Consumer Products Customer (Cost savings)
A large Consumer Products Customer presented an opportunity to quote on wire forms for their best-selling product line. This customer was looking for a not only a significant reduction in overall production costs, but a solid partnership with a reliable production company.
Wire Products Company responded to that opportunity and submitted a quote outlining our existing manufacturing capabilities, which included wire forming and a secondary off-line operation. Our price quote came in about 2% below their current price, not enough to move the business after a 30-year relationship with their existing supplier.
However, Wire Products Company’s Tooling and Engineering team knew that an investment on their part would result in significant production savings by eliminating the use of a secondary off-line operation. They went to work and found a piece of equipment that could produce the parts complete without any secondary operation, thus reducing the cost of production. This resulted in the Wire Products Company being awarded the business.
Wire Products Company collaborated with the new customer to arrive at a financial agreement that would allow Wire Products Company to overcome the cost hurdle of the equipment and tooling, the significant investment was made and the machine was ordered and the tooling was built to support the production.
For the first year, Wire Products Company shipped the parts at the originally quoted price, saving the customer some money on every part purchased. In the second year, the customer began to appreciate some significant savings. Both companies took full advantage of the capabilities of the new equipment. The customer alone has saved close to 18% on each part shipped, about $72,000/year. This partnership is now in its 6th year.