Cost Reduction Through Consolidation
Manufacturer of material handling vehicles with several locations across North America.
- The customer bought gears and transmission from different
sources and produced some in house
- A lot of capital investment would be required in order to
- The internal consumption was not high enough to justify new
- Purchasing from various suppliers did not allow them to take
advantage of volume pricing and consolidated just in time
To produce more than 100 different types of gears and transmissions in medium size volumes between 50-20,000 pieces a year meeting a higher quality standard at lower costs.
ODG reviewed the overall requirements in regards to product specifications, ideal delivery schedules and target prices.
Due to its manufacturing capabilities, ODG was in a position to reduce the number of manufacturing steps.
Extensive quality assurance procedures resulted less faulty parts during the process.
ODG carefully reviewed all requirements and came up with a just in time program producing all parts required, due to economy of scale and latest manufacturing technology. ODG was capable of offering better quality products at a lower price.
The customer was satisfied and several locations across North America are now buying from ODG resulting in a win/win situation and long-term partnership.