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DTx Saves Medical Device OEM $223,000
DTx helps medical OEM save $223,000 in inventory costs, reduce engineering time, and lower the cost of program maintenance.
DTx Challenge: One of DTx’s customers, a global top ten medical device OEM, found itself facing a major field supply crisis when manufacturers of two main components, the motherboard and CPU, simultaneously announced the End of Life of their products.
With a reduced engineering staff, the OEM was unable to make any changes to their product in the short term. Although inventory support was required for at least three years before the next iteration of the product would be ready, the CPU manufacturer would only provide inventory support for one year. The motherboard manufacturer would provide support for two years—but at a cost that would increase the cost of the platform by 28%. The warranties for both products would also expire after 12 months, exposing the OEM to unacceptable risk at unacceptable terms.
DTx Solution: DTx Program Manager Joe Kenny immediately contacted the suppliers to discuss terms, conditions, and pricing. A Value Analysis/Value Engineering workshop with the customer nailed down specifications for the motherboard, and DTx identified three potential replacements for customer review, including one provided by its current supplier. But after successfully negotiating warranty extensions, DTx found the motherboard manufacturer unwilling to reduce the inventory carrying costs.
DTx‘s solution was to manage all transactions for both components and, most importantly, carry the inventory at extremely favorable terms for the customer. “Change is not an option for our customers in the military, medical, and security industries,” said Joe Kenny. “We use our expertise in project and inventory management as well as engineering services to create a support structure that allows customers to focus on their own core competencies.”
DTx Results: DTx will manage all of the inventory management transactions, significantly reducing associated program maintenance time and cost. As a committed partner, DTx will also provide technical support in choosing new components for the next iteration, saving the OEM substantial engineering time. In addition, DTx’s complete program of management services will ensure the seamless transition to a new product at the end of the specified term. Finally, protected with essential inventory support for the full three years they require, the OEM will realize a savings of more than $223,000 in inventory costs.
Results
“ DTx does an extremely good job of handling obsolescence issues. It is the reason why they continue to win new business from us.”
For more information, contact:
Katherine C. Hartman
Director of Sales and
Marketing Administration
DTx Inc.
1800 Penn Street
Melbourne, FL 32901
Tel: 321.821.7031
Fax: 321.733.0017
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