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Archive for July, 2008

What do Spring Manufacturers do to Reduce Costs and How Customers can Take Advantage

Wednesday, July 23rd, 2008

What do Spring Manufacturers do to Reduce Costs and How Customers can Take Advantage

Many spring customers do not take advantage of cost-saving opportunities offered by spring and wire form manufacturers. Cash flow is an issue, especially for smaller companies, but instead of holding on to a bill and paying in 45-60 days, some spring manufactures (including Katy Spring) may offer a discount if the bill is paid early-the standard for most is ½% 10 days. The savings can add up over time.

Another way to save money with spring manufacturers is to buy more. Many spring manufacturers are willing to offer a discount for making a larger batch of spring and wire forms, and release the inventory over a period of time, usually up to 12 months. Spring and wire form manufacturers are willing to do this (the industry term is blanket orders or split releases) to secure the business and allow more flexibility in scheduling the shop. The customer saves many in two ways, a lower unit cost for the spring or wire form and reduced inventory.

Scott

Spring Manufacturers: Value vs. Price

Thursday, July 3rd, 2008

We’re always looking for the best “deal”. Who isn’t? In the spring business, the best price gets the order…or does it? Many spring manufacturers sell their product solely on price. They quote very low, because they are trying to “steal” business away from another spring manufacturer. I’m not naive enough to think that price DOESN’T matter…it does. We have to stay competitive, however it’s important to show customers VALUE over the long term so that price is not the only variable that matters to a customer.

For example; Katy Spring had been servicing a valve manufacturer with compression, extension, and torsion springs for the past 5 years. The customer contacted Katy Spring to say that they had received a quote from another spring manufacturer for a much lower price than they were currently paying. Though they didn’t necessarily want to do it, the valve manufacturer had to try this other spring manufacturer. Katy Spring was given a second chance to bid, but declined to match the competitive quote.

After a few weeks, spring orders started to come in to Katy Spring from this valve manufacturer. I personally placed a call to see what had happened. The customer explained that their new spring vendor could not meet deliveries, and that trying to get answers or anyone on the phone for that matter was very difficult. The new spring manufacturer was “a pain” to work with using this customer’s words.

Sometimes customers will try your price, they won’t stay very long unless there is value in staying.

Scott


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