Leveraging Competitive Bidding to Find the Best Price

In manufacturing, you need to have the right materials at the right time. When a customer found themselves struggling to maintain their supply of drums for scrap material, it caused major disruptions in production. To make matters worse, they were paying a premium price for these drums when a cheaper alternative was available. Martin Integrated Supply was brought in to streamline the process, resulting in significant cost savings and improved operational efficiency.

The customer relied on large drums to handle scrap material, but they constantly struggled with maintaining the right amount in stock. This inconsistency led to frequent production stoppages, creating a ripple effect that brought down overall efficiency. Additionally, the customer was paying high prices for these drums, adding financial strain to the operational challenges. The manufacturer approached Martin to find a solution that could help them efficiently handle that scrap metal without halting production.

Martin’s team began looking for a solution by evaluating the customer’s site. They observed where and how the drums were used, then spoke directly with the workers who handled the drums daily to get a clear understanding of the actual requirements. Based on those conversations, Martin determined the optimal quantity of drums needed to avoid both shortages and excess inventory. Martin opened the procurement process to multiple suppliers, inviting them to bid on the sale, delivery, and pick-up of the drums. This competitive approach ensured the best price and service quality. A blanket PO was eventually issued for 50 drums to be delivered every two weeks. This arrangement provided a steady supply, reducing the risk of stock-outs and streamlining the ordering process.

The results of this strategic intervention were significant and immediate. With a reliable delivery schedule in place, the customer no longer experienced shortages of drums. This consistency ensured smooth production operations. A process was established for the machine shop to request additional drums if needed, ensuring flexibility without disrupting the supply chain. By securing a better price through competitive bidding, Martin Integrated Supply saved the customer $22 per drum. Over the course of a year, this resulted in a total savings of $30,466.

This example highlights how Martin went beyond traditional stockroom duties to solve a critical supply issue for their customer. By understanding the customer’s needs, optimizing procurement processes, and leveraging competitive bidding, Martin delivered a solution that improved operational efficiency and achieved substantial cost savings. This success story underscores the value of innovative thinking and proactive partnership in addressing complex supply chain challenges. To learn how Martin can help you, contact your Martin Sales Rep or call 800.828.8116.