FDA-Approved Medical Devices Contract Assembler Reduces Packaging Inventory 70%, More Than Triples Annual Turns

Challenge

  • Strict specification standards for corrugated packaging for safe shipping
  • Mounting corrugated box inventory – staff not tracking turns, aged or obsolescence
  • Staff focused on planning and tactical functions versus competitive pricing
  • Long term packaging supplier
  • Limited client visibility to market pricing

Strategy

  • Visited facility to determine areas for improvement
  • Conducted express benchmark to establish savings potential
  • Issued RFP to eight qualified supplier participants including incumbent
  • Conducted detailed analysis of RFP responses
  • Negotiated final terms and vendor managed inventory program

Value Summary Results

  • Savings of 10% delivered with incumbent supplier
  • New pricing tied to liner board index
  • Reduced inventory on hand by 70% and increased annual turns from 2.5 to 8
  • Consistent pricing per unit with United Sourcing Alliance reviewing all new product pricing