A large US-based Consumer Electronics Distributor, with annual revenues exceeding $140 million, faced significant challenges impacting their competitiveness.
The Problem
The distributor identified two major issues:
- Margin erosion on national branded Signal Distribution equipment.
- Supply continuity with power amplifiers.
They were receiving weekly complaints due to out-of-stock products and faced difficulties in providing competitive pricing. They believed that establishing a direct channel to an Asian manufacturer could potentially resolve both issues. Despite their size, the company lacked the resources in Asia and the internal expertise to manage and qualify Asia-based factories.
The Solution and Results
They contacted SureSource, leveraging our extensive experience in the audio/video sector. After initial meetings, we embarked on a project to locate and qualify factories for the required high volumes of both product types.
Signal Distribution – Cost Savings
- Factory Identification: Using our connections, SureSource identified a factory already producing the national branded signal distribution products.
- Vendor Qualification: After multiple meetings with the factory ownership and staff and a factory audit, the vendor was qualified. Our customer was kept informed throughout the process.
- Product Development: Worked closely with the customer to ensure specifications, industrial design, and packaging met their branding needs for all 8 designs.
- Regulatory Compliance: Collaborated with US regulatory agencies to ensure compliance.
- Project Management: A dedicated Project Manager coordinated the process, ensuring attention to detail and efficient communication, especially challenging with a very short development cycle. Having our own resources in the U.S. expedited the final product approval as we worked with our customer during their regular working hours.
- Logistics and Quality Assurance: Managed shipment logistics and our Quality Control team performed quality inspections and provided outgoing quality reports before shipments left the factory. We also worked with U.S. regulatory agencies to ensure compliance.
Results:
- Within 6 months, the initial Purchase Orders were shipped to our customer’s warehouses.
- Achieved a 55% cost savings, amounting to $786K annually.
Power Amplifiers – Supply Continuity
While SureSource was working with one factory on the signal distribution product, the Power Amplifier project was managed by another Program Manager.
- Factory Qualification: Identified a compliant factory with sufficient capacity to meet annual volumes of 2/8/12 Channel Amplifiers. Our Production Team visited the factory to verify their production capabilities.
- Sample Testing: SureSource shared specifications on an array of amplifiers currently being manufactured by the factory. Our customer identified the three models that met their technical requirements. Initial samples were then sent to our customer for testing and approval.
- Product Development: Assigned a Design and Quality Engineer to work with the factory on three new amplifier SKUs. Samples were provided to our customer for approval.
- Regulatory Compliance: SureSource worked with U.S. regulatory agencies to ensure compliance.
- Project Management: Provided a single point of contact for the customer through a dedicated Project Manager using email and weekly project calls.
Results:
- New SKUs were delivered within 6 months to the customer’s warehouses, eliminating supply outages.
- Achieved an additional $105K in annual cost reductions that was passed on to the customer.
Conclusion
SureSource’s expertise and strategic approach enabled the distributor to overcome significant margin and supply chain challenges, resulting in substantial cost savings and enhanced supply reliability. Through effective project management and collaboration, SureSource delivered tailored solutions that met the distributor’s needs and improved their competitive position.
SureSource: Your Safe Pair of Hands in Asia.
