April 11, 2017 – Charlotte, NC – Falcon Fastening Solutions, Inc., a cost-reduction specialist for original equipment manufacturers (OEMs) reports an average 13.94% client cost savings on production components in 2016.
Falcon reduces waste from an OEM’s supply chain via vendor managed inventory (VMI) programs. These VMI programs are tailored specifically for each facility’s needs and goals associated with the management of their low-value, high-volume production parts.
“Our clients really excel at manufacturing. That’s their core competency, not inventory management. That’s the problem we help our clients solve. Our core competency is reliably managing tens of thousands of tiny specialty parts.”
In a recent infographic Falcon illustrates their client’s 2016 documented cost savings in relation to hidden costs associated with procuring and managing production parts as well as the areas where Falcon’s services were able to reduce cost within their client base.
“Direct acquisition cost, or piece price, of the typical production component only accounts for roughly 15% of the total cost of ownership (TCO),” explains Don Nowak, President and Owner of Falcon Fastening Solutions. “Hidden costs are the other 85% of TCO. Hidden costs consist of things such as labor, freight, holding costs, error-related costs, safety stock, and so on. Our manufacturers depend on us to help them reduce all of these additional costs in order to reduce their piece price in a sustainable way.”
For 2016, Falcon reports an average client savings of 2.5% on labor-related costs such as purchasing, receiving/stocking, accounting, inspection and quality control activities, etc. Freight savings were an additional 2.3% average savings. Error-related costs, such as down time, poor quality, expedites and item obsolescence accounted for another 3.4% of the average client savings. Inventory carrying cost savings were the largest portion of savings at 4.1% and the piece price savings added another 1.1% to the average total cost savings for clients in 2016.
Falcon also carries ample safety stock in their local warehouse and a constant flow of product in its supply chain for clients benefiting from Falcon’s Reliable Stock™ Vendor Managed Inventory programs. Falcon Fastening reports a documented quality rating of 99.95% and an on-time delivery rate of 99.72% for clients in 2016.
This is the third consecutive year Falcon has published annual documented savings. Every quarter each of Falcon’s VMI clients also receive a complimentary individualized cost savings report. To learn more about Falcon’s vendor managed inventory programs, visit: https://falconfastening.com/reliable-stock-brochure-download/
If you’re interested in mitigating the impact of forecasted price increases or supply chain incidentals or you’re just interested in discovering how to make your production process leaner Reserve Your Complimentary Kaizen Event Package Today(FREE events are limited and granted on a first come, first serve basis).