When a North American tech hardware manufacturing company needed to reduce costs for their submersible control cable project, they turned to REDUx Engineering’s contingency-based managed offshoring service. Initially, they were paying $74 per piece with local sourcing, leading to substantial annual costs.

Project Details:

• Annual Volume: 7,500 pieces
• Original Cost: $74 each
• Project Time: 3 months
• Mold Cost: $8,000 (one-time)
• New Cost: $32 each post-offshoring
• Savings: $42 per piece
• Annual Savings: $315,000

By leveraging REDUx Engineering’s expertise, the company managed to bring down the cost to $32 per piece. This significant reduction was achieved within a three-month timeframe, with a one-time mold cost of $8,000. The result? An impressive annual saving of $315,000.

REDUx Engineering specializes in making offshoring seamless and profitable for companies with revenues between $10M-$50M. They provide a no up-front cost service, operating on a contingency basis, taking 20% of the landed savings. This ensures that clients see tangible savings verified by their finance teams. The comprehensive service includes a team of Registered Professional Engineers, 6-Sigma ASQ-Certified Supplier Development Engineers, and local Sourcing Specialists managing projects from start to finish.

Lessons Learned and Recommendations:

1. Cost Efficiency: Offshoring can drastically reduce production costs when managed correctly.
2. Expert Management: Utilizing a specialized team ensures smooth transitions and sustained quality.
3. Transparent Communication: Maintaining clear and transparent communication with offshore manufacturers is crucial.

Recommended Reading:

1. “Global Supply Chain Management” by Matt Drake, Business Expert Press.
2. “The Handbook of Global Outsourcing and Offshoring” by Ilan Oshri, Julia Kotlarsky, and Leslie Willcocks, Palgrave Macmillan.

Finding and managing high-quality, high-savings offshore manufacturing for small to medium-sized North American businesses can be confusing and risky. At REDUx, we partner with you to manage the process end-to-end with no upfront cost, instead, sharing only 20% of the net ongoing savings. Contact us at www.REDUxEngineering.com today!

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