Case Study Details

Source Asia Saves North American Manufacturer Over 50% in Tooling and Component Costs by Managing the Outsourcing of a Custom-Engineered, Injection-Molded Plastic Component to Asia.

         The Opportunity    •   The Solution   •   Why Source Asia?

Asia Industrial Sourcing/Program Management Opportunity

A North American industrial manufacturer (the “Company”) of metal-based linear motion and access solutions sought a solution for sourcing a custom-engineered, injection-molded plastic component at low cost from Asia.  Having researched costs from local, North American manufacturers of plastics, the Company was convinced that outsourcing the tooling development and high-volume production of the plastic component from Asia would produce substantial cost savings at equivalent – or even superior – quality.  With substantially lower plastic component costs, the Company could improve its own cost competitiveness for its end-product that incorporated the plastic component – gaining its own competitive edge in its marketplace with its most important asset: its customers.

With very limited experience in identifying, qualifying, and managing Asian sources, and no time to do it themselves, the Company sought a comprehensive Program Management solution from a North American business partner that could instantaneously provide them with all of the benefits available by outsourcing to Asia.  But not just any business partner.  Instead, a business partner that knows North American industrial manufacturing.  A business partner that is a North American industrial manufacturer of custom engineered components themselves and has a proven track record of successfully managing outsourcing of custom engineered products to Asia.  That’s when they called Source Asia.

The plastic component was engineered to completion by the Company prior to engaging Source Asia.  It even has numerous U.S. patents issued and pending on it.  When the Company sat down with Source Asia, the basic project parameters for the Asia sourcing project were laid out:

• Product: Custom engineered plastic component, to be made of Delrin® material

• New tooling required: Multiple-cavity, injection mold tooling

• Estimated monthly consumption: 20,000 – 30,000 pieces

• Expected life of the product: More than 5 years

• Indicators of success for the Company: Significantly reduced costs by outsourcing high-volume production to Asia, and superior tooling and product quality

Source Asia’s Program Management Solution

With the Company’s goals in mind, Source Asia sketched out a Program Management solution for outsourcing the tooling development and routine production of the custom-engineered plastic component to Asia.   

Product/Engineering  Design:	The Company completed the engineering design of its plastic component before engaging Source Asia.  Source Asia – using its own U.S. engineers and Asia procurement staff – coordinated the engineering communication (3-D models, drawings, etc.) with the selected Asian source during the tooling development and pre-production phases – assuring every engineering specification was adhered to: material, dimensions, functionality, etc.
Project Scoping:	The Company and Source Asia sat down together, allowing Source Asia to scope a Program Management solution for sourcing the injection-molded plastic component from Asia that addressed each of the Company’s needs – cost reduction, new tooling, routine production, and delivery.  Because the Company had researched costs for tooling and components in the U.S., they were quite pleased with the cost savings available by outsourcing to Asia with Source Asia.
Tooling:	Source Asia managed the engineering development, build-out, and proofing of the new injection molding tool needed for the Company’s  custom-engineered plastic component.  Using its own U.S. Engineers, Asian sourcing staff, and Asian business partners, a multiple-cavity injection mold tool was developed in Asia that optimized part production for even further cost savings.
Production/Quality Assurance:	Upon tooling try-out and first article verifications with the Company, Source Asia managed the Company’s production requirements in Asia of 20,000 – 30,000 pieces per month.  The Company was kept in the loop throughout the production process – making it seem as if the production was taking place in their own backyard.  Independent 3rd party quality assurance and in-house quality assurance at the Asian manufacturing site were used to verify part conformance to all dimensional, functional, and material specifications.
Logistics/Delivery:	Source Asia aligned the production, logistics, and delivery schedules with the Company’s delivery requirements – which were all identified early in the Project Scoping phase.  Source Asia secured the most cost effective freight rates and managed all import/export documentation, customs clearance, invoicing, etc. – making sourcing from Asia as easy as domestic sourcing – but at greatly reduced costs.
Repeat Order Placement:	Source Asia has been managing the sourcing of the Company’s custom engineered plastic component now for nearly 5 years.

Why Did the Company Work with Source Asia?

The Company sought quick access to the many benefits from Asia – such as significant cost savings and superior quality – to enhance their own North American manufacturing business.  Because Source Asia has its own North American industrial manufacturing, and a proven track record of success in sourcing custom engineered, industrial products from Asia, the Company looked to replicate this type of success for itself.

• Comprehensive, no-risk Program Management solution for industrial sourcing from Asia.  Source Asia was the Company’s locally accessible solution for instantaneously tapping into the many benefits available by outsourcing the production of their custom engineered plastic component to Asia – particularly significant cost savings. 

• Speed.  With a proven track record of success and in-house, U.S. engineering support, a sourcing staff in Asia, and a network of Asian business partners and suppliers, Source Asia was able to quickly align the Company’s needs with a Program Management solution – yielding cost savings that gave the Company a competitive edge in their marketplace.

• A guaranteed, low-cost Asia sourcing solution for the life of the product.  Source Asia continues to work with the Company for the sourcing of their custom engineered plastic components from Asia.  And it’s not just a one-time deal.  Source Asia partnered with the Company at the very first stage of the Asia sourcing project (tooling) – managing its development in Asia, and then all subsequent steps: routine production, quality assurance, logistics, delivery – for the very life of the product.