The Manufacturing Phase of the Product Lifecycle - the product has now successfully been designed and now's the time to identify suppliers who will provide the materials and assembly. This is usually the phase of the Product Lifecycle where Strategic Sourcing and Procurement (SS&P) groups are "allowed" to get involved. In many cases, SS&P will help reduce the costs of each component, consolidate the supply base, or leverage higher volumes with existing suppliers.
However, Procurement can deliver further value by working alongside engineering teams to expand on existing component opportunities - leveraging Engineering's insight on critical vs. non-critical component selections and DFM services offered by fabricators to reduce component count and drive production efficiency.
This is just one of the many ways SS&P can be leveraged during the Product Lifecycle that is explored in Source One's latest supply management whitepaper titled, Strategic Sourcing Throughout the Product Lifecycle: Balancing Competitive Costs with Innovation & Speed to Market. Source One's direct materials sourcing consultants share their experience helping enterprises optimize their budgets during product development and go-to-market, including real case study examples. Check out another example below on how Source One helped a microscopy manufacturer reduce costs.
Case Study: Contract Manufacturing
The Situation: A global microscopy manufacturer was looking to lower the overall costs of manufacturing operations with five existing product lines and transition two product lines from European/Asian to US managed manufacturing operations.
The Solution: Due to the complexity associated with the scale of the project and mounting pressure from their parent company to achieve savings targets, the manufacturer engaged with Source One to tap our extensive engineering subject matter expertise and bridge the widening gap between management, engineering, and the overwhelmed supply base. With our team’s unique background in both
Engineering and Procurement, along with the ability to speak a common language with all parties, we were able to set a realistic timeline and cost savings goals with management, then manage the outsourcing RFP process with the nation’s top contract manufacturing suppliers.
- Parse out the distinct phases of the sourcing process and segmented it for the client so they could understand the focus of each stage and therefore develop realistic timelines and set internal and external management expectations.
- Develop best practices for structuring large technical bid packages.
- Streamline sharing complex specifications with suppliers, then enabled management of the bid process with the technical team within expected timeframes.
- Effectively analyze the market to clearly present opportunities and challenges to the management team so they could make an informed decision and foster a long-term partner relationship with the final set of contract manufacturers.
Through these efforts, the client became familiar with standard industry practices and processes, adapted an industry-focused outsourcing strategy, became more competitive in their market by reducing manufacturing cost in excess of 12%, and freed up Engineering resources for New Product Introduction projects to sustain their market leadership position.