Metalworker lowers costs and improves on-site inventory management system

Precision machine shop introduces process and procedure changes; cuts costs for tools and supplies 13% for annual savings of $39,000

Many manufacturers find that an analysis of Factory Consumables by Expense Reduction Analysts (ERA) yields unexpected but valuable information. For example, Consultants often help senior managers focus on the sheer number of suppliers and brands involved in their companies' manufacturing processes.

A Pennsylvania-based manufacturer of precision-machined parts and assemblies illustrates the ways in which these benefits often occur.

ERA's client has been in business for 70 years, growing from a small owner-operated job shop to an 80,000 square-foot manufacturing facility with more than 175 skilled metalworkers. Every week, the company delivers more than 560,000 high-quality parts and assemblies to 100-plus customers in the medical, agricultural, transportation, and aerospace industries.

Business changes meant the manufacturer was producing fewer products with more expensive materials. The company knew it needed better control over its cutting tools and supplies. But how?

ERA Consultants with industry expertise analyzed data that reflected purchases from more than 60 vendors. Using proprietary procurement tools, Consultants prepared a comprehensive RFP to evaluate prices as well as inventory control factors.

Ultimately, the client consolidated its purchases with fewer vendors and Consultants negotiated installation of free computerized tool-vending machines that control dispensing, reduce waste, and save money.

• Category - Factory Consumables
• Client Spend - $300,000
• Annual Savings - 13%
• Hidden Savings - $39,000
• Suppliers - Incumbents
• Money saved per client-hour invested - $6,500

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