Cost Cutting Initiatives

How the Outsourcing Network (ONet) can help clients
with major cost-cutting initiatives:

• First, we meet with the appropriate people in the company and choose two or three purchasing categories on which to concentrate (Metal parts; castings, forgings, stampings; electronic or fabricated assemblies/sub-assemblies; etc.). We suggest focusing on the parts that require the most labor, or involve assembly, as this is where the greatest cost-savings can be realized.



• ONet would then sort the different parts of each category into families of similar parts (for example: spacers, armrest assemblies, clamp back spindles, etc.). This enables us to obtain discount pricing for a group of parts, rather than pricing out each part individually.
  
  
• Once the parts are selected, our process engineers travel to the appropriate client location and meet with the engineering and quality control personnel, to define the customer's expectations. Material and process specifications, inspection and testing criteria, assembly and packaging instructions, and quality approved samples are reviewed, and obtained.
  


• ONet would then determine which parts in each category would be most efficiently made in the US or in China. Most often, our project managers would know which factory makes the most sense, but if there is any question, we would get the part quoted in multiple locations.
  
  
• After the proper due diligence is completed, we would suggest the client move forward with those parts where there is a cost savings of 10% - 15% or more.
  
  
• The next step would be to go through the FAI process and deliver first article samples. Once samples are approved, ONet would start production and proceed to work on the rest of the parts in that category. We could also start working on two or three new part categories so your company could expand the effectiveness of the cost-savings initiative as quickly as possible.

Your company could move as slowly or as quickly as they wish-testing the waters before diving into global contract manufacturing. Regardless of your decision, ONet is dedicated to offering our experience and knowledge to help your company realize the full cost-savings of international contract manufacturing.

To learn more about ONet's capabilities or processes in this area, contact us at 800.722.0970 or by visiting our Inquiry Page. We look forward to showing you how global sourcing can increase your company's bottom line.

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