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Guaranteed Cost Reduction Program Grows Business and Strengthens Supplier Partnership
Can you imagine a supplier who is willing to guarantee cost savings if you purchase his products and follow his recommendations? This may sound incredible, but it was an opportunity that The Holland Binkley Company couldn't refuse. This cost saving proposal was offered through a unique program called Guaranteed Cost Reduction (GCR) from The Lincoln Electric Company, a manufacturer of welding equipment and consumables. Lincoln's original proposal to Holland Binkley called for a $10,000 savings, but what has resulted is a six figure cost savings, a growth in business and a strong, long-term partnership between customer and supplier. "Partnering with Lincoln was appealing to us because the majority of our direct labor employees are welders which means we spend a significant amount of time and money on welding," explains Jim MacLellan, Vice-President of Materials at The Holland Binkley Company. "We have always looked at our total costs and want to learn how to impact those costs with the help of suppliers." For many years, Holland Binkley's Warrenton location had been purchasing Lincoln Electric's L-50 welding wire. What started out as a proactive move to strengthen the business with Holland Binkley, turned out to be a defensive measure that really paid off. Not only did the GCR program secure the welding wire business that Lincoln later found was in jeopardy at the Warrenton plant, it also provided an opportunity for Lincoln to supply welding equipment to the company's other plant, which had not previously been a Lincoln customer. "We sat down to evaluate the Holland Binkley account,
and it was apparent that we weren't providing any
value-added services for them," says Deanna Carter,
a Technical Representative in Lincoln Electric's St.
Louis office. "Although we didn't know it, our timing
was perfect. Binkley had begun to shop around for
a better price on the wire we provided. But when we
met with them and presented our overall package of
reduced costs and our commitment to working together
in a partnership effort, Mr. MacLellan found value
in what we offered and decided to give GCR a try."
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©1999-2012 The Lincoln Electric Company. |
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The Holland
Binkley Company, a member of the Holland Group, is
a major manufacturer of components for tractor trailers
including landing gear, suspension undercarriages
and custom parts. With locations in Warrenton, Missouri
and Dumas, Arkansas, the company uses high strength
steels to create its trailer components. And welding
plays a large part in its production.
