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Case Study: Smart Manufacturers use Brand Equivalents to Save Time and Money

Posted: March 6, 2017 | Author: | Filed under: keensert, key-locking inserts, Mil-Spec, Supply chain - manufacturing | Tags: , , |Leave a comment

Newsletter
Volume 20
March 7, 2017

In our January blog we discussed how Keylocking Inserts are often referred to by their trademarked brand name Keensert®.  The Keensert® is not alone! Did you know that many brand name OEM fastening products and components can be crossed to a generic alternative equivalent product?

Before you shop, check to see if the bill of materials specifically calls out a particular brand name. If no specific manufacturer’s name is listed, then you can typically use a functional alternative or equivalent.   Using equivalents and alternatives to OEM brand names can be a smart way to reduce long lead times and/or cut expenses.

Check out this Case Study where an OEM brand was substituted with a functional equivalent, reducing costs by 37% and shaving lead time.  This time and money savings gave the manufacturer an advantage over their competition, which helped them win the job.

Little Known Ways to Save 37% and Shorten Delivery Times
 
ISSUE
Display Manufacturer is bidding on a job where the bill of materials calls for 15,000 pieces of an 8-32 x .312 brass insert by SPIROL®. SPIROL® has 265 local stock, 5000 due in 10 days, balance in 4-5 weeks. Based on this delivery schedule, the Display Manufacturer cannot meet their prospective client’s two week delivery requirement.

SUGGESTED SOLUTION
MF Supply gets a print of the part from SPIROL® and is able to cross it to an exact functional equivalent for an alternative brand we distribute and our factory has in stock. Samples of the alternative fasteners are delivered directly to the customer within 24 hours for inspection and testing.

The alternative sample fasteners are approved for production by the Display Manufacturer within 2 days. The prospective client approves the substitution and awards the manufacturer the business.  A Purchase Order for the inserts is issued to MF Supply. Within 48 hours, the complete 15,000 inserts are available from the factory and delivered to the Display Manufacturer.

TIME SAVINGS
-MF Supply functional equivalent fasteners shorten delivery time from 4-5 weeks to 2-3 days.

COST SAVINGS
-SPIROL® Price = .11938 each. Total cost $1790.
-MF equivalent price = .075 each. Total cost $1125.

SUMMARY / BENEFIT
-Cost savings of $665 or 37%.
-Display Manufacturer wins bid and is awarded job.
-Work is completed on time.
-Job is more profitable due to cost savings realized on fasteners.
-Job has been a repeater and a money maker for Display manufacturer.

In summary, if your bill of materials calls for an OEM brand fastener or component, find out if you must have the brand name product.  In cases where a generic or equivalent alternative part will work, there might be an opportunity to save money and shorten delivery time.

For more information about MF Supply contact:

Robin Lieberman, President
robin@mfsupply.com
973-777-5411

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