STRATEGIC SOURCING: Breaking dependence on a monopoly supplier and reducing costs by 30 %
One of the European manufacturers of transport platforms for the disabled had followed a strategy for many years where all key components were manufactured in-house. This approach had its advantages – the company had full control over quality and production processes. However, with growing demand and seasonal fluctuations, it turned out that internal capacities were not always sufficient. Production began to hit its limits – when a sudden surge in orders arrived, the company was unable to deliver and lost business opportunities.
What were the main problems?
Insufficient production capacity – with a larger volume of orders, it was not possible to increase production quickly.
Unwillingness to invest in new machinery – expanding production would have been too costly and risky.
Production bottlenecks – some parts were difficult to manufacture internally, but the company did not want to risk outsourcing them.
What did PARTORY do?
Identified less strategic components that were more advantageous to outsource.
Provided flexible production capacity – the company could decide what to produce internally and what to outsource based on current demand.
Reduced pressure on internal production – key capacities were freed up for more complex and higher-value products.
Maintained stable deliveries – we set up a system of regular deliveries and safety stock for crisis situations.
What was the impact?
The manufacturer of transport platforms thanks to this strategy:
Gained production flexibility, allowing them to respond better to peak demand.
Reduced manufacturing costs because they did not have to invest in expensive machinery.
Shortened lead times because they had stable external capacities at their disposal.
Outsourcing doesn’t have to mean a loss of control – on the contrary, if used correctly, it can help a company grow and better manage market fluctuations.