Are You Paying Too Much For Inventory?
We analyze your cost of goods to see if you are paying too much.
How Do We Get Such Low Prices:
First Principle Thinking: Our approach is similar to how Elon Musk significantly reduced the cost of building both a rocket and an electric car battery. This means boiling your assembly down to the most fundamental truths and then reasoning up from there. Through this process, we understand that the path any product’s raw materials took to ultimately become the finished product you see is where the bulk of the cost is.
Your assembly is likely composed of more than one material and more than one manufacturing process. It’s important to understand that factories generally specialize in one or two specific manufacturing processes. Everything else they likely just find any local factory to make for them before they assemble it all together. Factories are notoriously bad and finding low cost suppliers to provide them with the components they don’t make in house. By finding the best possible suppliers for your suppliers, we can have a significant impact on your assembly cost.
Normal Distribution: There are roughly 11 million manufacturers in the world. If you are only getting quotes from 5 or 10 of them, you are likely paying 40-50% more than you should be. That’s just statistics.
The more quotes you get, the more quotes to plot on a Gaussian Curve (Bell Curve). This essentially makes the bell wider with a lot more low cost quotes to chose from. Of course just choosing the lowest quote is a terrible idea. However, having a lot of choices significantly increases the chance of finding quality Suppliers who are simply more efficient at what they do.
This is how we find prices in the 2nd if not 3rd Standard deviation, while still maintaining the quality you need.
Combine this along with the Component level First Principles Thinking, and you have yourself a healthy competitive advantage in your Supply Chain. Often lower than even Chinese knock-offs can compete with.
Software: It’s normally cost prohibitive to put so much effort into getting so many quotes. No other agent is going to do that. Your own team likely isn’t going to do that.
But that’s exactly why we developed our own Sourcing Management Software. (Navanty.com). It’s built to make it more efficient for us to get a high number of quotes in a short amount of time. It also collects blind comparative quote data on on every Supplier that anyone enters their quote into the system. This allows us to continue to identify the lowest cost suppliers in the world for any manufacturing process.
Navanty software is a true competitive advantage. And we give you access to watch our progress in real time with complete transparency.
Ongoing: But we don’t stop there. We do our best to align our interest with yours, more than any other Agent can. As a result, it becomes our best interest to be sure you always have the lowest Supply Chain cost.
For this reason, we periodically review our prices to see if we still have the lowest. Your competitors are coming for you, don’t let them catch up.
Credit Terms: We also work to get Credit Terms out of even foreign Suppliers. We know that cash flow is critical for a growing business. But if they can’t agree to our terms, we can sometimes step in and offer Supply Chain financing at no cost to you.
This as proven to be a very effective way of helping our Clients grow faster.
info [at] partdistribution.com