Reducing Costs and Improving Lead Time Through Innovative Collaboration

The Problem
As a leading manufacturer of Automated Teller Machines, Diebold continues to face challenges in pursuit of market share growth. The company sent a letter to its suppliers explaining the challenges and asked for their help in developing new and innovative ways to conduct business. Donnelly saw it as a perfect chance to deliver value.

Knowing that the best time to cut boulders out of the riverbed is when the water's low, Donnelly also believed it was an opportune time for Diebold to optimize its supplier base.

The Donnelly Solution
Donnelly offered to consolidate Diebold's injection molding and tooling process as a way to take out direct costs as well as the softer transactional, relational costs. The promise was to produce a 10% cost reduction in addition to quicker turn-around times. Diebold accepted the plan and ultimately moved 225 tools—spread out among several suppliers—to Donnelly.

The Results
The consolidation plan went smoothly, due in large part to Donnelly's intimate understanding of Diebold and ability to quickly add capacity. Immediate cost savings of 10% were realized. And lead times were significantly reduced as well. While now managing over 600 Diebold tools, Donnelly is still able to achieve the total cost targets and maintain an order turnaround time of under five days.

According to Richard Bear, Strategic Procurement Manager at Diebold, "Donnelly is one of our top strategic suppliers. They have not only helped us control costs, but have provided benefits to our customers in the process.”