VERTICAL AND HORIZONTAL SUPPLIER INTEGRATION: Isolating Responsibility
AMFAS’ customer was frustrated dealing with non-responsive suppliers, and poor performing tools that required constant maintenance. They reached out to AMFAS to consolidate vendors, and to develop new tooling and stamping support cutting down on wasteful recurrent costs.
How AMFAS Helped
A leading industrial lighting company had a longstanding line of panel-mounted switches and indicator lights that remained profitable, and in demand. Unfortunately, the long standing network of stamping, plating, and screw machine suppliers they depended upon used aging, unreliable tooling and equipment. The logistics of managing all operations for these components was cumbersome and expensive. Instead of addressing the poor condition of their equipment, suppliers cited the maintenance of its outmoded furnishings, and low production volume as excuses to pass along price increases. They had to increase personnel and inventory to mitigate the supply chain being so unreliable.
AMFAS saw an opportunity to better meet this company’s unique needs. AMFAS proposed to replace these existing suppliers for a trial period; thus giving this customer the chance to explore another options without feeling forced into a longterm agreement. AMFAS’ network of Taiwanese swiss screw machine shops, array of platers, and precision high speed stampers – combined with methodical FMEA and Quality Control planning, was able to present first articles in months.
Results and Future Plans
In less than 6 months, AMFAS transformed years of frustration into customer satisfaction. Our customer consolidated with AMFAS a global scattering of four screw machine shops, two stamping vendors, and a metal plater. They also outsourced several secondary operations that had been done internally on aging equipment. AMFAS’ team tooled and qualified over 30 parts, saving this customer in aggregate more than 20%; while streamlining the supply chain, and lowering intangible costs associated with eliminating marginal performing suppliers.
Pleased with the outcome, this customer has opted to significantly expand its relationship with AMFAS.