Press Release:

Alliance Cost Containment Saves $520,000+ for Established Forging Company

by Max Friar, Business Development Director, Alliance Cost Containment

Alliance Cost Containment recently completed an engagement with a $100 million tier one automotive forging manufacturer which has been experiencing significant pressures on profit margins from steel surcharges and a client base demanding price concessions. This manufacturer, with three facilities in the U.S., engaged us to examine seven major expense areas: telecommunications, hazardous waste removal, janitorial/safety supplies, fasteners, metal shot powder, freight, and other MRO (forms, printed materials, office supplies, etc). Across all three facilities, the annual spend in these areas approximated $2.5 million, and crossed 170 suppliers.

The recently hired Corporate Controller, as well as the experienced Chief Financial Officer both noted their major focus in two areas: minimizing the impact of steel pricing, and managing customer relationships demanding productivity in such an inflationary environment. While a bit skeptical at the outset, Executive Management was impressed by the immediate and material results. The Corporate Controller noted “I don’t know why all Companies, particularly in manufacturing, would not consider this gain-sharing approach, as they have nothing but upside potential.”

The results revealed that the dedicated focus, benchmarking, consolidation, and leveraged pricing programs could not be achieved internally without ACC’s involvement. Fasteners were reduced $157K (46%), Hazardous Waste Removal was reduced $131K (42%), MRO was reduced $101K (averaging 16%), Janitorial and Safety was reduced $67K (31%), Metal Shot Powder was reduced $22K (18%), freight was reduced $20K (averaging 26%), and telecommunications was reduced $10K (25%). In addition, a significant reduction in the number of suppliers has also lowered administrative costs, and the continued monitoring ACC has performed has kept internal staff working on other major priorities.

About Alliance Cost Containment:
Alliance Cost Containment is a national expense-reduction advisory firm. With over 40 offices spanning North America, ACC's purchasing aggregation and vendor-management processes provide small and mid-sized business access to the kind of large corporate purchasing power they are often unable to capture on their own. ACC also facilitates detailed vendor management and reporting processes to make sure our clients capture the savings that we help generate. Established in 1992, ACC has served over 700 clients nationwide.

Contact ACC here.

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