Notes

Outline

Global Sourcing For The Mid-Market OEM

What is Global Sourcing? Importing components or assemblies from countries where: There is a significant COST SAVINGS Quality can be maintained at current levels or improved Delivery can be maintained at the current lead time or improved Global Sourcing is not synonymous with giving up control In fact, with your participation you will gain more control over product quality & design

Why Global Sourcing? Whether you realize or not, Your competitors are either already doing it or considering it. The Network of RJW Industrial and SB&W make it easy to do with low risk. An opportunity for the Engineer to have a major positive impact on production costs.

Why Global Sourcing? The future growth of your company depends on your ability to make your manufacturing facility as efficient as possible. With the proper approach Global Sourcing will make you a formidable competitor in your industry. You will have the resources to act more swiftly to market changes and quickly implement new ideas.

Without Global Sourcing The following chart shows how sales growth affects profits and costs in a Mid-Market OEM while using the philosophy: “We have the ability to produce and will continue to produce all our components”

Typical Growth Effects Using 100% Domestic supply Model

Using a Global Sourcing Philosophy The following chart shows how the sales growth affects profits and costs in a Mid-Market OEM while using the philosophy: “We will use Global Sourcing to supply items that, at the current time, are too labor intensive to produce efficiently given our current manufacturing infrastructure”

Growth Effect Using Global Sourcing for Appropriate items

Global Sourcing will free up valuable resources Compare resource utilization at companies that have not considered a Global Sourcing program to ones that: Have a comprehensive Global Sourcing program where Engineering has played a large role in product identification and program implementation.

Global Sourcing                              Domestic       Program                                 Only Sourcing

Why RJW Industrial  -  S B & W ? RJW Industrial is already an approved supplier for your company RJW Industrial will work to gain an understanding of your quality needs and translate those needs directly to the factory. Quality is communicated at the distribution level and maintained at the factory level. RJW Industrial will support your inventory and                        deliver product as you need.

Why RJW Industrial  -  S B & W ? RJW Industrial has Containers of products arriving frequently you don’t have to worry about making cost efficient shipments from overseas RJW Industrial has SB&W as their supply partner with over 25 Years of Global Sourcing Experience.

Why RJW Industrial  -  S B & W ? SBW is partnered with a company in China with Facilities in Hangzhou and Beijing. Both Facilities are ISO 9002 approved Our CT office has a staff of 11 people including at least one Chinese speaking person.

Why RJW Industrial  -  S B & W ? Our China facilities have a staff of over 45 people including 15 Engineers and at least 2 English speaking people at each facility. Quality and production concerns are the responsibility of the Engineer assigned to the project. Our factories employ over 900 people. Our broad product abilities are limited only by our the abilities of our staff of Engineers

Why RJW Industrial  -  S B & W ? Technical communication is the biggest challenge when working within China. SB & W  is uniquely qualified in this area with our years of experience and the extensive network of dedicated factories we have developed. We are committed to continued improvement in all areas of our business. Our supply chain is dedicated to us. This gives us the ability to keep your business and ideas… YOUR BUSINESS AND IDEAS

FAST Growth can be Realized through Global Sourcing With RJW Industrial & S B & W Global Sourcing through distribution demands very few resources. Fewer Engineering Demands Fewer QC Demands Lessens Financial Demands Lessens Space Demands The growth curve can be very dramatic if appropriate items are identified. Engineering involvement is key to a successful Global Sourcing Strategy.

Global Sourcing Implementation Engineering is the most qualified to identify candidate items RJW Industrial and SB & W are available to help identify appropriate items. QC Department can have input to identify quality concerns People on your manufacturing line can also offer valuable insight to identify items

Guideline for Identifying appropriate items Items where the Labor component of the cost is high Welded assemblies Inefficient assemblies Outsourced items from domestic manufacturers You can now gain more control over items that go into your finished product. Items where you currently have problems delivery / quality / or both

Guideline for Identifying appropriate items No Tooling Items that need to be re-designed or re-tooled. Our tooling costs are Low to None New items…. No or Low tooling costs make this the most exciting opportunity to bring that new idea to management… No payback worries. Low or No tooling costs offers the best way to understand our value…. Tool-making is the most inefficient production process we know of… Usually only 1 or 2 are produced. For us it is a minimal expense because of our Low Labor Costs.

Some of our Capabilities Casting LOW TOOLING COSTS Investment casting Sand Casting Permanent Mold Casting Materials Grey Iron Ductile Iron Malleable Iron Brass Bronze Steel Stainless Steel Zamak 3 Aluminum Powder Coating Many Colors Very affordable

More Capabilities Stamping LOW TOOLING COSTS Small & Large Presses Materials Steel Stainless Steel Brass Many others Plastics LOW TOOLING COSTS Injection Molding Extrusion Materials Available Asian Resins Most types are available.

Assemblies  are usually Labor Intensive Global Sourcing does not always mean large quantities Small Quantity assemblies are very appropriate, usually show a substantial cost savings and have a major positive impact on your resources. Many of our assemblies start out with annual quantities of 5,000 - 10,000 per year.

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Plastics have Low or No tooling costs One of our customers took the opportunity to redesign their entire product line which encompasses 150 different injection moulded cases for industrial testing equipment. The NEW look increased their sales by over 25% with no capital investment at all The low quantity requirement meant they could consider items where the quantities were less than 15,000 pieces annually. The customer never would have considered such a bold move which would have cost close to $1Million in tooling alone.

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More plastic items Some plastic items are also labor intensive.

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Metal Stampings & Castings Low or No tooling costs Low cost to change or re-design.

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Welded Assemblies Global Sourcing does not always mean large quantities Welded parts are usually appropriate and can offer a big cost savings.

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Wire Forms Complex wire forms are also appropriate. Wire forms can also be packaged to enable easier handling on your production line

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Forged Items Forged Items usually mean expensive tooling. You now have the opportunity to make that subtle design change or improve problematic deliveries

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Cast Items Castings usually mean expensive tooling. We cast many different materials using a variety of casting techniques

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Cold Headed - Forged - Screw Machine Components

Difficult Items / Processes

Not Just Price – Delivery & Packaging is Important

Shorter Time Lines With complete participation and sharing of information: Most items can go from Inquiry to Samples in 30-60 days Most items can go from sample approval to delivery in  90 days

Inquiry to Shipment

Participation in the process Sharing of information is the key to quick success What problems have you had in the past? What are the critical tolerances? The application of the part What QC procedures do we institute to insure your quality expectations? This information should considered part of identifying candidate items.

Summary This is your opportunity to have a very big positive impact in your company. You can control the Global Sourcing philosophy so it is a choice rather than an edict from upper management. Being proactive now will keep jobs… A more profitable company is a more healthy company and usually will not lay off qualified employees. You will gain recognition within your organization.

Beijing and Hangzhou

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Review RJW Industrial  - SB & W Will help Guide you Quick Prototypes – Quick Samples Reduce Overhead Reduce Vendors Increase your value to your company. Not just saving money…. Building a future.

Global Sourcing Feel free to contact your RJW Industrial representative to help identify Target Items RJW Industrial Group, Inc. 812 N. Queen Street Lancaster PA 17603 Tel: (717)  299-0212   Fax: (717) 299-1042 Thank You for your Time & Interest