High Tech

3 ways high-tech companies are lowering costs


A little digging can deliver big monetary rewards.

Let's be honest: Companies are in business to earn healthy returns, which are directly linked to their management of resources. Leaner operating costs result in more cash to invest in long- and short-term objectives. Finding savings, however, isn't a game of Marco Polo – savings don't call back to you.

See how high-tech companies saved big money after examining their supply chains. Could the same work for you?

A good place to look? Your supply chain. Here are a few high-tech companies that did look – and saved big. Could the same work for you?

Manage transportation spending: In an ideal world, shipping would consist of sending the same size package for the same price. It doesn't work like that and, amid the uncertainty, slip-ups happen, the wrong service is selected, and dollars are wasted. Elburn, Ill.-based Monitor Tech, which manufactures systems that monitor levels in silos and bins, found that entrusting one company, UPS, with all its shipping needs led to immediate savings.

"For the first year, we were hoping to save at least $10,000, but we ended up saving over $13,000," says Heather Russell, Monitor Tech's office manager and training specialist. Switching to the WorldShip® shipping system was huge. Monitor Tech could view all its options for both small-package and freight shipments. The move also sped up the process of creating shipments while providing important visibility for inbound and outbound shipments – all of which saved valuable time resources.

"It's easier on the shipping floor because we can quote faster and process faster," says Russell.

Increase productivity/staffing efficiency: VIVO Technology, an online supplier of laptop parts, faced a nice problem a few years ago: Orders grew so quickly that warehouse space became a problem. Instead of spending time and money on finding new digs, VIVO wanted to explore optimizing what it already had.

That's when CEO Chance Knapp, who started the Goodfield, Ill.-based company in 2003 as a 17-year-old, asked UPS for help. An on-site analysis resulted in 14 pages of recommendations that VIVO effectively adopted. Bottom-line savings not only slashed overhead costs, VIVO was soon expanding overseas opportunities.

"UPS gave us smart consultation and good advice for growth, and they helped us get the pure cost savings, too," Knapp says. "We got the best of both worlds."

With so much of its inventory coming from abroad, VIVO also took advantage of UPS's Flex® Global View tracking technology, providing 24/7 visibility of ocean freight. This allowed the company to better manage staffing needs for inbound shipments.

Consolidate shipments: As a company that manufactures specialized circuit boards, Epec relies on speed-to-market efficiency for a competitive advantage. With suppliers situated across Asia, Epec depended on a trouble-free – and rapid – inbound logistical service. UPS Worldwide Express® matched Epec's tight time frames: Parts ordered on a Friday from Asia would arrive by Monday morning in New Bedford, Mass., and then be sent to Epec customers the following day.

While this kept its customer-service-oriented approach firmly on course, Epec and UPS devised a plan to slash its inbound costs. The solution: consolidated import shipments.

A UPS team in Asia arranged multiple daily pickup times at 15 facilities in China, Taiwan and Thailand in order to group shipment orders. The result: "Instead of 35 different shipments, we might only have one," says Kendall Paradise, Epec's president. "That's allowed us to save at least 15 percent on shipping."

How have you helped your company reduce operating costs? Share your story with other readers here.


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