Case Studies

Case Study for GSCS® – Concerning Services Rendered to Weathermatic, Inc. during 2012

Executive Summary

Weathermatic contracted Global Supply Chain Solutions, LLC. to substantially reduce costs and improve the visibility of supply chain operations. At the end of 2012, GSCS® had delivered significant cost savings to Weathermatic, including reducing Weathermatic’s costs by 24% within the first three weeks of engagement, and radically improved supply chain processes. Weathermatic has stated that GSCS® handled these initiatives with the utmost integrity and would emphatically recommend their services to other companies, especially those involved in technology sectors.

Weathermatic’s Dilemma

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During 2012, Weathermatic, Inc. went through enormous corporate changes, both in its product offerings and supply chain design. The principal change was caused by the introduction of Weathermatic’s new Smartlink irrigation management system. The Smartlink system includes advanced electronic components designed to determine current, local weather, adjust irrigation patterns based on these weather readings, and relay information in real time to users online through cellular data networks. The addition of these complex technology components to their large irrigation systems necessitated deep changes throughout Weathermatic’s existing supply chain.

The task of rebuilding Weathermatic’s supply chain was made more complex by two goals that the company set forward at the beginning of the year. Over the last 70 years of manufacturing irrigation systems, Weathermatic had begun sourcing some of its components from off-shore vendors; the company now wanted to bring the entirety of its supply chain to the U.S. During
this time, Weathermatic also came to the conclusion that inefficiencies existed in their current value stream and deep cost cutting might be possible.

One area of particular concern, with regard to costs, came from witnessing startling price increases from its long-term suppliers. Year on year, vendors had consistently increased their prices between 2-4%. Having worked with some of these same suppliers for more than 18 years, Weathermatic was now paying substantially more to manufacture its products than initially set out. Weathermatic believed a savings of $800,000 for 2012 was possible, assuming the issued supply prices could be reconciled and other cost cutting techniques could be employed.

The greatest roadblock to achieving this level of savings or smoothly transition some manufacturing elements back to domestic suppliers rested in the company’s management capacity. Existing supply chain managers were already overburdened. As the company moved into this new product space, the same workforce could not be expected to keep up with essential tasks while attempting these improvements.

GSCS®’ Solution to the Issues

To resolve the problems outlined above, Weathermatic elected to engage Global Supply Chain Solutions, LLC. as consultants. Weathermatic wanted to bring manufacturing to entirely domestic sources: GSCS® was able to smooth this transition and simplify the process of attaining new suppliers through its established network of manufacturers and suppliers. Weathermatic sought deep cost reductions from their existing supply chain elements: GSCS® created a savings of $800,000 in 2012, attaining the goal Weathermatic had set out at the beginning of the year. Further, GSCS® was able to mitigate some supply chain risks discovered during the contract period by utilizing beneficial redundancies. GSCS® met and exceeded all objectives outlined by Weathermatic.

The Benefits of GSCS®

GSCS® brought immediate results and changes to Weathermatic’s supply operations. Initial improvements began with increased visibility and oversight to its existing supply chain operations. Due to the long-term nature of Weathermatic’s relationships with its suppliers, details of manufacturing had begun to go unnoticed or exempted from reporting. GSCS® brought Weathermatic’s enterprise resource planning system up to date to include all relevant information with regard to the company’s bill of materials, design specifications, and purchase orders. These improvements ensured that communication between Weathermatic and its vendors was seamless and permitted increased insight into the efficiency of current operations.

Weathermatic experienced substantial savings in costs within three weeks of contracting with GSCS®. The method of this savings is made most explicit through an anecdote related by Mr. Mike Mason, the CEO and President of Weathermatic. One week after engaging GSCS®, Weathermatic employees brought a purchase order worth $115,000 to Mr. Mason for approval. Upon discovering that the purchase order had not been analyzed by GSCS®, Mr. Mason directed his employees to give GSCS® staff time with the purchase order before approval. Within two weeks, GSCS® returned an updated version of the purchase order to Mr. Mason for approval. The materials quantities and vendors on the purchase order had not changed; only the cost of the purchase order had changed. GSCS® had reduced the cost of the purchase order by $38,000, a savings of over 24%.

According to Weathermatic staff, further benefits of the consultation were found in the lessons learned by working alongside GSCS® staff. One such lesson that has continued to aid Weathermatic employees is a true understanding of what drives a vendor’s pricing matrix. By developing concepts such as increasing options within a supply chain to improve pricing, Weathermatic has been able to grasp the problems that their supply chain formerly faced. At this point, sufficient redundancy has been built into Weathermatic’s supply chain to mitigate risk and ensure the greatest cost savings.

The substantial savings generated by GSCS® has allowed Weathermatic to continue its reinvention and fund even greater corporate shifts. The company has now begun hiring expert software developers and cellular engineers that the company otherwise would not have been able to afford. Without the impact GSCS® had, Weathermatic has stated that it would not be capable of innovating with the same rapidity that they currently are.

The Nature of Working with GSCS®

Weathermatic, having operated for more than 70 years, has a deep seated belief in the necessity of integrity and adherence to moral values, both internally and externally. Weathermatic consistently vets its partners, employees, and even clients by numerous means before engaging them. Upon discussing consultation with GSCS®, the company called numerous references supplied by GSCS®, read extensively on the company’s prior dealings, and personally interviewed GSCS® staff. This information brought Weathermatic to the conclusion that GSCS®, like themselves, placed integrity as a higher priority than profits or the bottom-line. Only after being certain of the company’s character did Weathermatic choose to employ the services of GSCS®.

Despite this vetting process, Weathermatic supply chain personnel were initially very hesitant to work with GSCS®. The most apparent sentiment was that in-house staff could complete some number of the tasks GSCS® would be taking care of, if given enough time. Corporate leadership did not believe that their current staff would be capable of meeting their current obligations while carrying out these new initiatives and so chose to engage GSCS®.

According to Mike Mason, Weathermatic’s CEO and President, professionalism, integrity, and competency were readily apparent throughout his dealings with GSCS®. Mr. Mason stated that he was pleasantly surprised by the heartfelt engagement from GSCS® and the time that was invested in Weathermatic, despite his sense that the company was one of GSCS®’ smaller clients. Further, Mr. Mason recalled one instance of having GSCS® staff involved in a meeting with a long-term vendor concerning reducing the price being charged to Weathermatic for manufacturing. Despite an increasingly hostile vendor, GSCS® staff were cited as maintaining perfect composure and continuing to focus the discussion on a win/win scenario. By advancing the idea of the relationship being more a partnership than a traditional agreement with a supplier, GSCS® staff were able to secure a greatly reduced price for Weathermatic, as well as maintain a relationship with a valued supplier.

Weathermatic staff repeatedly stated that GSCS® carried itself with the highest integrity and a passion for results throughout its experience with the company.

Weathermatic’s Future with GSCS®

Weathermatic is currently working to contract Global Supply Chain Solutions to take over the entirety of its procurement operations. The company believes that GSCS®’ freedom to attack specific, strategic initiatives will continue to provide substantial savings to the company and greatly improve the company’s supply chain efficiency.

Upon asking if Weathermatic would recommend GSCS®, their first response was to immediately say that they would absolutely not recommend GSCS® to other companies within their own industry. The improvements GSCS® offered to Weathermatic were simply too great a competitive advantage to offer to its competition. Weathermatic went on to state that they would happily and emphatically recommend GSCS® to companies outside their own industry.