Valve Redesign & VMI Implementation

Part Redesign and VMI Implementation Yields a Total Cost Savings of $5,760

Challenge

A customer came to the Field team in a panic. A line had gone down due to a part shortage from another supplier, and they needed additional inventory ASAP. Field was able to source this special part within hours, and the lines were back up and running that afternoon. But that was just the start.

The next day, the Field experts lead the customer through a 'Form, Fit and Function' review of the part and immediately identified a cost-saving opportunity.

Solution

The customer was using a standard M6 Socket Button Head with the head diameter shaved to provide the required clearance in a valve assembly. This part was assembled into a mechanical lock nut by the assembler prior to installation. Overall, this shaving operation led to high costs related to procurement of the components and the assembly time.

The Field team redesigned the part with a smaller head diameter, which dramatically reduced the cost of the part by eliminating the shaving operation completely. To streamline procurement and balance inventories, Field supplied the bolt and nut as an assembly in a custom VMI (Vendor Managed Inventory) system.

Results

All recommendations were quickly adopted by our customer, yielding cost savings. And thanks to the implementation of the custom VMI system, they always have ample inventory on hand:

  • 40% Reduction of Piece Price Yielding $4,210 in Savings
  • Elimination of Assembly Processes: $800
  • Procurement and Inventory Reduction: $750
  • Total Cost Savings with Field: $5,760