Solve the problem of unpredictable color customization
Release time:
2025-03-20
Caddy, which has a 60 percent market share in the pallet truck segment, has been experiencing declining profit margins due to a growing problem with outdated inventory. Caddy supplies the market with transporters in six colors with a guarantee of delivery within six months. Productive Plastics' advice reduced Caddy's raw material costs per vehicle by 12 percent and finished product inventory by more than 40 percent.
backdrop
Caddy manufactures complete food service equipment, including conveyor systems, pallet trucks, exhaust systems, air purification systems, utility distribution systems and kitchen systems. Caddy sells these systems to restaurants, hotels, health, prisons and educational institutions with a reputation for high quality equipment, low maintenance and good customer service.
problem
Caddy, the market leader in the pallet truck segment with a 60% market share, has been experiencing declining profit margins due to growing problems with outdated inventory.
Caddy supplies the market with transporters in six colors with a guarantee of delivery within six months. In order to meet the payment time requirement, Caddy must guess the color matching based on previous sales history.
Over time, Caddy's inventory of finished products doubled, and to make matters worse, the market trend was for trucks with new colors, and many of the inventory became obsolete. Caddy has been forced to extend their delivery times, sourcing raw materials to order rather than guess at colour matching, and has lost market share. In addition, their current panel supplier requires them to purchase a minimum number of panels per color to meet the requirements of their raw material supplier.
Caddy found it necessary to extend delivery times, but still could not solve the problem of unnecessary inventory accumulation.
solution
After finding Productive Plastics, the company suggested that Caddy refocus the product line to offer monochrome products and introduce a low-cost decal with adjustable colors that could be easily installed on the unit before shipping.
result
Caddy consolidated its truck purchases into a standard color instead of custom colors, reducing raw material costs by 12 percent per truck and reducing finished product inventory by more than 40 percent. The problem of obsolete inventory is completely eliminated, and the delivery time to customers is back to a minimum of 6 months.
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