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Strategic Sourcing Plan Achieves Cost Reduction
01 Jun 2005
Hi-Finish Casting recently embarked on a structured purchasing programme to achieve cost reduction through innovation, process improvement and strategic sourcing. The RaPP Programme ensures that all activities in the purchasing function are focussed on business plan achievement. The programme was delivered with assistance from the SMMT Industry Forum and consultants from Indigo Procurement and has resulted in clear bottom line benefits.
Before initiating the RaPP Programme, Hi-Finish had no structured plan for purchasing. The programme identified overall savings opportunities between direct material savings, overheads and process improvements, to give a potential impact on profitability of 46%.
A new vendor rating system has improved supplier performance by up to 15% in a number of cases and a consolidation of supplier numbers has been achieved.
Consumables are now sourced from a single supplier (instead of 14), and single monthly invoicing has reduced admin costs. Further, cash flow has improved through the introduction of consignment stocking.
Hi-Finish supplies zinc and aluminium die-cast products and surface coatings in chrome, powder coating and lacquering. The company's core business is predominantly as a second tier supplier to the automotive sector. Other sectors serviced include, domestic, electrical, hardware and general engineering.
Tel. 0121 706 0691
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