The only risk you face would be that we cannot manufacture the product due to our underestimating the technical challenges of producing your part or assembly. Being a long time supplier of critical components to the Automotive Industry, we fully understand that one missing part which goes into one sub-assembly, can cause whole production lines to be idled. If this extremely rare circumstance occurs, you will not be responsible for any of our direct costs. We also will not be responsible for any of your direct costs from the lack of our components. If any tooling or materials are invoiced and paid by you to us prior to part delivery, these monies will be refunded. Placing this type of responsibility on us means that this situation seldom or never occurs. We do follow a methodical process for reviewing your job, creating first articles for your approval as well as ongoing project management. We pledge that if there are any glitches caused by us and/or our supply base, you will be notified promptly.
This was a big question 10 years ago. The majority of our clients, being experienced and well established in the marketplace, have found that LCR’s (Low Cost Regions) have their place and HVAR’s (High Value Added Regions), which comprise the major industrialized countries, have theirs as well. Thuro Metal Products, in response to the disparate labor costs between regions which mushroomed when China entered the World Trade Organization (WTO), focused on automation of the entire part- production process. Automation means that the percentage of direct labor cost per component produced is relatively low, which mutes the low wage advantage an LCR may have. This has kept us competitive with respect to unit cost per component part or assembly. Additionally, not depending on repetitious human influence in the production process, dramatically decreases defects while providing for stable, predictable output. Last, automation dramatically increases throughput, enabling not only a competitive price but also reduced lead times and overall responsiveness to our customer’s needs.
Yes, our standard terms, which are F.O.B. Brentwood N.Y., with payment terms of Net 30 days, are negotiable. Also, the price is negotiable. Our costs to produce your product using our existing facilities are made up of five main components. They are perishable tooling, raw material, machinery time, direct labor, and administrative time or general overhead. Anytime we can share information and experience we have the ability to reduce costs. We have some instances where special materials are used, which comprise a majority of our cost of goods sold. In this instance, we will offer the option of invoicing for material when it is received by us at the start of the production process. For all materials and services purchased which are sold under standard terms, we add between 12 and 20 percent to our cost to cover the administrative expense as well as the cost of capital. If material is invoiced at the time it is received we will typically charge only for the Administrative portion and mark up the material between 5 and 10 percent. When we say we are negotiable, we mean that when we see that there is an opportunity to offer different options, we pledge to be transparent and let our customers know during the quoting process, what the driving cost is. Most of our clients find that buying a “turnkey part” makes the most sense and, over time, yields the lowest total procurement cost for our client. Having one “quarterback” eliminates hand-off mistakes and streamlines administration of the activities required to deliver the part.
Many of our clients choose to set-up supply agreements with us. These agreements are all somewhat similar but we find are all customized to fit the preferences of the specific customer. The typical agreement allows us to produce a certain amount of the annual demand for a part or assembly. If we choose to produce beyond the agreed-to amount, it is at our own risk. “Clean-up” rules are established, which means that, if we produce what is estimated to be 1/4 of one year’s demand and, after 6 months, nothing is pulled, we can ship the product. We are also willing to make smaller, more frequent shipments so that our clients are able to reduce their WIP. The primary benefit we get from these types of agreements is that we are able to “level load” our production. This often enables us to increase overall throughput and run a more efficient operation. What you, the customer, receives is the availability of your parts to ship within 24 hours of our receiving your pull signal. About the only thing we will not consider is an open-ended agreement regarding delivery. The agreement must contain parameters whereby after a pre-determined timeframe, ownership of the pre-determined maximum build quantity transfers from us to you, the client.
We will repair or re-manufacture the components at no charge to you. If we need to repair parts, we will ensure that they are like new, and not different in form, fit or function from the non-repaired product. We will inform you if parts need to be repaired and will submit samples at our cost (including freight costs), if necessary. In the rare instance where this occurs, our system requires that we document all re-processing and proceed under the close supervision of our Quality Control Department.
Yes, we have an open door policy with respect to how we produce your component parts. The only restrictions we are governed by are those with respect to rules and regulations in accordance with ITAR or “The International Traffic in Arms Regulation.” We also respect the fact that we serve niche markets. We will be sensitive, during plant tours, not to share any information or knowledge received from one client with a potential competitor. All in all, we strive to work by the golden rule.