When it comes to getting products to market, the pressure can be extreme. The manufacturing industry, a highly competitive and innovation-driven industry, is no exception. Between meeting aggressive timeframes while still maintaining top quality design, addressing compliance regulations, and aesthetically pleasing marketing and sales teams, opportunity to reduce costs and gain a clear view of the market landscape can quickly be lost during the Product Lifecycle. Enter the role of Strategic Sourcing and Procurement (SS&P).
Throughout the Product Lifecycle, SS&P can help alleviate the burden off engineering teams to help shorten the development timeframe and meet cost targets to make the design of a quality product. While in the traditional approach, SS&P is brought in later Product Lifecycle – when costs need to be cut immediate to offset dwindling sales. However, by doing so, companies limit the impact their SS&P groups can have in not only reducing costs, but gaining access to supplier innovation, and more. Elaborating on this concept, Source One has recently released its newest supply management whitepaper titled, Strategic Sourcing Throughout the Product Lifecycle: Balancing Competitive Costs with Innovation & Speed to Market.
The white paper also explores how SS&P teams can be leveraged at each step of the Product Lifecycle, including the Ideation Phase, Production, Manufacturing, Maturity, and After Sales and Decline -reinforced with case-study examples for each phase. Check out another example, not included in the white paper, of how Source One’s direct materials sourcing experts helped and electronics manufacturer reduce costs during the Production Phase.
Product Re-Design - Embedded OS and Motherboards
The Situation: A global industrial electronics manufacturer with operations facilities across North America, Europe, and Japan was interested in maintaining a stronger focus on cost cutting during the design phase of a new product development. The system’s motherboard was being developed from the ground up, leading to potentially higher costs than an OTS alternative product could offer. Additionally, the firm faced a risk of being locked into a sole supplier given the customization being built into this component.
The Solution: Source One was brought in to determine if any cost savings could be identified at the component level prior to the start of production. Source One sought to confirm if any commercial-grade, OTS solutions could be implemented as an alternative to a custom component. Using our engineering expertise, Source One was able to:
- Develop a Scope of Work and specification documentation based on the integration requirements of the solution’s individual components and interrelated hardware and processing requirements.
- Conduct market research and go to market with an RFI to identify commercial-grade, OTS solutions that fit the requirements of the product under development.
Using such OTS components offered two key benefits to the client. First, the supply chain risk of working with a single supplier was removed, as multiple VARs could provide a common product. Second, by introducing competition among the VARs into the sourcing process, the client was able avoid a loss of negotiation leverage that would have been a key concern from a potential single-source supplier.