Total cost of ownership reduction

Large industrial manufacturer
Total cost of ownership reduction

Challenge

A large industrial manufacturer had grown through acquisitions resulting in their supply base and number of label parts to grow astronomically. They were experiencing the following issues and challenges:

  • failure of the incumbents to deliver productivity savings year-over-year
  • hundreds of label suppliers resulting in few economies of scale
  • duplication of parts and similar sizes and constructions of their labels
  • over specified and outdated materials
  • line-down situations due to an inefficient supply chain for labels and packaging

Solution

We followed the DRG way to uncover the issues and challenges that the customer was experiencing. The result of this assessment laid the groundwork for implementing a customized labeling and supply chain program, including VMI/VOI for the customer that yielded huge success.

The process involved a thorough evaluation of the customer’s performance requirements for labels, their engineering drawings, and their actual label samples. Our process also uncovered inefficiencies in their supply chain approach for labels, resulting in the implementation of an on-site/near-site label stocking program to improve efficiencies. Results included:

  • 12.4% overall savings
  • 98.5% on-time delivery
  • 174 part numbers & SKUs eliminated
  • 38 suppliers eliminated

Product Spec

Teams Involved

Client Feedback

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