Automotive supplier saves $254,000

Value of “hard” and “soft” savings

As the American automotive industry enjoys an upswing in sales, experts with Expense Reduction Analysts (ERA) specializing in the manufacturing industry understand that achieving healthy earnings comes from both “hard” savings dollars and “soft” savings process improvements. 

Our client, an automotive supplier with three production facilities in Michigan and Georgia, was simply over worked. It worked with nearly 60 suppliers, handled 11,000 invoices and purchased 24,000 line items every year.

Realizing it needed to increase efficiency to remain competitive, the manufacturer turned to factory consumable experts with ERA.

ERA Consultants thoroughly analyzed the client’s $2+ million annual spend and prepared a detailed RFP that included a market basket with 80% of the top dollar-volume purchases. Analysts evaluated bids based on price as well as service and quality criteria to ensure the “best fit” with a compatible supplier.

Process improvements valued at $150,000

ERA recommended consolidating purchases with a single supplier that could provide Point-of-Use (POU) distribution and Vendor Managed Inventory (VMI). The solution process also took into account the supplier’s ability to service the client’s anticipated future growth.

Today the manufacturer works with a single supplier for contract items and handles only 52 invoices a year. Combined with the POU and VMI streamlined processes, lower inventory carrying costs, automated ordering processes and lower obsolescence, “soft savings” are valued at an additional $150,000/year.

ERA’s solution includes vendor consolidation and improved processes with POU and VMI

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