourcing group.By managing vendors for a particular products (bearings, castings, forgings, etc.), we are able to enable our customer’s sourcing group to concentrate on activities that identify cost-savings opportunities. This saves the customer time that would otherwise be spend on handling vendor issues.

The ultimate goal of a strong vendor management program is to reach a point that Asia America can offer the benefits of demand-pooling. While this term isn’t commonly used, the principle of what it represents is simple and effective.

For example:

If Asia America has a vendor management program in place with 3 different customers for bearings, and each of those companies has $4 million in annual spend for bearings, Asia America now has an opportunity to “pool” this demand as a single purchasing entity with the buying power of $12 million.

The benefits of demand-pooling include:

• Combined volume for greater purchasing leverage

• Ability to identify best-in-class vendors for specific products

• Free up key sourcing personnel to concentrate on new cost-saving initiatives

• Added flexibility in purchasing department to absorb resource demand changes in the business cycle

• Managing inventory on machined castings, bearings and machined forgings allows AAC to present more cost-savings options.

Asia America has been successfully running vendor management programs for our customers for many years. By continuing to add to our list of customers who use our vendor management program, we are able to offer more benefits to our clients. Contact us today to see how we can provide cost reduction solutions for your business.

Providing Exceptional Vendor Capabilities For Custom Bearings

We live in a fast paced society, where for many businesses, turn-around time can be critical to success. However, quality and brand trust are still valued among customers no matter how quickly these services can be provided.

For original equipment manufacturers, custom, private-labeled bearings may be the solution for providing tailored components. Asia America provides a wide range of top of the line custom bearings that create streamlined cost reduction solutions for your business.

We Have Stronger Capabilities

At Asia America we provide private labeled bearings for all budgets and applications. We can private label anything from a 700 lb pillow block bearing to small roller bearings, and everything in between. We are able to custom stamp companies’ names and part numbers so that the manufacturer is the primary aftermarket resource for bearings on their machine. We can subcontract at a level that many manufacturers cannot, and we strive to help our customers get their high quality products to their customers.

Partner Credibility

At Asia America, we only partner with high quality bearing manufacturers to private label bearings. Our bearing partners are fully-capable of offering the test data required of OEM’s. All of our custom bearings go through inspections at our partner manufacturer’s facility, as well as our in house quality control lab.

Benefits To Our Customers

There are a multitude of benefits that come from using custom bearings that include cost reduction, reducing step in supply chain, and aftermarket sales. By offering custom bearings, our customers become the main source for bearings on that specific machine. This increases aftermarket sales and improves profitability for their business.

Contact us today to find out how we can find cost reduction solutions for your business.

 

 

Asia America Corporation Announces ISO 9001:2008 Certification

Certification is a testament that Asia America Corporation has the quality management system in place to consistently produce solutions that meet customer expectations.

Asia America Corporation is a Charlotte, NC-based global sourcing and manufacturing services provider, and is proud to announce its recent ISO 9001:2008 certification.

To become ISO 9001 certified, a company must fulfill requirements outlined by the ISO (International Organization for Standardization). Specifically, ISO 9001 requires an organization to demonstrate a quality management system with the ability to consistently provide product that meets customer as well as statutory and regulatory requirements.

ISO 9001 certification also means the organization has demonstrated its commitment to enhancing customer satisfaction through the application of the management system, with processes for continual improvement and the assurance of conformity to customer, statutory and regulatory requirements.

Aaron Hooper, Quality Manager of Asia America Corporation, reinforces the company’s view of customer satisfaction.

“We want to ensure our customers are satisfied. Being certified to the ISO 9001:2008 standard means that all our processes, documentation and improvements of our service meet the requirements. In other words, our customers can expect a consistent, high level of reliability and precision from our work.”

About Asia America Corporation

For over 30 years, Asia America has provided one-stop-shop, international manufacturing solutions to some of the leading OEMs in the U.S. We are an integral part of our customer’s supply chain and help lower their costs for international parts manufacturing with customized programs that encompass quality control testing, engineering, kitting, subassembly, supplier management, and JIT inventory management and warehousing. Learn more at asiaamericacorp.com.

About ISO

ISO (International Organization for Standardization) is the world’s largest developer and publisher of International Standards. ISO International Standards ensure that products and services are safe, reliable and of good quality. For business, they are strategic tools that reduce costs by minimizing waste and errors and increasing productivity. They help companies to access new markets, level the playing field for developing countries and facilitate free and fair global trade. Learn more about ISO here.

Custom Bearings Can Mean Profitability For Your Business

I have been selling components and systems to original equipment manufacturers for many years.  In my new role as Sales Director for Asia America Corporation, I have been looking for opportunities to pair our strengths with market demands.  One item that we have taken note of is our ability to produce custom bearings for manufacturers.  This can enable the OEM to lower their cost for production, but more important, capture more of  what has become a highly-profitable aftermarket parts business.

The recent economic downturn has forced many equipment manufacturers to adjust their business model.  Since the market to sell new machines has been depressed in the last few years,  manufacturers have taken a stronger look at developing aftermarket parts sales and services.  After all, if a manufacturer has been producing machines for many years, their installed base of potential aftermarket business could be very large.

The shift in thinking has changed so much that OEM’s have altered the way they look at their total business model to include aftermarket parts sales into their initial design parameters.  We see more companies designing machines for planned-obsolescence.

As an example, an OEM may want to develop a machine with sub-systems and wear-parts to last for only 5,000 hours.

There may be several reasons for this:

  1. The machine price point is at a level that most consumers have the financial ability to purchase new machines on a regular basis.
  2. The market for this machine demands the latest-and-greatest technology.  That technology typically gets updated on their machines with every new model year.
  3. The first-tier customer for these machines typically sells, or auctions, the machine after 5,000 hours.
  4. By designing the replaceable components to last 5,000 hours, the OEM will enjoy the higher margin aftermarket parts sales from the second-tier customer that purchased the used machine.

If you are trying to sell components, or systems, to this OEM with a design life that is noticeably longer than 5,000 hours, you may think that you have a good selling point, but in reality, it contradicts the OEM’s design goals.

But what about machines that have a very high initial purchase price?  That market is just as attractive.  For machines that have a very large initial price tag, the customer is motivated to maintain and protect their investment.  Preventative maintenance with factory approved components and services are usually the best way to get the longest life out of the machine.  This creates another sales funnel for aftermarket parts and services for the OEM.

Just like the automotive aftermarket, there are several companies that make their profit by selling parts for the off-highway aftermarket.  This threatens the OEM’s business in this area.  It doesn’t take much for a service technician to find a replacement part that is not an OEM component.

Some of the most susceptible components to be replaced are bearings.  Many off-highway machines will have several types of bearings.  Most of these bearings are large, expensive, and will wear from usage.  This is a lucrative wear-part on these machines.

Unfortunately, many bearing manufacturers have their name and part number stamped on each bearing.  This makes it easy for a service technician to call their local bearing distributor for a replacement, rather than the original machine manufacturer.

This is one of the many areas that Asia America Corporation can offer a solution.  With our high-quality bearing partners, we can offer bearings that meet the equipment manufacturer’s specifications, stamped with their company name and specific part number.  By manufacturing a bearing, tailored specifically for the OEM’s machine, with their part number, the manufacturer will be the primary source for bearings on their machine, increasing their aftermarket sales revenue.