It always comes back to cost

Old Zeb recently asked me to write a series of blogs on supply chain management. I had a little writer’s block at first—where to start? After pondering this for a while, I thought, what do people care about? Several things came to mind instantly, but ultimately it always came back to cost. Everyone selling a widget has to know what the cost of their widget is in order to find the right market. In order to determine whether or not it makes sense to even produce the widget. In order to make money, which is after all, the essence of business. So this blog is about cost.BOM) for the client. More often than not, after creating the BOM, the actual costs to create their product are never quite what they anticipated. The BOM is usually going to be higher than they expected, at first, and then we work it.

We live and breathe cost reduction. We go after the big numbers, and we also go after the millicents. This is where we work our magic.

Zebulon Solutions’ goal is not only to find the best part at the best price, but to do it without sacrificing quality. Really, it’s to make sure it logistically fits for the client. To simply go for the cheapest route possible on every part needed to build the widget is rarely the best route. For every part necessary for the assembly, we try to locate multiple suppliers. We determine the best fit based on volumes and logistics and show our clients in a revised BOM the actual cost difference we worked out for them. This of course takes into account the assumed build location, labor, burden, logistics, tariffs / taxes and margin costs. This is what is called the total landed cost. We even break it out for them at various volume (quantity per month or year or buy) levels. The more you buy, the cheaper it can be to build.

Once the client has this indispensable information, the next logical step is for us is to help them find a Contract Manufacturer to build their widget. Hey, I think I have my next supply chain blog topic.

Teresa

 

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