Strategic Sourcing For a Filtration Products Company Focusing on New Growth Markets in Asia
The Challenge
Facing increasing cost pressures from suppliers and competitors, FSI needed to find a way to stabilize margins on their existing product lines without compromising on quality. The market for filtration products is highly competitive, and rising input costs were threatening their profitability. Without a cost-effective sourcing solution, FSI risked eroding margins and potentially losing market share.
Potential Consequences if Unresolved:
If the issue remained unresolved, FSI would continue to face shrinking margins on their legacy products, putting their overall profitability at risk. This could hinder their ability to invest in innovation and growth, while potentially losing their competitive edge in a crowded market.
The Solution
GetAhead worked closely with FSI’s team to conduct a comparative market analysis aimed at identifying new suppliers capable of offering better pricing without sacrificing the quality that FSI is known for. The process involved:
GetAhead’s Solution for FSI involved:
1. Strategic Sourcing in India and Thailand: By focusing on emerging markets, we were able to find suppliers that offered significant cost advantages over domestic options.
2. Negotiating Better Terms: We used our industry expertise to secure favorable pricing and terms, helping FSI stabilize margins without compromising their high standards.
3. Supplier Management: GetAhead ensured ongoing supplier management with regular check-ins and on-site visits, ensuring quality control and adherence to timelines.
Results
28% Cost Savings: By sourcing from India and Thailand, GetAhead helped FSI achieve a 28% net savings on legacy product costs, directly impacting their bottom line.
Stabilized Margins: These savings allowed FSI to stabilize their margins in a highly competitive market, providing them with the financial stability to reinvest in other areas of their business.
