CUSTOMER ADDED VALUE

DIRECT IMPACT ON PROFITABILITY

​

1 FOB Price Savings

• Price negotiation based on market conditions, cost driver analysis and benchmarking results

• Demand bundling

• Alternative sourcing

​

2 Cost Avoidance

• Refused price increases

• Negotiations against general inflation

• Covering of other costs (e.g. testing fee)

​

3 Customs/Tariffs Reduction

• Lower customs caused by lower FOB prices

• Tariff reduction because of sourcing “Out of China”

• Relocation of parts of the value chain e.g. packing in the target market

​

4 Freight Reduction

• Freight consolidation

• Avoidance/reduction of LCL shipments and airfreight

• Lower freight as a result of relocations

​

5 Substitution/Optimization of Specification

• Revision of tolerances

• Variant management/ complexity reduction

• Alternative materials

​

6 Working Capital Improvements

• Lower Working Capital coming out of  1) - 5)

• Lower MOQs/MOVs

• Extended payment terms

​

 

SUPPORTS CUSTOMER'S TOP LINE GROWTH

​

7 Quality Complaint Reduction

• REJS product inspection approach (pre-shipment inspection)

• Development of suppliers

• Negotiation of compensations from supplier

​

8 Compliance with Regulations (CSR)

• Main criteria for supplier selection

• Regular on-site CSR audits

• Documentation of audit results and follow-up on corrective actions

​

9 Speed-To-Market

• Quick reaction time and physical on-site presence

• Short product- development/-modification cycles

• In-house photo and design services (artwork development)

​

10 On-Time Delivery

• Regular and standardized tracking of on-time in-full delivery performance

• Main criteria for supplier evaluation and supplier management

• Avoiding single sourcing to have alternatives in case of capacity issues

​

11 Lead Time Reduction

• Ensuring high priority in manufacturers’ production schedule

• Close alignment of production, inspection and logistics schedule

• Considering customer’s demand forecast