A leading manufacturer in Australia had been utilizing a particular “industrial valve” supplier historically and prices had been steadily increasing year on year. This valve was utilized in a specific application for their customers and there was a hesitation to make any form of change to this arrangement. However, the economics of the situation was resulting in the supplier losing margin and with customers trying to reduce price, the manufacturer was at risk of losing the business.
- To support the client, we reviewed the valve specifications and its application for the end customer.
- We then, completed a market research that enabled us to identify similar applications in different industries
- Through this research we identified key manufacturers of a valve similar to the one used by the manufacturer
- Through further conversations, we were able to identify opportunities to reduce cost by moving the manufacturing of the valve to a purpose built facility in Asia and
- At the same time modifying the product further to ensure it met the stringent specifications and peformance standards
- Through this activity, The client now had 2 additional options as opposed to the incumbent to engage with and conduct trials
- With the new sources in place, the pricing was 10% lower than the incumbent