Working Capital Managment

July 26, 2010

Opportunity: An automotive stamping plant in Ohio needed replacement parts for a variety of equipment. Purchasing these items from OEMs was expensive and often involved long lead times.

WESCO Solution: Rather than purchase replacement parts from OEMs, WESCO found other manufacturers of equivalent parts at a lower cost. For example, WESCO found a local manufacturer to produce computer cables for which the OEM charges $134 each. The locally made cables cost only $21.40 to $33 each, depending on type, and have proven to last two to three times as long. With prior usage at 25 of each type per year, the new cables will save $5,340 annually. In a similar example, OEMs were charging $350 and $400 each for backlights. WESCO found other sources to manufacture the backlights for $50 and $75 each — and reduce lead time from 16 weeks to one week. The new backlights also offer brighter light output. The customer purchased 25 of the $50 units and 40 of the $75 units, realizing a savings of $17,250.

Result: $22,590 Savings — with Faster Turnaround and Better Quality!

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