- August 8, 2014
- Posted by: EPP
- Category: Purchasing Help
Can A Plastic Machining Specialist Reduce Unit Cost on Plastic Machined Components?
Yes, a plastic machining expert can provide significant cost savings on plastic machined components by reducing unit cost. However, the plastic machining expert must utilize a proven supply chain management system. Utilizing a proven system allows for the plastic machining expert to provide significant savings that purchasing from a plastic machining vendor with a traditional purchasing method could not. Here is how savings can be achieved per unit on plastic machined components:
Most plastic machining vendors evaluating a request for quote are unsure how the order will be placed. The plastic machining vendor upon purchase order inquiry if faced with uncertainty from its customers. The plastic machining vendor wonders if the order will be a one-time order, whether it will be the only order for this plastic machined part this year, when the order will be placed, and what the schedule will be. If the plastic machining vendor needs raw material to produce the part, the material needs on the quote are based on the quoted quantity only and, because of the uncertainty, will represent a higher cost. Uncertainty and low volume can add 15-20% or more in the unit cost. EPP evaluates all the plastic machined parts needs together as one requirement. Material needs are combined and submitted to the material vendor. The material vendor is advised that the material will be released as needed and is expected to hold the price for one year. In the end, materials saving can exceed 20%. The proven supply chain management system from EPP provides savings to both fixed and variable costs, providing plastic machining customers with significant savings across the board on plastic machined parts.
Click Here for a thorough analysis on how to save on plastic machined parts through our proven supply chain method
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