Tuesday, May 6, 2014

Discover how collaborating with our customer on strategic outsourcing netted a big win for both

There’s traditional outsourcing of component parts, including fab and machining as needed. And then there’s strategic outsourcing. This is the story of how Ace partnered with one of our customers on strategic outsourcing. The result? Big wins for both!

A global leader in process technology, our customer manufactures complex equipment for the food and pharmaceutical industries. Outsourcing component parts on an as-needed basis was an expensive and time-consuming process. So Ace talked to the customer about how we could collaborate to simplify outsourcing and make it both faster and less costly.

Ace came up with two options:

Option one: outsourcing by machine type. This option includes kitting, where components parts are grouped together so that the customer doesn’t have to worry about all the component parts being at the right place at the right time. This option also includes mechanical assembly and subassembly of windows, doors and conveyors.

Option two: full machine release; which allows the customer to send us an order for equipment that might have as many as 700 different parts. Ace manufactures all component parts, inspects and sends kitted component parts to the customer, sequenced according to how they build the machine.

How does the customer benefit?

Our customer reduced and, in some cases eliminated, internal processes like:
  • Receiving parts
  • Inspecting parts
  • Material handling

They also experienced gains in:
  • Quality of assembled parts
  • Fewer production delays (time looking for lost parts)
  • Administration – less purchasing and accounting time
  • Reduced investment in capital equipment

How did Ace win?
  • We increased our customer’s capacity and won their trust
  • We proved that, by partnering, we could reduce both ours’ and our customer’s administrative costs
  • We significantly reduced POs, allowing the customer to send one BOM that included a multitude of parts
  • Both parties had more ownership of the project
That’s what we call a win-win!

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