Results

Problem
A large telecommunications company identified an opportunity to consolidate their supply base for machined components and achieve a significant cost reduction. Internal resources were consumed with tactical concerns and lacked experience in the technologies required to manufacture these parts efficiently. The number of parts was very large (~300) with annual requirements ranging from 1,000 to 300,000 pieces. Secondary operations (particularly finish plating) were critical and the logistics and handling issues associated with managing a number of finishing suppliers was another obstacle to a comprehensive RFQ. It was believed that these issues precluded utilization of suppliers from outside the New England area, even though some of the parts seemed ideal for low cost region manufacturing. As a result, progress towards the cost reduction goals had been piecemeal and sporadic over the last 18 months with little in the way of concrete results.

Solution
ThreeCore personnel were able to review and categorize the large package of parts into separate RFQs by material and technology. Using our knowledge of the materials, methods and supply base, ThreeCore was able to engage capable suppliers in North America, Mexico, the Far East and Europe. Logistics and finishing requirements were addressed and analyzed as part of the sourcing process. Incumbent suppliers were assessed and included in the sourcing effort.

Results
Annual material cost savings were in the range of 35% on an annual value of $8M. The customer was able to consolidate both the machining and finishing supply base while maintaining delivery and inventory management goals. These results were obtained by engaging capable suppliers in the Northeast U.S., combined with suppliers in lower cost regions for appropriate packages of parts. The project was completed within 4 months, with cost savings beginning to flow to the customer in the 5th month.