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:
- Cost Efficiency: Offshoring can drastically reduce production costs when managed correctly.
- Expert Management: Utilizing a specialized team ensures smooth transitions and sustained quality.
- Transparent Communication: Maintaining clear and transparent communication with offshore manufacturers is crucial.
Recommended Reading:
- “Global Supply Chain Management” by Matt Drake, Business Expert Press.
- “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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