Case Study - Cost Reduction Initiatives
SerCom - reducing your costs and time to market
The Challenge
Our client, a global provider and leading brand name for high end consumer products, appointed SerCom Solutions to provide accessory kit bundles for its product range in Europe. SerCom's challenge was to support our client's aggressive cost reduction targets while maintaining significant volume flexibility and very tight lead times.
SerCom's Solution
SerCom targeted cost reduction opportunities in various ways by identifying every cost driver and working with supply base, our internal process owners and with our client to convert every opportunity into reduced cost for our client.
Firstly, we leveraged our considerable book of business to improve pricing on each component - mainly print, CDs and packaging. We worked creatively with our suppliers to ensure capacity is made available to meet our client's tight lead times.
We then worked on redesigning the kit content to remove cost. The results of this activity included the movement of some content from print to CD. Additionally, the page count on one document was halved by reducing the font size and changing from portrait to landscape format. This change alone reduced kit cost by more than 25%. The resultant reduction in kit size and weight drove additional savings in shipping costs - bringing the total savings for this kit close to 40%.
As we firmed up on kit content changes, our manufacturing team developed a proposal to automate the bundle assembly process. SerCom's rapid decision-making process ensured this project was approved and implemented quickly to deliver cost savings to the customer. It also significantly reduced the requirement for labour and thereby improved our flexibility - an important factor in supporting an erratic demand pattern from our client.
SerCom ships product to a variety of locations within Europe . We worked with our client to improve demand visibility from the various locations in order to improve procurement and manufacturing efficiency. Our client now has a number of internal initiatives in place that will help us eliminate further costs from their product.
The Results
- Very significant cost reductions delivered to our client in a relatively short period of time.
- Automated assembly process to further improve quality, improve throughput and reduce costs.
- SerCom has consistently succeeded in maintaining a very high performance rating with our client