Engineered Products (PPV & VAVE)
 

Engineered Products (PPV & VAVE)

Reduce Costs And Enhance Profitability Through Source One's Strategic Sourcing Services For Engineered Products

Reducing Cost of Goods Sold through Strategic Sourcing

Bridge the gap between Engineering and Sourcing to combat price volatility, uncover cost savings, and design sustainable products with Source One’s multidisciplinary direct spend sourcing services.

In today’s complex global market, manufacturers struggle to discern the best way to reduce or even just maintain their cost of goods sold (COGS). Simply put, the more hands that touch a product as it works its way through development, marketing, sales, engineering, and quality assurance, the more expensive that product becomes. Each of these departments can inadvertently add unmanaged costs and contribute to an over-engineered product that can’t sustain itself. And when a good supplier relationship is not established, companies miss out on opportunities to innovate and control costs at their point of origin. Without a sourcing representative involved in the entire product lifecycle, manufactured goods or services often have cost structures that can quickly spiral out of control – creating ripple effects throughout the company’s supply chain operations and damaging the bottom line.

Overcoming this challenge for engineered products requires an approach that goes beyond traditional spend analysis and bidding processes. That’s where Source One comes in, with multi-disciplinary collaboration and problem solving techniques backed by decades of industry and market intelligence. Where internal resources are constrained, Source One’s on-demand experts ramp up quickly to enhance innovation and mitigate risk. Our Engineered Products and Direct Spend experts know how to navigate complex product lifecycles and have helped dozens of industry leaders phase in lower cost materials and execute design changes with minimal disruption to production and sales activities. With our skills in supplier management, we can show you how to engage your critical suppliers and leverage their market expertise to reveal innovations and cost savings.

Reducing costs and securing supply chain operations for engineered products and direct spend requires a focus on key controllable elements:

  • Fundamental product and component design
  • Supplier identification and qualification
  • Manufacturing processes
  • Logistics (inbound and outbound)

We start by assembling a cross-functional team that not only ensures sponsorship and buy-in but also establishes a common ground between traditionally siloed organizations:

  • Sourcing and Procurement
  • Finance
  • Engineering
  • Product Managers
  • Sales Force

Utilizing industry-proven techniques such as purchase price variance (PPV) analysis and value analysis/value engineering (VA/VE), Source One’s engineered products and direct spend management services bring out the best in your procurement organization along with the best in your engineering department.

Source One understands that PPV can be caused by a number of reasons including misaligned FIFO or LIFO accounting practices, inadequate demand forecasting, and inaccurate volume assumptions. Using PPV, our Engineered Products and Direct Spend experts identify commodity price deviations from an established tolerance – and thus target those areas for remediation.

Through VA/VE, our commodity price volatility management experts help you identify opportunities to improve product quality and strengthen relationships with key suppliers. Implemented with a structured approach, VA/VE focuses on the primary and secondary functions of each component (required vs. aesthetic vs. extraneous) for a given product. Using VA/VE, our engineered product experts help you find opportunities to remove unnecessary components, substitute more cost-effective or secure elements, establish tighter standards, improve reproducibility, and enhance quality and therefore end user satisfaction.

Don’t spend any more time wondering if there’s untapped value within your product lines. Contact our direct spend and engineered products experts to learn more about how we can help your company.

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Industry-leading Spend Management Services

Direct Materials

Across any industry, Source One has the proven processes, tools, and technologies to help your company manage its supply base for direct materials, goods, and services. Through custom benchmarking, cost modeling, logistics management, supplier identification and qualification, and even low-cost country sourcing, Source One has the expertise to help you with any direct spend engagement.

Cost Reduction for Direct Materials


For the Pharmaceutical Industry
The Pharmaceutical market is in a constant state of flux as new drugs and therapies emerge, patents expire, and insurance models transform. Sustainable profitability requires a well-rounded approach to innovation, strategic sourcing, and supplier management. Source One continues to be recognized as a provider of advanced supply chain solutions for industry-leading pharmaceutical companies.

Cost Reduction in the Pharmaceutical Industry


For the Medical Devices Industry

Like the pharmaceutical industry, medical device manufacturers face tight regulatory scrutiny and global pressures including currency exchanges, taxation, and growing competition from foreign nations. Maintaining high levels of quality and brand prestige become difficult when competing with lower-cost, less sophisticated solutions. Let Source One bring together your engineering, manufacturing, sourcing, and sales teams to manage these complex product lifecycles and continue delivering life-saving products.

Cost Reduction in the Medical Devices Industry


For the Consumer Packaged Goods Industry
Brand loyalty, new product lines, and emerging market expansion continue to be top priorities for the consumer packaged goods (CPG) industry. Balancing these strategic initiatives with securing the best pricing and services for materials, manufacturing, packaging, and marketing is easier said than done. That’s why CPG leaders turn to Source One’s cross-functional, multi-disciplinary sourcing experts. Find out more about how you can use our decades of experience to refocus on product innovation.

Cost Reduction in the CPG Industry