OE supplier had a product line in the “decline” stage of its lifecycle as it brought a replacement product to market
Wanted to retain intellectual property and control of the customer relationship and pricing
Changes in Market Dynamics
Annual product sales for five valve product families totaling 1,200 top level assemblies declined to $4.5mm
Some customers not ready/willing to upgrade to new product line, taking up manufacturer’s resources to continue to service replacement parts
Manufacturer wanted to focus resources on accelerating sales of new product design
Program Economics
Reduced economies of scale
Floor space at a premium
Declined focus on optimizing inventory management and supply chain management due to dramatic reduction in demand
Engineers’ lack of interest in working on legacy technology
QCC Solution
QCC transitioned all manufacturing and supply chain management processes to its facility, including inventory and fixed assets, shipping directly to customers on manufacturer’s behalf
Manufacturer’s direct customer interface remained in place
QCC lowered program costs by optimizing manufacturing processes and supply chain management
Manufacturer’s resources and floor space were freed up to focus on design and conversion to new product line