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Landing the Job and Keeping It

Contract manufacturers

Contract manufacturers and job shops weigh in on what OEMs value most in their suppliers

Rebecca Carnes
Design-2-Part Magazine

Contract manufacturers (CMs) and job shops constantly find themselves under pressure to deliver outstanding price, quality, and on-time delivery to their OEM and product manufacturer customers. Handling tall orders from customers takes dedication and expertise. And delivering on promises with consistency is key to whether a customer returns for more business. What sets some contract manufacturers apart from the pack is not just offering quality, fair prices, and on-time delivery, but also having the flexibility to accommodate changes, an offering of up-front honesty, and a dedication to consistent follow-through.

Respondents to an online Design-2-Part Magazine survey of contract manufacturers overwhelmingly noted that their customers are foremost interested in on-time delivery, competitive pricing, and quality. "Good communication and accountability to do what you commit to is the separator," said Dan Young, marketing manager for Marik Spring, Inc., a manufacturer of springs and wire forms based in Tallmadge, Ohio (www.marikspring.com). He noted that OEMs assess Marik's performance based on the company's ability to respond to change, whether in design or schedule.

Quality manufactured products that are delivered on time and within budget is what customers typically are looking for in a supplier, according to Dick Doyle, sales manager for Astro Craft, an Illinois-based company that provides CNC turning and milling of critical components (www.astrocraft.com). The company has been a silver level or better vendor for several key customers during a number of years, he said.

Sonoco Protective Solutions, which has won several quality awards, delivers "what is promised, on time with no hassles on invoices," said marketing specialist Jessica Irons. The South Carolina company produces molded-foam components and packaging across many industries, including automotive, medical, technology, HVAC, and consumer products, and Irons said that they are usually judged by customers on their on-time delivery and ability to deliver products within specification.

The ability to hold tight tolerances on complex fabrications, as well as consistency and good service at a fair price, are important to customers of Acme Wire Products Company, Inc., a Mystic, Conn.-based CM that specializes in wire fabrications and wire forms (www.acmewire.com). Once they've been selected by a customer, they are judged on "quality, on-time delivery, and ability to recommend cost-efficient solutions, said Ed Planeta Jr., vice president of sales.

The top three things that OEMs are looking for in vendors are quality, price, and, above all,  customer service, according to Tobey Marsicovetere, marketing director for Bare Board Group, a Florida-based, award-winning manufacturer of multi-technology, low- to high- volume circuit boards (www.bareboard.com). "If you give the proper service to your customers, they're willing to pay a higher price for that hands-on touch," she said in an interview. "One of the things we do here that's different from a lot of board shops is that once a customer is in the door, they are assigned to an inside sales person. And when they call, they can ask for that person and always deal with the same person instead of some random person quoting their boards," she said. "They have the same sales person doing all of their quotes, so that they get to know them and they get that interpersonal connection. We tend to focus on that first. We constantly strive to make sure that is always happening so that they can call up and talk to that same person."

Helping the OEM lower the total cost of their products is essential in customer satisfaction, and companies go about achieving this in numerous ways. Scheduling production and releases to minimize the inventory a customer must keep on hand is one way that Marik Spring goes about keeping costs down. Another is continuous improvement, including anything from upgrading equipment to adding processes and improving the working environment.

Jessica Irons of Sonoco Solutions said the company's molded foam components reduce the overall weight of the final product, which saves on shipping and fuel costs. Also, product complexity can be reduced by allowing the foam components to be snap-fit into place instead of using screws and fasteners, thus reducing overall part count, raw material use, and labor for assembly.

"Our customization capabilities, flexibility in manufacturing processes, and application design support allow Ultrafab to get involved early in the design to help integrate parts, reduce components, and reduce costs by increasing through-put or costs related to field service," said Keith Bradt, national technical sales manager for Ultrafab Inc., based in Farmington, New York (www.ultrafab.com). Ultrafab manufactures custom ultrasonically-welded brushes used for active cleaning, static elimination, and sealing against environmental conditions, such as moisture, dirt, or light. The company also provides additional value by assisting in the design integration and secondary assembly of its components, he said.

Paulo Products Co. (www.paulo.com) recently received the Toyota Boshoku America Supplier Quality Award for 2011 in recognition of "excellent quality performance" by Paulo's facilities in Nashville, Tenn., and St. Louis. As one of the largest heat treating companies in North America with plants in St. Louis, Kansas City, Mo., Nashville, Murfreesboro, Tenn., and Cleveland, Paulo delivers customer satisfaction by helping its customers succeed through "quality, service, and productivity," said Jim Heman, Paulo's vice president of sales and marketing, in a statement. "We measure our performance in these three areas and we continually solicit and document feedback from our customers. We annually perform a customer satisfaction survey of our customers. Each year, our goal is to have at least 40 percent of our customers report that we are performing better than we did the previous year."

Toyota Boshoku grades suppliers on four major categories of performance: quality, cost, delivery and management. The management category includes customer service, responsiveness, participation in programs, document completion, and risk assessment. Both Paulo facilities serving Toyota Boshoku score in the "preferred" supplier range on each monthly performance report, Heman said. "To be recognized by an organization such as Toyota Boshoku is a great honor. The name ‘Toyota' is synonymous with high quality and excellent performance. We've worked very hard to be a supplier who contributes to their success. It's rewarding to know that they recognize our effort and our record of performance," he said.

Tenere, Inc., of Dresser, Wis., recently received a Supplier Award from Fujitsu Network Communications in recognition of levels achieved in quality and cost reduction. Tenere, offering mechanical fabrication of sheet metal, injection molding, and machining, won the award for Outstanding Value Contribution Performance after its design recommendations and implementation of new construction techniques led to the elimination of a specific, chronic quality issue and improved production efficiencies. "We are extremely pleased to be recognized by Fujitsu Network Communications," said John Kamakian, CEO, in a statement. "The award directly reflects our continued commitment to providing our customers with the most thorough and innovative technical solutions for their requirements."

Fulfilling Needs, Gaining Trust

Supplier evaluation efforts tend to be similar in nature as they all want the same basic things, said Rick Malec, general manager for Technical Precision Plastics, Inc., a global provider of precision plastic injection molding services with facilities in Mebane, N.C, and Haina, Dominican Republic (see Customers Get Capacity, Expanded Offerings from North Carolina Company).  "Technical competence is one, and financial stability is always high on the list. A good quality system is a must. And, I think, while you do not find it on any form, customers are looking for a supplier they can trust," Malec said, adding that the company has received awards from their customers, including UTC Corp., for which they are a certified gold supplier, the highest level attainable.

Price, customer service, and technical competence are the top three things OEMs are looking for from their suppliers, Malec added. "If a customer calls with a question or complaint, we always get back to them the same day. Even if we don't have all the answers, we get back to them so that they know their call was important to us. You need that sense of importance on everything that is customer related," he said.

And while price is always towards the top of the list, so is capacity, he said. "Price is an element, but if you don't have that capacity available, they (the customer) will write you off. If you say you have plenty of excess capacity, then they move down to price. It's one of those things where there's a pecking order and you've got to satisfy a number of things. It's not just capacity, but a number of other elements. You've got to have quality systems, a good track record for on-time delivery for customer service, and you have to have a reasonable price," Malec said.

When evaluating their own suppliers, Malec went on to say that they look for reliability, stability, pricing, and customer service. "We have a formal vendor rating system where we evaluate them on performance, number of shipments that come in, number of defects that we might find, and the number of returns or rejections that we have with a supplier," he said. "We look at on-time delivery and performance, and so we rate them and give them report cards. Suppliers that perform poorly for us get a complaint from us and a request for corrective action, and if that corrective action isn't done to our satisfaction, then we look for another supplier to replace them."

"We're looking for reliability," added Technical Precision Plastics' business development manager Jim Corrado. "Because if we have, for example, eight molded parts and three non-molded parts that we're purchasing outside, all it takes is for one of them to not be available and we cannot produce the product," he said.

Competency plus capacity equals capability, said Jack Gilchrist, president of Gilchrist Metal Fabricating Co. in Hudson, N.H., who added that larger companies sometimes perform onsite quality audits and check out his company's financial strength with Dun & Bradstreet. "Many like or require ISO certification or compliance. They also like to see references, and often the prospect was referred to us by a relationship common to both of us," he said. Letters of accolades, referrals, and expressions of gratitude have all been given to Gilchrist from customers, he said, adding that "the ultimate award is a referral, a repeat customer, or a long-term relationship."

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