Sun Microstamping Technologies (SMT) is a Florida-based customized tool and stamping manufacturer with annual revenues of around $35 million. Among the several industries SMT serves are the telecommunication, electronics and medical markets, where the company’s products are used in cell phones, PC games and drug delivery.
SMT company owners brought in CFO Michael Shirley to ensure profitability in an industry with razor thin margins. After taking several steps to reduce expenses, Shirley believed the company would benefit from Expense Reduction Analysts (ERA) specialized industry knowledge and benchmarking data.
Shirley met consultants and learned that ERA's business model is a contingency-based consultancy. He immediately saw the value in the "No savings, no fee" approach as a win from the beginning. SMT would either have its expenses validated as "best in class" -- or ERA would develop such pricing for the company.
Analysts concluded that several SMT expense categories were indeed competitively priced. The total fee billed for the consultants' analysis and validation of SMT's current business practices was $0.
However, ERA's evaluation for expenses in LTL Freight and Small Package Freight showed the current agreements could likely be improved. The same held true for Waste Management. Through detailed analysis and benchmarking, ERA reduced SMT's expenses in these categories by more than $150,000 annually.
Shirley was pleased with the result of the ERA process and with consultants' role in implementing the new Small Package Freight supplier's services.
"I feel very confident ERA is with me for 18 months . . . to ensure that we are getting the best value for our dollar ≠ and above all, that our operations continue without a hitch," said Shirley.
Industry: Manufacturing
Category and Savings:
- TLT Freight - 33%
- Small Package Freight - 28%
- Waste management - 37%
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