A leading manufacturer of HVAC and refrigeration compressors was struggling with their current supplier both from a cost and delivery performance standpoint due to an inefficient and widely spread supply chain. Their steel was melted in one state, pickled and lubed in a separate state, circle blanked in another state and finally delivered to the customer’s plant location in a fourth state.
Utilizing VA/VE principles, we were able to leverage Interstate Steel Company’s in-house logistics capabilities combined with our vast sourcing power to develop an optimized supply chain. The steel for this application is now melted, hot rolled, pickled/lubed and circle blanked all within the same state prior to being delivered to our customer’s plant location. The rationalized logistics provided our customer an annual cost savings of nearly $1.5M and earned Interstate Steel Company the business.