Medical Devices: End-of-Life/Last Time Buy

A medical device manufacturer in the anesthesia and respiratory field utilized a print head in production. The OEM encountered an unexpected Last Time Buy notice for this critical component, and subsequently, needed to place a Last Time Buy for $250K. With end of quarter approaching, Finance desired another option rather than to cut a PO for $250K. The OEM needed support from 2021 to 2027, and only had stock at their contract manufacturer to last for the next few months.

Through an Inventory Ownership Solution, Partstat placed the Last Time Buy directly with the component manufacturer at no change to the OEM’s Cost of Goods. The OEM and Partstat entered into a supply agreement. Partstat provided a six-year delivery schedule to support the OEM’s production requirement.

The OEM preserved $250K of working capital, lowered annual inventory carrying costs, secured inventory for six years of production, reinvested capital into winning projects, and locked in component costs for the duration of production. With a 20-week lead time on the part, Partstat was able to secure the remainder of the inventory needed for the life of the OEM’s product while eliminating supply chain disruption.