Traditionally, buyers send requests for quote to three vendors each time a requirement for low volume components presents itself. The vendor then provides a quote on the best price in several quantities with their best delivery. After all quotes are evaluated, purchase orders are placed with the lowest bidder. Ironically, this process is the most expensive way to purchase components, particularly for recurring, smaller quantity parts requirements.
The traditional method incurs unnecessary costs in the following key areas:
The most cost effective purchasing method
Over the past fifteen years EPP Corporation has developed a proven supply chain management system that produces maximum savings for customers. If you want more details on how to save 20% on your plastic machined parts using EPP’s system, click here!
The Math
| Avg. Cost Discreet Quote............................ | $300/Part/ per year |
| Avg. Cost Discreet PO................................ | Component cost + 20% |
| Additional Production Cost........................... | Component cost + 15% |
| Cost of Excess Inventory............................. | Cost of Money (interest expense %) x Component Cost x Inventory Days |
| Additional Cost of Material........................... | 15% Component Cost |
| Total............................................................ | Significant Savings |
There is no question that supply chain management is a paradigm shift. However if a company does the math, the pay back is enormous. The supply chain management system used by EPP accomplishes a low cost overall cost with the quality assurance and delivery flexibility provided by US manufacturing. Contact us to realize your 2010 savings today!
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