Challenge: A global $4B Aerospace & Defense manufacturer was challenged by its executive leadership to reduce their product costs to protect profit margins and create greater flexibility in pricing. A cost reduction project was launched, targeting their machined parts, one of their largest direct materials costs.
Solution: This manufacturer launched a global initiative to identify if their machined parts could be sourced from low cost countries (LCC). They used Directworks to manage the sourcing event which included more than 80 cost-related items and 70 technical documents, drawings, and CAD files. Seven suppliers were targeted and were give less than two weeks to respond to the RFQ.
Results: The manufacturer successfully identified two LCC suppliers resulting in $635,000 savings or 30% on machined parts. Directworks was then utilized to manage supplier performance, quality, and risk to ensure that, in addition to savings, all product and production requirements were met.
About the Solution Provider: Directworks provides cloud-based software solutions purpose-built for manufacturers to improve supplier collaboration, total cost visibility, and the efficiency of sourcing and supplier management activities. Leading manufacturers use Directworks to accelerate product launches, expand margins, and optimize their direct materials supply chain for cost, performance, and risk.