LTTS Selected to Benchmark Cost of High Spend PCBAs for Global Health Technology Provider

By Sharada Prahladrao

Category:
Project Success Story

Customer Description: Health technology is defined by the World Health Organization as the "application of Cost of High Spend PCBAsorganized knowledge and skills in the form of devices, medicines, vaccines, procedures, and systems developed to solve a health problem and improve quality of lives.” The customer, a Dutch multinational conglomerate focused on health technology, wanted to benchmark cost of high spend PCBAs (printed circuit board assembly) and cable assemblies. LTTS (L&T Technology Services), with its vast experience and expertise in this domain, was the preferred partner to execute this project.

Business Challenges: LTTS had to help the customer overcome multiple challenges and achieve these objectives:

  • Cost saving target of $1.5 million from current spend by identifying cost potential areas in high-cost contributors through spend analysis.
  • Identify cost potential areas in high-cost contributors through spend analysis.
  • Define the sourcing strategy (by commodity and supplier).

LTTS’ Approach: LTTS approached the problem by understanding the local suppliers and cost analysis of the PCBA and cable assemblies. The step-by-step approach:

  • Identified assemblies and parts that are high cost through spend analysis.
  • Executed “should costing” for various high spend PCBAs and cable assemblies to identify the price gap and negotiate prices with the current supplier.
  • Identified alternate components for high-cost items in PCBA and cable assembling to optimize the material cost.
  • Identified potential alternate suppliers in other countries for complex PCBA and cable assemblies.

Business Benefits: The multiple business benefits include:

  • Generated cost funnel of $2.15 million through “should costing,” alternate sourcing and parts.
  • Prepared cost negotiation strategy for individual suppliers and commodities.
  • Developed cost methodology for complex assemblies, like flexible PCBAs and Coax cable assemblies.

 

 

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