Going out and buying a competitor's product might seem like an odd way to maintain a long-term partnership. Cutting that product up into small pieces might seem odder still. But that's exactly what EJ Ajax did to prepare for a major appliance manufacturer's "cost out" event.
In the quest to find ways to improve quality and productivity and reduce cost, Ajax bought the competitor's product and cut it apart in order to examine its construction inch by inch. They paid for strength testing on a key component. When they showed up for the cost-out meeting, they brought the pieces. They also brought suggestions for cost reductions of more than 10% in the customer's projected annual spend with Ajax.
"There was total silence in the boardroom," says EJ Ajax president Kent Djubek. "No other supplier had ever done anything like that."
In a way, the customer shouldn't have been surprised. It's a partnership that has lasted for nearly half a century due to the commitment to ongoing improvements. In the past decade, EJ Ajax has documented cost savings for this customer in excess of $3 million.
These suggestions have helped to offset cost increases in carbon steel, keeping the customer's product competitive. The partnership between customer and vendor has kept both companies strong.
