ES&M help Achieve Cost Savings ca. 34% Negotiate Favourable Payment Terms All During Covid-19 Travel Restrictions

Background

Having been approached to participate in a project for MS-RT, the design-led automotive engineering company known for creating bespoke custom vehicles, ES&M was employed to develop the company’s supply chain and manage the production of injection mould tooling for the MS-RT Ford Transit Van. The work included laying the foundation for future projects, such as the new MS-RT Ford Ranger, (launched Jan 2021), as well as enabling the client to offer a similar customisation service to other global automotive players.

The MS-RT’s Transit conversion includes a full front bumper and grill replacement with integrated factory fog lamps, extreme front diffuser, wide body arch extensions, sills, rear diffuser and rear spoiler, in total 22 tools (including over mould tools) and 40 parts.

The Scope

• Helped client undertake supplier sourcing & verification for a new China supply Chain.
• Review quotation and factory capability of client’s own sourcing exercise.
• Identify, audit and verify alternative China based automotive injection moulders & toolmakers, capable of producing large injection mould tools and parts, (e.g. front and rear bumpers).
• Manufacturer must be willing to work with low volume production runs of 200 and 400 sets per order.
• Negotiate tooling & component costs together with payment terms.
• Help client obtain best balance for price, quality & service.
• Help client in their contractual negotiations.
• Assess risk and implement procedure to help protect clients Intellectual Property.
• Provide Project Management to deliver production parts on time and within agreed budget.
• Provide tool & component design advice.
• Help identify a consistent supply of plastic raw material, to meeting client’s impact and temperature resistant specifications.
• Produce Quality Plans & deliver Inspection Jigs & Fixtures as required.
• Help resolve any issues during the development period.
• Providing regular feedback & progress reports to client.

Solution

ES&M was able to:

• Mobilise its China team to source and verify factories.
• Investigate and verify the financial status of the preferred supplier.
• Implement procedures to assist with IP protection.
• Negotiate and document agreed contractual and pricing agreements, including current & future credit terms.
• Assist client with tool design and verification, together with raw material selection, using ES&M’s UK based Tooling Engineer.
• Work with the factory and client to identify critical technical and quality criteria. Identify & purchase necessary test jigs.
• Help the client identify the correct tooling schedule, based on CAD & 2D drawing availability, tooling lead time and expected injection press availability.
• Assist with packaging design and container fill.
• Advise on the ever-worsening world freight situation, (container availability and shipping cost, brought about by limited container availability) – following the Covid-19 crisis in China and later the rest of the World.

Result

• The MS-RT Transit using injection moulded external body parts, was successfully launched on time.
• Through work undertaken by ES&M, the client was able to achieve savings of circa 34%, when compared to their original tooling & component quotations.
• ES&M negotiated favourable payment terms and agreed the client should have unobstructed access to inspect and move their tools, should the need arise, which had been an issue with the original quotation and proposed manufacturer.
• ES&M confirmed the manufacturers financial status, not always possible without good local knowledge and trust.
• Client now has a China manufacturing partner capable of delivering quality product at a fair price, enabling the client to work on other projects, such as the MS-RT Ranger and with other automotive brands.