07 Jul 2011

Are Your Components Cutting Into Your Profits?

Connectors

“Why does it seem that every time we buy a cable the price goes up?” A common question we hear asked by purchasing managers. It’s most likely because 1 or more of the components used to make your cables have gone up in price. One component can change your cable cost by $3-5 alone.

Component prices increase for only a few reasons.

1) This happens when the material availability is limited to due to supply or demand.

2) Shipping costs and fuel surcharges are being forced about many suppliers and those increase the cost of materials.

3) Regulatory changes from RoHS and the EPA. The green movement has not been kind to the cable and manufacturing industries. Restrictions and added requirements can greatly increase component costs.

4) Technology changes. New technology can make a component obsolete and therefore hard to find.

 

“So, how do I keep my components from cutting into my margins?”

Simply ask your cable manufacturer if there are alternatives for components that won’t compromise patient safety. You may not realize that you are using the most expensive component which might not be required for your application.

 

For example, your cable may be connected into a case and unplugged once in its lifecycle. Yet you are using a heavy-duty connector that has a full metal casing and built for extensive wear and tear which you don’t need. Causing your high priced connector to impact your cable costs. As a final real world example, I found 3 of the same connector at very different prices.

Connector:   5 pin din 240 degree

$3.59  metal casing

$1.98  slip on plastic housing

$1.00* slip on plastic housing

*This customer decided that this connector at this price will work well in a product and the environment its used in.

You can save money and increase your profit margin without compromising safety or performance, by finding an alternative to high priced components. For more cost saving strategies call us at 800.635.6995