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Therm-O-Disc believes that it is prudent to utilize the expertise of the members of the supply base when generating cost reduction ideas. Therefore, Therm-O-Disc requests that suppliers complete and return the Supplier Cost Improvement Idea Form. Multiple forms may be required to reach the 5% goal.
Once received, the cost reduction suggestion will be reviewed by the appropriate Therm-O-Disc representatives. If implemented, savings will be shared between Therm-O-Disc and the supplier with Therm-O-Disc receiving the first 2.5% savings. The supplier will receive the second 2.5% savings and any additional savings will be divided equally between Therm-O-Disc and the supplier.
Consider the following elements when generating cost reduction ideas: specifications, volume/mix, transaction efficiency/Electronic Data Interchange, packaging, transportation, warranty, leadtime, warehousing, obsolescence, scrap and rework.
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