Using a third party specialists to source hard to find ‘widgets’
The item on the left seems like a pretty straightforward thing to source but the challenge in getting it 100% correct from a specification and quality perspective plus getting it on time led a Pharmaceutical company to use a procurement specialist service to source the medicine bottle-caps shown here. These services are proving ever more useful in sourcing "hard to find items" in a short space of time.
In the case at hand, a very specific item was ordered that was highly relevant to the client’s ‘direct’ procurement spend. Procurement Zone was approached by a leading pharmaceutical company to source, develop and produce a plastic molded medicine cap that would be able to fit both a specific 20ml as well as a 50ml plastic bottle.
The sourcing process included:
- After carefully analysing the brief from the client, Procurement Zone (the third party sourcing specialist) decided to modify the existing cap so that it could double up to fit both bottle sizes. As the bottle necks (a 20ml and a 50ml) were of a different diameter and, to save the costs involved in producing 2 moulds, they adapted the sample so that the finished product could fit both the 2 different diameter necks.
- To reduce tooling costs the number of chambers required to fulfil the client’s monthly order had to be taken into account. The tooling costs normally range between R 25000 and R 35000 per item and therefore, by consolidating the 2 diameters into one single cap, the sourcing specialist brought about a substantial saving. In addition, a production savings on the bottles followed: –
- The number of chambers affects the number of units produced per 15 second cycle; so, by spending more on additional chambers, this step led to a decrease in the production time on each order placed.
3. Finally, in designing a single cap instead of two, the client also achieved greater production efficiencies.
In applying procurement ‘best practice’ Procurement Zone ensured that the final product made the client happy:
- On time: This was a simple calculation as the cycle time is relative to the number of chambers, therefore by running the machine for x hours per day the client knew how long each order would take (until power outages came along!!).
- Correct quality: Samples were analysed by the client themselves for correct millilitre calibration and general consistencies.
- Right price: The outsourced 3rd party procurement specialist, by adopting an innovative, practical approach to the project, put sufficient savings and efficiencies on the table to ensure that the client was extremely satisfied with the final outcome.