Purchased goods and services costs

The tailored categories take the form of professional services and subcontracted materials. For both, the company depends on its suppliers for unique, customized offerings. In fact, the company may be the only user of the product. The focus is on joint efforts to improve the design of the products and services to reduce cost. 

Sometimes, the cost is not the direct cost of purchase but the cost of product use. The case of an aerospace fastener manufacturer described in Chapter 10 is an example. The fastener itself is only a fraction of the total cost of purchasing and installing it. This leaves a lot of room for collaboration with fastener users. This collaboration will seek to lower the cost of the installation process by better designs of the fasteners themselves and tools for installing them. 

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