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Awarding the Job. Judging Performance. Handing out the Prize.
Rebecca Carnes and Mark Shortt
Product manufacturers responding to a Design2Part Magazine Survey reveal what's important to them when choosing suppliers, evaluating their performance, and recognizing a job well done.
When manufacturers are asked what they look for in their suppliers, a rallying chorus of "Quality! Price! Delivery!" can be heard. But beside these prerequisites to doing business are a host of other significant issues that can make or break a deal. Some of the crucial criteria—including consistency, certifications, responsiveness, lead times, reliability, and, especially, straightforwardness—were revealed to D2P in a recent online survey that asked OEMs and product manufacturers a number of questions about their selection and evaluation of suppliers.
For suppliers that consistently meet these criteria, the rewards can be immense and are often visible in the form of repeat business, customer recognition and referrals, and industry-wide awards. Marlin Steel Wire Products, a Baltimore-based manufacturer of custom wire baskets, wire hooks, and sheet metal fabrications, has won several industry awards, including being named to Inc. magazine's "5,000" list of the fastest-growing private companies in the United States (www.marlinwire.com). Marlin Steel was also named last year to the "Inner City 100" by the Initiative for a Competitive Inner City (ICIC), which promotes economic vitality in urban areas.
The company, ISO 9001: 2008 certified for the quality of its operations, focuses on quality, speed, and precision in its operations because that's what customers look for first and foremost, according to Andrew Ratner, Marlin Steel's chief of communications. "It's what led to our company motto, 'Quality Engineered Quick,' Ratner said in a phone interview. "We provide the most value because our customers count on the fact that we're going to put great design and material into the solution they're seeking. We moved from having a largely commodity-driven product line—bagel baskets—to a more specialized, exacting field of custom baskets for industries including aerospace, automotive, and health and life sciences, among others." The company receives "frequent letters and e-mails of thanks from customers who appreciate the attention to their custom orders," Ratner added.
What to Look For
"I want straight talk, no BS or cheap 'by the book' rhetoric," said Mick Yusko, tech consultant for Simax Prototypes, in his responses to the survey. Yusko added that depth of knowledge of subject manner and the ability to hold a "linear conversation" usually indicate the manner of services delivered. "Show me similar samples that you have done for others," is a request that Yusko will make of a prospective supplier, followed by the question, "What were their problems and what were your solutions?"
"I really hate being lied to," said Ryan Shanks, owner of Logic Industries LLC, "especially about delivery time frames." Truthfulness, he said, is his main indicator of whether a partnership would be started and continued. "If it's really going to take sixteen weeks for you to make my parts, I want to know that up front, not two or three weeks into the month [of] lead time you quoted me," he said.
Flexibility and the ability to deliver feedback that can help reduce the cost of a part were runners up in importance to Shanks. For instance, if a part is modeled with a series of end grooves that are made normal to a concave face (i.e., the groove approach angle relative to the long axis of the bar changes for each groove), but it would appear far cheaper and faster to machine those grooves all from the same angle, Shanks wants to know. In one case, he said, it turned out that the grooves were strictly cosmetic and the approach angle didn't matter at all. So his supplier was "able to save several operations and a significant chunk of cycle time by cutting those grooves all from the same approach angle," he said. "That catch on their part got them the job and saved me a significant amount of money."
One OEM said they were "looking for a partner" and another chimed in that they were looking for a company that "takes a personal interest in how their products can help my company's goals." "We have very high standards in the work we perform and we expect the same caliber of work from our sub-contractors," said Melvin Brown, program manager/outside operations for Manufacturing Services Inc.
James Donnelly, owner of Armstrong Metalcrafts, admonished: "You'd be shocked to learn that over 80 percent of vendors and suppliers that I contact are unwilling to engage in any conversation," he said, explaining that there is a serious lack of willingness to engage and answer questions for a small company. "The little guy can't get a break in this country. Suppliers and vendors in this country have forgotten that companies frequently start with one guy and a single-digit number of ideas. They've forgotten that they can grow their business by helping others grow to become good customers. They've forgotten that in the rest of the world, vendors are falling over themselves to get my business. They've forgotten to compete. Made in the USA is my priority. Some of my projects had to be cancelled because no U.S. supplier would help, even though I had several offshore suppliers offer to help."
Ron Suggs, production control manager of HITEC Sensor Solutions, Inc., expressed what's on the mind of most OEMs—quality, price, and on-time delivery. "Sometimes, it's worth paying more for a product that will be delivered to us much quicker! High quality is always needed, though," Suggs said. "Consistently reliable quality and on-time delivery is paramount," echoed Jeff Walters, president of The Master Products Company, adding that "a balance of competitive pricing with sound financial health is also required."
Of course, finding a vendor to fill certain specifications is not always easy, and OEMs and product manufacturers have practiced ways of finding contract manufacturers (CMs) and selecting the strongest candidates. Many cited the Internet, trade shows, and trade publications as starting grounds, and much attention was given to referrals. One survey respondent stressed the need to know what questions to ask when evaluating possible vendors.
"I make a spreadsheet for pertinent evaluation data to avoid confusion," said Simax Prototypes' Mick Yusko. "My process is very time consuming and labor intensive; however, it is much cheaper than choosing the wrong supplier to rely upon," he said, adding that he enters his zip code into a Google search and makes a list of five to ten possibilities, whom he then calls on the phone and evaluates.
"Our purchasing manager uses both referrals and an Internet search to find candidates," said Master Products' Jeff Walters. "Candidates must meet ISO requirements and undergo a personal visit by purchasing and quality control."
Some respondents said that if the vendors are local, they tend to want to make a visit. Ryan Shanks, owner of Logic Industries LLC, said that after he narrows the field, he sends out print packets and RFQs while trying to find past customers to talk to about their experience with that vendor. "If the place is local, I will visit the shop and talk to the people on the floor, look at what they're working on now, and talk to the guy quoting my job. We do some of our manufacturing in-house, so I have a pretty good baseline to keep our outside suppliers honest with."
Scorecards and a Pat on the Back?
Some call them 'scorecards;' others, 'report cards,' and still others, 'quality records.' Whatever their label, they add up to the same question: "Am I getting what I asked for?" Part quality is of utmost concern, and most respondents use some form of product/part inspection. Shane Anderson, manager of product design for Urban Canopy, said in the survey that "quality is paramount because failures due to manufacturing are unacceptable."
The OEM's prevailing concern for quality was confirmed by Marlin Steel's Andrew Ratner, who said that Marlin—a contract manufacturer—is evaluated on the basis of whether its product is of consistently high quality. "The dimensions must adhere to the engineering print they approve beforehand," he said. "The container has to be right every time. Our process of checking our work is so rigorous that a major automaker is asking other suppliers to measure their work against the check fixtures we produce and the review process we instituted."
Quarterly report cards for suppliers to Plitek, LLC are done with weighted values on quality, delivery, cost, and responsiveness, according to Helena Morges, the company's purchasing/material manager. "Suppliers are then rated as preferred, approved, or probationary," she said. "If a supplier is on probationary status [for] two or more consecutive quarters, we start the process of finding alternate suppliers."
Bob Hurst, project manager for TMI Inc., said he is extra cautious. "We closely monitor the first three deliveries before a new vendor is approved. After being approved, on-going deliveries are subject to our normal inspection procedures and monitored for timeliness."
The primary issue is quality, many respondents agreed. "We pay a little more for some products, but the risk of failures based on someone else's poor quality simply isn't worth it for us," said Tony Salemi, sales manager for Chicago Plastic Systems. "Sometimes, on-time delivery can be an issue, but again, a failed product delivered on time doesn't help anybody."
Ryan Shanks of Logic Industries LLC said it all boils down to three criteria: Did they meet their delivery date? Did they meet the surface finish spec? And, finally, are the parts dimensionally correct? "Of the three, the only one I will forgive any lapses on is the delivery date because I know that suppliers upstream of them can affect their schedule, just like they can (affect) mine, and there's not really anything we can do to stop it sometimes," Shanks said. "I won't deal with a company who can't hit dimension or surface finish spec consistently. I've got enough troubles, and dealing with re-work or back charging for parts that weren't made right to start with is something I don't want to deal with. One problem, I might let slide, but two problems from the same supplier, and they're done."
Managing a Product's Total Cost
Part of the evaluation process is whether or not a supplier was able to help its customer manage the total cost of the product. Since part of an OEM's total cost of a product is having parts delivered as promised without defects, a contract manufacturer has a significant role to play.
"We have supplier agreements with some of our vendors to help reduce cost, as well as face-to-face meetings with other vendors," said HITEC Sensor Solutions' Ron Suggs, referring to agreements to purchase a minimum annual amount to ensure faster delivery when parts are needed. "Suppliers do play a role in our requirements, particularly if their costs rise unexpectedly."
Chicago Plastic Systems' Tony Salemi said, "We look very closely at the soft costs of doing business. These are often overlooked and can amount to tremendous cost savings. Some examples include freight, extended payment terms, consignment inventory, near net shape, or custom material sizes. Most of our suppliers have been willing to work with us on these issues."
Lowering the total cost of products for its customers is something Marlin Steel prides itself on, according to Andrew Ratner. High quality and rapid turnaround help customers keep costs down, he said. "Foreign competitors are sometimes cheaper, but the wait times for delivery are often much longer and the quality of their product less consistent, forcing returns. When you consider total cost, our quick delivery, innovative design, and consistent quality save the client money and enable them to ship faster. Because delay adds cost, we're going to be the less expensive solution in the long run," Ratner explained.
Being straightforward comes into play with cost management, even when it means suggesting another vendor, said James Donnelly, owner of Armstrong Metalcrafts. "My suppliers help this best by providing real-world assessments of the costs of making a part. The best vendors are willing to talk through a project and give an honest appraisal instead of a bait-and-switch gambit. Sometimes they recommend a competitor because they know their competitor has a better match of machinery and cost structure to meet my project's needs," Donnelly said.
Positive reinforcement comes in many forms—a handsome award to place on a mantel, a plaque to hang on the wall, a luncheon, or maybe even a pizza party. Most survey respondents said they use some form of acknowledgement and reward for their outstanding contract manufacturers. Many times, some noted, the best reward is continued business or referrals.
"We do [rewards] through the report cards, and preferred suppliers will typically be awarded new business first," said Helena Morges of Plitek. And Jeff Walters of Master Products Company said that every year, they give quality awards to the top performers and buy lunch—usually pizza—for their plant.
Although Logic Industries LLC does not give out formal awards, Ryan Shanks noted that "I do like to tell the machinists and programmers that they've done a good job when they turn out particularly good work."
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