Plugging profit leaks for Walther Electrics

Walther Electrics Ltd is an industry leader in the manufacture of industrial plugs and sockets. It, like most companies, operates in a competitive market place and as a result it needs to keep its overheads under tight control. As with most well-run companies it thought that this was being achieved. But rather than sit on their laurels, the staff decided to confirm whether their view was correct.

Following a visit from Neil Cullen of Expense Reduction Analysts they decided that they had an ideal opportunity to use some additional expertise. This assistance was offered on a risk-free basis. Expense Reduction Analysts applied its process review to the major overhead costs of F. Walther Electrics Ltd and established that it was achieving market value in all areas except one.

To maximise its own expertise the company sub-contracted injection moldings. But this was one category where attempts to reduce costs had not been successful in the past. Neil used the expertise of Vic Lavender from within Expense Reduction Analysts to conduct a review of the sub-contract operation. An analysis took place of all the sub-contract costs and profitability of the sub-contract company. It was established that the prices being charged for some of the moldings were above market rates. As a result of this analysis and subsequent negotiations the cost of injection moldings was reduced.

Robert Pasterfield, the Managing Director, was delighted by the result and stated, “I was impressed by the attention to detail and standard of reports, and general customer care shown by Neil and Vic.” Prior to Robert being promoted, the previous Managing Director Mr. Elwyn Williams, had commented to Neil and Vic that, “You are the most professional analysts I have been involved with in my career.”