A technology OEM was still producing a popular reel-to-reel tape player from 1973. Unfortunately, the component manufacturer made the difficult decision to obsolete the ASIC the OEM needed to continue production. This scenario forced the OEM to look for a long-term solution to ensure they could keep the tape player in production.
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 seven-year delivery schedule to support the OEM’s production requirement.
The OEM preserved $4.3M of working capital, lowered annual inventory carrying costs, secured inventory for seven 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.