$12,000 Savings

One of our clients asked us to develop a low cost accessory for their main product. They wanted a food safe low cost liquid tap for a plastic vessel that came completely packed with instructions and install tool.

W20160612_125309e did our research and quickly found the ideal food safe Polypropylene tap for 46¢ from one of our most trusted suppliers, who also provides packaging. We also replaced the PVC gaskets with a custom Silicone gasket for an additional 3¢ for the best possible food safety.

 

 

The client also wanted to include a tool so the end customer could create the needed very clean 25mm hole free of scratches in the plastic vessel even if they do not have a hand drill. Bacteria growing in scratches is a real concern for this product line so the hole had to be cut very clean.  After considering many methods, we fostep-drillund a “Step-Bit” to be the only tool that could economically create a clean hole of that size using a drill or by hand with a simple socket/ hand driver. Though the average cost in China was $3.20 from the 48 potential suppliers we contacted, we settled on a supplier for $2.60 each including a hard plastic protective case. An order was made and the kit was a success.

jessies-tapered-bitBut we were not done with the cost savings. We knew since this was a one-time-use tool in thin walled plastic, it didn’t have to be standard high quality drill bit steel. It also didn’t need the machined steps or lettering as those add machine time during manufacturing. So we had a tapered drill bit prototype made out of a lower cost bearing steel. It actually worked better. It cut the cost from $2.60 to $1.275 and shortened lead times. This one change saved the client roughly $12,000 annually.

We have the drill bit manufacturer send the drill bits to the plastic tap manufacturer who prints full color instruction manuals (That we created) and packages it all in a zip lock bag for retail before packing it into the container with the clients other goods for international freight.

This is an example of Part Distribution LLC meeting the client’s needs, but continuing to find ways to cut cost over time.