Brand Equivalent Case Study: Achieving faster delivery & lower costs using functional equivalentsPosted: October 8, 2018 Filed under: keensert, key-locking inserts, Mil-Spec, Supply chain - manufacturing | Tags: keensert, manufacturing, supply chain Leave a comment
October 9, 2018
Here at MF Supply we spend a lot of time sourcing hard to find, back-ordered or out of stock OEM hardware brands for our customers. Much like brand-name pharmaceuticals such as Tylenol and Advil are available generically (as acetaminophen and ibuprofen), some brand name fasteners are also available as “generics,” “crosses,” “alternatives” or “functional equivalents.” In the world of fasteners, a functional equivalent fastener is a part that is the same as the brand-name product in form, fit and function, including material and plating specifications. 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 59% and shaving lead time by over 20 weeks. This time and money savings gave the manufacturer an advantage over their competition, which helped them win the job.
A Tier 3 aerospace manufacturer of subassemblies is bidding on a job for a large international Aircraft OEM where the bill of materials calls for 172 pieces of a 1/4-28 x 1/2-20 Floating Key-Locking Insert in A286 stainless steel with a Fairchild/Alcoa Keensert® part number KNKDL428JT. As the part is in nonstock status at Alcoa, the delivery time is 28-29 weeks (yes that is half of one year which can be standard for aerospace related and mil-spec parts). Here is the dilemma – based on this delivery schedule, the manufacturer cannot meet their prospective client’s two month delivery requirement.
MF Supply gets a print of the part and is able to cross it to an exact functional equivalent for an alternative brand we distribute. Our factory can manufacturer and deliver the part in 4-5 weeks at 1/2 the cost of the OEM brand fastener. The alternative parts will be manufactured with full lot traceability and manufacturer’s test reports, a certificate of conformance and a DFARS statement. The client (Aircraft OEM) approves the substitution and awards the manufacturer the business based on their ability to make the 2 month delivery requirement. A Purchase Order for the Floating Key-Locking Insert is issued to MF Supply. As promised, within 5 weeks, the complete 172 inserts, with full paperwork, are delivered to the manufacturer. The subassemblies are produced and delivered to the end client on time and underbudget.
-MF Supply functional equivalent fasteners shorten delivery time from 28-29 weeks to 5 weeks.
-KNKDL428JT price = $200 each. Total cost $34,400.
-MF equivalent price = $82.00 each. Total cost $14,104.
SUMMARY / BENEFIT
-Cost savings of $20,296 or 59% (not a typo!).
– Tier 3 aerospace manufacturer wins bid and is awarded job.
-Work is completed on time.
-Job is more profitable due to cost savings realized on inserts.
-Job has been a repeater and a money maker for Tier 3 aerospace 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.
Before you shop, check the bill of materials to see if it specifically calls out a particular brand name along with the part number. If no specific manufacturer’s name is listed, then you can typically use a generic alternative or equivalent product?. For more complete info, check out our July 27 blog for your 4 point checklist on determining if functional equivalents will work for your business.
For more information about MF Supply contact:
Robin Lieberman, President