A National Semiconductor OEM Found
An Integrated Supply Chain Solution
Working together, the iPower team and the OEM representatives analyzed product usage and purchase practices and made a determination that 8,000 parts from over 100 suppliers could be consolidated into five material groups. These five groups were ultimately converted into a single vendor number. The products involved were:
- Bearings, Power Transmission
- Fluid Connectors, Seals and Gaskets
- Other Industrial Components
Double Digit Savings
The first round of review revealed that re-quoting these newly formed material groups would result in a double digit cost reduction. As part of the implementation, the iPower team members were assigned to work on-site to guide the conversion of this massive number of items. The iPower technology permitted the routing of thousands of SAP transactions to its supply base maintaining PO, PO line, and Quantity integrity.
Critical to the long term plan for this conversion, iPower had the experience and capacity to convert inventory items to a Point of Use VMI program. With implementation, the iPower team assigned one full time buyer-planner and one part-time expeditor to handle thousands of transactions monthly. With the conversion of 8,000 parts to iPower sourcing, a total of 75 existing vendors were eliminated.
At this phase of the implementation, a lot of purchasing capacity was freed up, which permitted a change of focus to the demands of critical A and B items. A review process was put in place to constantly assess the mix of items to be handled by iPower. This allowed a highly collaborative free flow of critical items to be pushed back up to the customer to manage and new C items pushed down to iPower to acquire.
This particular iPower client has benefitted from its on-going benefits for more than five years. The program has grown three fold over that time and continues successfully today. One important measure of success has been the dramatic reduction in lead times for delivery. Today, over 97 percent of all items are under 30 day lead-times. On time delivery and quality has been outstanding resulting in iPower being cited frequently for performance awards.
Relying on the breadth and depth of product available from its six member companies, iPower New England provides its customers with an unparalleled supply chain management solution.