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Squeezed for Margin: Small Manufacturers Stop Leaving Money on the Table

January 08, 2020 / MIKE FRANZ

Price optimization technology for large manufacturing operations costs from $120K - $1.5M per year. For multi-location, global, and publicly traded companies this is an expense easily cost-justified. A small 1% in margin preservation is worth thousands of times the expense of price optimization technology.

The manufacturing industry drives innovation in America. It is the birthplace of products and processes that make the world a better place. ManufacturingPower uses lean manufacturing principles by eliminating waste around industrial supply spend with market comparison and analysis. Based in lean principles there is an on-demand implementation process driving an immediate ROI and elimination of waste.

Surviving the margin squeeze
Small and midsize manufacturers report the biggest 2020 challenges are price-cut mandates and online reverse auctions which compromise quality and endanger the business. Supporters of the practices say the strongest suppliers will survive, making supply chains more efficient. When operating margins are already thin, a rigorous and continuous process improvement mandates on-going SKU pricing evaluations for every element in the manufacturing operation.

Unsurprisingly, there has been a shift in manufacturing business process in practically every American industrial setting. The lean thinking paradigm now includes purchasing and supply chain functions.

With access to unlimited “Part Number Matches” per year, even the smallest manufacturers realize significant savings, capture lost margin, and view costs versus peer market pricing. Insight to suppliers with the lowest costs, viewing potential savings, and tracking year-to-date savings, prove the efficacy of these new technologies.

PowerPotential Report: Step One
Until now the price tag for immediately accessible comparative pricing has been too expensive for most of the 89% of small to mid-sized U.S. manufacturers with fewer than 50 employees). 2020 introduces a new affordable solution which provides access to pricing optimization with the ability to evaluate systematically. This new technology solution is priced at less than $5,000 per year. 

ManufacturingPower suggests that small manufacturers start with a free PowerPotential Report which includes easy data uploads, CSV and XLS file formatting, and insight into top six savings opportunities. Within 24 hours, this powerful data demonstrates where even the smallest manufacturers can start realizing significant savings with access and transparency to data.