When a supplier offered Company X a lower price on its preferred metal, Company X jumped at the cost-saving opportunity. Pretty soon it learned, however, that “price savings” and “cost savings” aren’t synonymous.
For instance, the cheaper product was also a lower grade, which ultimately led to an influx of product defects. This, in turn, created costly production delays. And because Company X was required to buy directly from a single supplier to reap its dramatic cost-per-sheet savings, it had to fill a minimum bulk order. Not only did the order far exceed the company’s needs, but because the supplier only offered one product, it was stuck with that large order even after quality became an issue.
The new arrangement gave way to a host of other expensive obstacles as well—from delivery delays to storage rental requirements. As these costs started adding up, it didn’t take long to exceed the material price savings that attracted Company X to the arrangement in the first place.
Unfortunately, this scenario is very common and completely avoidable. If Company X had opted to go with a Service Center that acted as a business partner, rather than a transaction-focused supplier, the entire situation could have played out much differently. Here’s how a Service Center’s experts would have supported Company X through the material purchasing process:
The right material choice
Determining your material needs can be challenging for the average manufacturer. An experienced Service Center can bridge these knowledge gaps by recommending appropriate lower-price grade substitutes, suggesting stronger materials or identifying when it makes sense to choose extrusion over machining.
Flag hidden costs
Low-price materials can all-too-often lead to greater costs down the road, which is why the material price tag shouldn’t be the only variable used when building budgets. A reputable Service Center can help you obtain a clear view of your entire supply chain—and identify waste throughout. With a firm understanding of your needs and goals, these experts can help you maximize cost efficiency by advising you on what type of material to buy, when to buy it and in what quantities.
A greater selection
A reputable Service Center works with a wide variety of metal mills, allowing it to offer a broad spectrum of products. Not only does this remove the need for massive bulk orders, but it mitigates the risk of delivery delays as well. If your usual plant shuts down for some reason—whether it’s a local natural disaster or a global pandemic—a Service Center can help you swiftly find another source before a delivery is missed.
Ask for help
Few manufacturers would consider “metal sourcing” to be one of their specialities. Having a trusted and experienced Service Center to guide you through the process not only allows you to choose the right products and processes with confidence, but it can also save you many costly mistakes down the road.
To learn about how Samuel can help your company purchase metal more cost-efficiently, contact us.