Five steps to lower cost and improve outcomes in the sourcing of machined parts
In the effort to reduce risk and mitigate costs associated with adding / changing suppliers of machined parts including; engineering, supply chain, or quality department time its important to have a strategy when implementing a new supplier. There are many aspects to the true “cost” of sourcing machined parts with some being easily measured while others can be hidden in rework, extra freight costs, late delivery, or the cost of lost business due to undetected poor quality. If you are concerned with minimizing cost in your supply chain in addition to ensuring quality, on time delivery, competitive prices, and excellent customer service these five steps will help you accomplish this with your machining suppliers:
- Provide adequate information in your requests for quotes (RFQ’s)
- Select suppliers that have the capabilities to machine your parts
- Allow ample time for your first order
- Communicate openly and regularly
- Be open to suggested changes concerning non-critical requirements
Each of these steps is explained in more detail so that the task of developing a long-term partner is cost effective, repeatable, and productive.
#1. Provide adequate information in your request for quotes (RFQ’s)
Providing detailed information will allow for more accurate “cost” modeling resulting in more firm quotes. Providing annual volume expectations and detailed production information including detailed 2-D & 3-D drawings, supporting documents such as forging or casting drawings, as well as any relevant material or process specifications is valuable. When forgings or castings are involved, it is also very helpful to have a sample part available to enable the supplier to better understand the necessary fixturing or tooling that maybe required. You should also tell your supplier about any manufacturing processes that have previously been developed, especially if the part is complex. Uncertainty creates risk, which will be priced into a quote. By eliminating as much uncertainty as possible, the supplier can produce a quote that is fair and accurate: which usually means less expensive.
#2. Select suppliers that have the capabilities to machine your parts
Be certain that selected machining suppliers have the capabilities to machine parts efficiently, uses a disciplined Quality Management System (QMS), and has a history of on-time delivery. A supplier can provide a low quote, but if they do not have modern well maintained equipment or the QMS (i.e. ISO 9001, AS9100, etc..) to efficiently produce the part they will be forced later to increase the price, or to take short cuts which compromise quality and can lead to missed delivery dates. An escaping defect compromises quality and causes additional costs. The rule of 10 states that a $100 defective part which escapes a supplier, will cost you $1000, and if it escapes your quality control it will cost your customer $10,000.
#3. Allow an ample amount of time for your first order
Do not rush the first order to a new supplier and provide the necessary support to ensure success. The first order with a new supplier is the opportunity to develop expectations. It is also the time to allow suppliers to work out the production process. A communications link should be opened between quality departments to review critical issues, including “critical to quality” (CTQ) dimensions. Ideally, a “first article” should be requested to ensure there is no misunderstanding regarding the part characteristics. Clear specifications regarding marking, packaging, and shipping should be reviewed if they are not in the purchase order. Depending on a suppliers backlog the process for completing the first order could take 6-8 weeks.
#4. Communicate openly and regularly with your selected machining supplier
Develop a sound communication process with suppliers. Poor communications can lead to missed orders, quality problems, and a lack of supplier capacity when it is needed. The purchasing department should provide sufficient information to the supplier’s customer service department to ensure needs are met. This should include a copy of the latest revision of drawings for parts ordered and revision numbers should be identified in the purchase order. It should also include summaries of parts on order, and forecasts of future needs when available.
#5. Be open to suggested changes in non-critical requirements
Expecting suppliers to meet rigid requirements when they are not required for the performance of the part will drive up machining costs and prices. Flexibility and openness to making changes to certain part specifications that won’t negatively impact quality can create opportunities for significant savings. Often the best suggestions for quality improvements come from the people doing the work. Take advantage of the knowledge and experience your supplier’ machinists have acquired by giving their suggestions the appropriate consideration.
Overall, selecting quality oriented manufacturing partners with the right capabilities, standardized processes, and a robust quality management system will help ensure that there manufacturing processes yield a result that meets or exceeds your expectations. To achieve success don’t be shy about review as much of the of the supplier’s content including their website, quality manual, and responses from a supplier quality questionnaire. A reputable supplier will welcome your requests for information or even encourage a visit and plant tour.