The Challenge

A Surface Logic customer was struggling with purchasing dining room chairs that met the strict requirements for use in senior housing. They conducted a request for proposal (RFP) on the chairs through their centralized purchasing group and had arrived at the best price they could negotiate with a 14- to 16-week lead time. Feeling that their customers were being negatively affected by the high costs and lead time, they enlisted Surface Logic’s expertise. We were challenged with reducing the cost-per-unit without sacrificing quality and improving delivery time from 16 weeks to four weeks on 3,000 of these chairs purchased annually.

The Solution

Surface Logic took a two step approach in meeting this challenge. First we conducted an RFP following the traditional industry model but based it on our industry buying leverage with traditional roll up manufacturers which included pricing and delivery expectations. This method yielded a 23% savings from our customers best negotiated price.

Secondly, we conducted an RFP utilizing Surface Logic’s unique component pricing strategy. By applying our expertise and leveraging the component supply chain we were able to create a 35% total savings for our customer. Through the partnering approach created by this model and the removal of interim processes in the manufacturing chain we were also able to meet the very aggressive delivery requirements not being met in the traditional model.

The Results

By utilizing Surface Logic’s unique component pricing strategy our customer now saves $450,000 annually on this type of chair. In addition, we were able to greatly reduce the internal cost of tracking these purchases and enhance the facility’s marketability by reducing lead time by 75%.