Finished Product Sourcing

With the help of Insight Solutions Global, the client cut the spending and saved up to $120,000/year, reduced the lead time and gained more leverage in the supply chain.

About the client

Industry: Home appliance

Product: Milk frother

Company Size: Established medium size company

Location: New Zealand

Challenges

  • It took the client too long time to develop the customized milk frother product, therefore losing the market to Sunbeam EM0180, a competitor;  
  • Even with all the time invested, the customized milk frother was not cost-effective
  • The attempt to find an ideal ODM (original design manufacturing) factory via Google, Alibaba, Global Sources failed after months of trying; 
  • The attempt to find a right partner to work with by attending home appliance and other electronics & electrical exhibitions in both Europe and Asia also failed
  • Couldn’t get the cost break-down and key spare component suppliers’ information; 
  • Lacking leverage vis-à-vis price and quality control negotiation with manufacturers. 

How we helped

  • Communicated with the client on what had been done so as to avoid overlapping work
  • Identified the product specifications, functionalities and reliability, and the critical requirements of the sales market; 
  • Aligned with the client on the final decision-making matrix
  • Sourced a few renowned milk frother ODM factories
  • Conducted deep technical discussion with the selected manufacturers on manufacturing processes, quality control issues and cost drivers; 
  • Identified how interested the factories were to customize ODM products, and dug out their sales challenges in the European, New Zealand and Australia markets. 
Product sample on the market

Results

  • Identified the manufacturer for Sunbeam EM0180 and the potential strong backup manufacturers that shared similar capabilities and expertise; 
  • Identified key cost drivers
  • Drew up reasonable cost plan, lead time, quality assurance terms and conditions for the client; 
  • Saved more than US $120,000 a year; 
  • The lead time was reduced from 6 weeks to 2 weeks
  • Increased leverage in the supply chain by having backup ODM factories. 

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