Eaton Electric
Eaton Electric B.V. (Hengelo, the Netherlands) produces earth leakage circuit breakers in high volumes, using components sourced from several Swildens suppliers. Marketing research suggested that price reductions could greatly improve the company's competitive position and significantly increase sales. One option for reducing the price was to redesign the assembly which measures the earth leakage current.
Eaton and its suppliers undertook a cost-out project to identify opportunities for reducing costs while maintaining Eaton's strict quality standards. One option was to use an older technology to make the products more compact. However, this was rejected as it might reduce the long-term reliability of the devices. Instead, a new ASIC was developed which resulted in significant cost savings. Eaton and two Swildens suppliers also worked together closely on logistics and integrating their production processes to improve efficiency. One of the suppliers managed to integrate the electronics with a much smaller footprint using the modern, proven technology. This made it possible to change the connections, resulting in further cost savings.
As a result, Eaton largely met its cost reduction target, reduced the costs of its products, and has greatly increased its sales volume. It took a lot of hard work, but now both Eaton and its suppliers are benefiting from the close cooperation.
