One of the benefits of using a supplier who manages the inventory levels is that a customer can potentially lower their per unit costs. Described below is a true example of such a case.
Customer “A” purchased Part XYZ ten times in the last year. The quantities ordered ranged from 100 to 4,000 parts. Customer “A” ordered a total of 16,900 pieces during the year at a total cost of $11,661, creating an average per piece price of 69 cents.
If Customer “A” had the supplier manage their inventory for these parts, the supplier could have run them more efficiently based on the history of the part. In this case, the supplier could have saved the customer $3,718 that year at a per piece price of 47 cents.
Though this is not always the case on an individual basis, by allowing the supplier to review and quote all, or a group of parts, the supplier can look at how they can utilize their internal processes to save the customer money on the whole package. DuraTech has been able to typically save 15% for customers who utilize our supplier managed program.