Cost-Effective Legacy Support
A long-standing Reliance customer wanted to develop a commercially effective support package for one of its legacy products. Reliance had supplied the company with sub-assemblies for the product line for over 15 years. Routine commercial reviews highlighted that production quantities were now much reduced from when the product was at its peak and it was expected that operational costs would continue to rise. By working together, sharing both companies’ operational information concerning product forecasts and historical production data, a Service Package Proposal was developed.
The company identified essential price points and lead times, which were necessary to keep the product commercially viable. To meet these requirements, Reliance established an ongoing manufacturing schedule for the critical component parts and held stocks of these, together with third-party items, in readiness for fast turnround assembly work against orders. An annual quantity agreement, with authorisation to part-manufacture, secured a working framework.
The company was then able to place orders at any time, via email, based on a straightforward price list, with agreed quantities and delivery dates. The underlying commercial and operational framework ensured that extremely fast turnround times were achieved, from order to delivery, compared to placing standalone ad-hoc orders for manufacture from scratch; furthermore, the schedule could be moved back and forth to meet changing demand. The flexibility of Reliance’s in-house IT system enabled the company to have a service package tailored to its operational requirements, rather than having to take deliveries in line with its supplier’s build programme. All delivered assemblies were fully tested to the company’s specification and delivered in bespoke packaging, ready for onward shipment. As a result of Reliance’s commitment to long-term customer relationships and proactive planning, the company has a cost-effective source of supply for a legacy product, with an easy-to-manage ordering system and a product delivered ready for use.