CFU 0.00% 0.4¢ ceramic fuel cells limited

Ok besides the disappointment of a (less than expected) 100 unit...

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    Ok besides the disappointment of a (less than expected) 100 unit order from Zestiq I was surprised to read some real positive news in the annual.

    "During the financial year CFCL also focused on reducing the unit costs of the BlueGen product. The costs of components used to make BlueGen units are sensitive to economies of scale. In recognition of this, the Company is seeking to move from ordering components in lots of 100, to lots of 1,000 in order to reduce unit costs. This is expected to reduce the current BlueGen cost by approximately 20 percent. Increasing economies of scale are not without some risk as many processes are required to change to accommodate volume increases, however the Company works closely with its supply chain partners to mitigate this risk.
    Apart from increasing volumes, CFCL is also reducing unit costs through value engineering, that is:
     Reducing the number and complexity of components;
     Improving manufacturing processes;
     Implementing fixed tooling processes;
     Increasing manufacturing yields.
    Some examples of the cost reductions achieved are:
     Changing the design of insulation materials with the supplier reduced the cost by 20 percent;
     Reducing the number of components in the water treatment system pump led to a 30 percent cost saving;"
     Fixed tooling for the desulphuriser canister reduced costs by 45 percent.

    Now If I am reading correctly...these 20% + 30% + 45% cost reductions are in addition to the 20% economies of scale cost reduction?
    If so this is a remarkable breakthrough for the company that will definitely lead to more sales in the near future!

    Full props to the tech guys over at CFU!


 
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