FINDING THE RIGHT FIT

Transcription

1 FINDING THE RIGHT FIT The Six Key Considerations When Selecting A New Fastening Partner A Field Publication

2 TABLE OF CONTENTS INTRODUCTION 1 FINDING THE RIGHT FIT The Six Key Considerations When Selecting A New Fastening Partner FASTENER PARTNER VS. FASTENING PARTNER 4 APPROACH TO VMI SYSTEMS NO TWO ARE THE SAME 6 TECHNICAL EXPERTISE AND EXPERIENCE 8 SUPPLY CHAIN MANAGEMENT 10 TRANSITIONING TO A NEW PARTNER 11 TEAM FIT AND COMPANY CULTURE 12 WHO IS FIELD? 13

3 INTRODUCTION FINDING THE RIGHT FIT The Six Key Considerations When Selecting A New Fastening Partner Thanks to advances in technology, the globalization of commerce, and the accumulation of fastening knowledge over the past 25 years, there s never been a better time to consider new partners in fastening. It s also never been so critical that you choose the right one. From new product research and development to product assembly and warranty claim management, a fastener partner influences virtually every department and facet of an organization. Far more than a Class C commodity or part, fastening is the proverbial glue that holds together the modern-day manufacturer. As a result, it s become important to find a partner who can help you navigate global supply chains one with extensive fastening industry knowledge, and one who understands how to efficiently leverage new technology. With more than 20 years of fastening supply, distribution, and inventory management experience, and as a leading participant in various industry associations, including the National Fastener Distributors Association, Field has worked with tens of thousands of companies who have gone through the process of researching, vetting and selecting a new fastener partner. We developed this guide to help you make the best decision for your organization by offering insights into industry-wide best practices, including how to properly conduct a search, key fastening processes you should be utilizing in your organization, and proven strategies for improving everything from VMI systems to global supply chain management. Whether your search is just beginning, or you ve already narrowed your consideration set to a few potential partners, this guide was created to offer something for anyone in the midst of making this important transition. WHY LOOK FOR A NEW PARTNER? Any number of triggers can set in motion the search for a new fastener partner. Based on extensive customer interviews across the industry, the top reasons manufacturers initiate the search for a new partner include executional issues with current suppliers, cost, consolidation, and INTRODUCTION 1

4 a top-down organizational re-emphasis on lean manufacturing programs. Aside from these more evident triggers, many respondents also stated secondary drivers such as a desire for their suppliers to go beyond day-to-day tactical issues in helping solve longer-term issues like forecasting and year-over-year cost-reduction goals, and a need to ensure current suppliers are employing the latest and most effective processes and techniques. STRUCTURING YOUR SEARCH When starting your search, begin with a broader consideration set of 5 6 vendors compiled through online and offline research, talking with colleagues, referencing industry publications, and checking with industry resources such as NFDA. HOW MANY INDUSTRIAL SUPPLIERS ARE VETTED DURING THE AVERAGE VENDOR SEARCH PROCESS? 64% COMPARE 2 3 SUPPLIERS BEFORE BUYING 20% COMPARE 4 5 SUPPLIERS BEFORE BUYING 16% COMPARE OTHER AMOUNTS BEFORE BUYING Graph Source: ThomasNet Publishing, 2012 FIELD NOTE: ON AVERAGE, TWO-THIRDS OF MANUFACTURERS WILL NARROW A BROAD CONSIDERATION SET DOWN TO 2 3 SUPPLIERS FOR A MORE THOROUGH REVIEW OF THEIR ORGANIZATION, OPERATING PHILOSOPHIES, AND THE RIGHT FIT. INTRODUCTION 2

5 The following criteria, compiled through an analysis of previous manufacturers searches, can be used as benchmarks to narrow down your consideration set to the top 2 3 vendors. Prospects should be evaluated against all criteria in some way, but your scoring system should take into account the relative importance of each bucket. A vendor s operating philosophies and approaches to cost savings will drive every other aspect of their organization and therefore should be given the most weight. THE MOST IMPORTANT CONSIDERATIONS WHEN CHOOSING A NEW FASTENING PARTNER I. ORGANIZATIONAL APPROACH TO COST SAVINGS Ability to identify and produce both immediate and long-term cost savings Willingness to guarantee cost savings II. VENDOR MANAGED INVENTORY EXPERIENCE AND ABILITY Ability to ensure consistent availability of parts Capacity to leverage data produced from a VMI system Advanced technology and usage know-how III. AVAILABILITY OF TECHNICAL RESOURCES Engineering and design support Material and lab capabilities Training capabilities THE IDEAL FASTENING PARTNER IV. SUPPLY CHAIN MANAGEMENT AND QUALITY PHILOSOPHY Large supply chain foot print (domestic & import) Ability to secure competitive price-per-part Proficiency in managing lead times Quality throughout organization (internal & external) V. ABILITY TO HANDLE SUPPLIER TRANSITIONS Seamless execution VI. LEADERSHIP AND COMPANY FIT Veteran leadership Global reach and flexibility Financial stability (D&B, Z-Score) Collaborative culture Graph Source: Field, 2013 Once you have narrowed down your consideration set to your top choices, build a cross-functional team of stakeholders to participate for the remainder of the vetting process, including at least one member from the operations group, supply chain management, and the engineering team. If applicable, also include a member from your lean department to ensure bigpicture efficiency remains in focus. INTRODUCTION 3

6 FASTENER PARTNER VS. FASTENING PARTNER One of the foremost goals for many organizations, when talking to new fastener suppliers, is securing a more competitive price-per-part (PPP). These savings are easy to quantify, but in focusing on the parts alone, organizations frequently miss more significant opportunities to streamline their process, identify additional cost savings, and make the organization more profitable. CONSIDER THIS. The cost of physical fastener parts represents just 20% of a typical organization s total cost of fastening. Put another way, if you spend one million dollars purchasing fasteners over the course of a year, your organization will likely spend four million dollars on the overall fastening process. While competitive PPP is an important variable in the total cost equation, it s actually more important to focus on the PPI the price per installed. The PPI includes the costs of the fastener, associated carrying costs, design costs, installation of the fastener on the assembly line, assembled product scrap, and knock-on costs due to part failure. Sustainable, continuous improvement goals and long-term cost savings cannot be achieved by suppressing price on a particular screw alone. True, long-term cost reductions (and eliminations) come from redesigning the assembly workflow or product design to use a completely different component or manufacturing process. PPP VS. PPI EXPLAINED FIELD NOTE: ALWAYS STIPULATE THAT ANY IMMEDIATE COST SAVINGS PROMISED BY YOUR VENDORS ARE CONTRACTUALLY GUARANTEED. 20% FASTENER COST 80% FASTENING COST Joint Preparation Labor Assembly Equipment Inspection Scrap & Rework Other + FASTENER COST + PROCUREMENT COST + ASSEMBLY COST + PRODUCT SCRAP AND WARRANTY CLAIMS = PRICE PER INSTALLED (PPI) Graph Source: Field, 2013 FASTENER PARTNER VS. FASTENING PARTNER 4

7 By selecting a fastening partner who subscribes to a PPI philosophy, it s possible to realize savings in the range of 5 20 times the price of the fastener itself. IDENTIFY THE DIFFERENCE IN PARTNERS BY LOOKING FOR THESE BEST PRACTICES: Organizations focusing on a PPI philosophy will be able to identify and produce far more significant cost savings versus those with a PPP philosophy The right partner should be confident enough in their abilities to contractually guarantee immediate cost savings The right partner should be able to identify both significant immediate and ongoing cost savings through continuous improvement programs FASTENER PARTNER VS. FASTENING PARTNER 5

8 APPROACH TO VMI SYSTEMS NO TWO ARE THE SAME Vendor Managed Inventory (VMI) programs have come a long way from when they first started appearing on manufacturers floors in the late 80s and early 90s. While the term VMI is now common in the industry, the fact remains that no two systems are alike. FIELD NOTE: A GOOD VMI SYSTEM MEANS YOU SHOULD NEVER RUN OUT OF PARTS. VMI systems can take on many different forms and characteristics, from simple pen-and-paper systems to far more robust ones based on proprietary hardware and software. Below is a quick run-down of the various VMI replenishment systems. REPLENISHMENT METHODS Bin Stocking VMI Program Utilizing barcode and scanner technology, a Field VMI Technician visually audits your inventory and creates real-time orders for items below their minimum quantity. In-Plant Store The In-Plant Store VMI system is ideal when your facility has an active, daily, on-site inventory management coupled with on-site consignment inventory. As an add-in feature of our typical VMI program, Field offers vendor inventory warehousing and maintains staff within your manufacturing site. Point of Use Material handling costs, errors and stock-out rates increase as materials move throughout the production floors and as more hands directly touch the materials. Point-of-use replenishment focuses on maintaining inventory as close to the point at which it s used as possible. This promotes greater efficiency, as inventory is readily at an assembly station when it s needed. KANBAN This system continuously supplies components, parts and supplies to specific workstations where and when they are needed. KANBANs are visual cues that authorize the replenishment of inventory at a specified workstation in a pull environment. Whenever a piece of KANBAN inventory is consumed, a replenishment action is triggered. EDI Electronic Data Interchange (EDI) is a system-to-system method of managing inventory in which all actions are carried out automatically, not requiring employees to be directly involved. Strict parameters are entered into the customer s system, which then syncs with Field s information and provides a flawless method of replenishment without involving hours of labor. Consignment Field holds inventory at a customer s location and retains ownership of the inventory until the inventory is actually consumed. Payment on the inventory is not made until after consumption. This is useful for customers who do not want large investments tied up in inventory that may not be used immediately. Camera A stocking location is set up within view of a Field-installed camera. Field monitors the stock remotely and orders parts/adjusts stocking levels as necessary. Networked Scales A relatively new method of APPROACH TO VMI SYSTEMS NO TWO ARE THE SAME 6

9 managing inventory, a networked scales system enables Field to have a real time read on the weight and in turn quantity of each inventory bin and shelf throughout a facility. Restocking parameters are pre-entered for each bin, and Field refills bins when they hit their respective restocking levels. prove to be little more than another bin stocker. An experienced partner and VMI technician understands not just how a VMI system works, but why it works allowing him/her to use data and analytics to make real-time decisions regarding purchase orders, forecast for future demand, and make continuous improvements to a system that is constantly getting smarter. A good partner will have experience implementing all of the various types of VMI systems and will be able to recommend the best option for your organization based on part volumes, facility layout, and manufacturing and assembly processes. By tracking part volume fluctuations, identifying obsolete parts and parts opportune for cost reduction, the right VMI program can dramatically reduce your procurement and program costs, optimize total inventory levels, and lower overhead all while FIELD NOTE: THE RIGHT VMI SYSTEM WILL BE ABLE TO PROVIDE REAL-TIME COMMUNICATION WITH INVENTORY MANAGERS THROUGH THE USE OF ON-SITE AND REMOTE TECHNOLOGY. Beyond selecting the right VMI system, the best systems will only be as good as the people and the technology behind them. From full-time to part-time partners, on-site representatives to remote management, your VMI partner should be as flexible as you need in meeting the needs of your organization, and able to complement the strengths as well as shore up any weaknesses that may exist within your team. Perhaps most importantly, when it comes to VMI increasing turns, improving availability and creating manufacturing process efficiencies. LOOK FOR THE FOLLOWING BEST PRACTICES FROM YOUR PROSPECTIVE VMI PARTNERS: The right partner will have a firm understanding of the various types of VMI systems and the combination that would be best for your organization The right partner will be able to help your purchasing/sourcing team make better and more informed decisions through the use of data and technology The right partner will be able to build you a VMI system that is constantly getting smarter The right partner will be able to execute your VMI program anywhere in the world personnel, look beyond partners who would APPROACH TO VMI SYSTEMS NO TWO ARE THE SAME 7

10 TECHNICAL EXPERTISE AND EXPERIENCE The most successful long-term fastening vendor relationships are those built around a vendor s ability to examine and deliver ongoing savings to PPI, not just short-term incremental savings to PPP. reduction and product improvement opportunities. Your fastener partner should be able to review all product prints and all new product designs to ensure top-tier fastening methods and fasteners are being used. When evaluating whether a potential partner thinks in terms of PPI vs. PPP, consider their engineering expertise and experience in operations. Specifically, focus in on two key facets: their engineering lab and equipment, and the engineering expertise of not only their core engineering team, but of each team member. Cost-savings opportunities will more often Assembly Line Reviews. By observing your assembly processes, your fastener partner should be able to identify improvements in fastening techniques that will reduce costs and scrap, as well as improve work safety. As new assembly techniques and technologies emerge, your partner will be able to make continuous improvement suggestions. present themselves during the everyday interaction of managing an account, and during assembly line reviews, than be born in the engineering lab. Product Teardowns. In conjunction with an assembly line review, your partner should be looking for cost-reduction opportunities and quality FIELD NOTE: IT S IMPORTANT THAT ENGINEERING EXPERTISE IS PERVASIVE THROUGH AN ORGANIZATION, NOT SIMPLY HELD WITHIN A FEW CORE ENGINEERS. improvements, disassembling and evaluating the product with each application. Failure Analysis. Your fastener partner should be able to provide a more robust fastening method by conducting an analysis of any failed samples ENSURE ALL POTENTIAL PARTNERS HAVE THE ABILITY AND EXPERTISE TO EMPLOY THE FOLLOWING VALUE-ADDED ENGINEERING WITH REGULARITY: Fastener Consolidations. Regularly review the number of different fasteners in use. As a general rule of thumb, start with the highest volume parts and those parts that have recently experienced an increase in demand. New and Print Product Reviews. A new design to identify the probable cause. Common methods include evaluation of dimensional and metallurgical characteristics, evaluation of the fracture surface, and other attribute and performance testing. Applications Problem Solving. Your partner should be available when called upon to help identify specific problem areas, evaluate them, conduct performance testing, and develop detailed recommendations. review is the best time to evaluate fasteners for cost TECHNICAL EXPERTISE AND EXPERIENCE 8

11 Consultations on Assembly Equipment and Techniques. Your partner should be able to make recommendations on the feeding, orientation, and installation of fasteners. Specific areas to focus on include making recommendations for design of the mating parts and torque control methods. YOU CAN DETERMINE IF YOUR FASTENING SUPPLIER IS SKILLED IN ENGINEERING COST REDUCTION BY SEEING IF THEY ARE FOLLOWING THESE BEST PRACTICES: The right partner will regularly employ all of the aforementioned engineering programs to drive down your total cost of fastening The right partner will work directly with your supply chain and R&D engineering teams, providing them with recommendations, solutions, validation and ongoing trainings The right partner will perform regular materials testing free of charge The right partner will proactively engage in continuous improvement programs and engineering line reviews to identify new costsaving opportunities TECHNICAL EXPERTISE AND EXPERIENCE 9

12 SUPPLY CHAIN MANAGEMENT With the rise of globalization over the past decade, supply chains (and their management) have become more complicated than ever. Similar to how no two VMI systems are alike, no two supply chains or supply base management philosophies are the same. That s why it s important to understand how a prospective partner chooses its suppliers, and what percentage of those suppliers are domestic vs. international, and preferred vs. non-preferred. the risk of supply chain interruption, permitting a distributor to maintain better quality standards. It s also important to gain assurance from your fastener partner that new supplier relationships undergo initial and ongoing quality due diligence. Will your partner review all prints and specifications before passing them on to the supply base? Regular, documented check-ins with suppliers should be the norm, especially for international suppliers. FIELD NOTE: YOUR FASTENING PARTNER IS ONLY AS GOOD AS THEIR SUPPLY CHAIN. HERE ARE SOME BEST PRACTICES TO KEEP IN MIND WHEN VETTING A PARTNER S SUPPLY CHAIN OPERATION AND MANAGEMENT PHILOSOPHY: The right partner will have the skills, depth and There isn t necessarily a right or wrong mix, but consider the end objectives your partner has in mind when making decisions. An effective supply base will be able to minimize the total cost and inventory, while delivering the highest quality parts, and at a competitive price wherever and whenever you need them. One guiding principle to keep in mind is that long-term relationships with a set number of preferred suppliers can minimize breadth of internal processes and controls to get you any part, of the right quality, at the right time, in the right place, and for the right price The right partner should have a preferred suppliers list of both domestic and global suppliers The right partner will review prints before sending them to the supply chain The right partner will measure with regularity your suppliers performances SUPPLY CHAIN MANAGEMENT 10

13 TRANSITIONING TO A NEW PARTNER Maybe it s the misconception that a transition has to come with lost profit and downtime on the assembly line, but fear of going through a transition is among the most significant obstacles to making a muchneeded switch. That fear, however, is unfounded if you have, or have found, the right partner. are the ideal time to assess all assembly & VMI processes to ensure cost-saving best practices are being employed. This is the primary reason why cross-functional teams are so desirable during a transition. Fastening experts can quickly analyze the fastening process and identify significant multiples of cost-savings, frequently from reductions in piece FIELD NOTE: WITH THE RIGHT PARTNER, YOU SHOULD EXPERIENCE ZERO DOWNTIME DURING A TRANSITION. prices alone. TO EVALUATE THE TRANSITIONING CAPABILITIES OF A PROSPECTIVE PARTNER, CONSIDER THE FOLLOWING BEST PRACTICES: The right partner sees transition as an opportunity. As such, they won t just execute a seamless transition of every part in your facility, but they ll also use the event as a springboard empowering your team to make more effective and efficient decisions moving forward. An effective transition typically starts with a dedicated, cross-functional team headed up by a single point of contact. It is this team s job to draw up a plan for every part, and to ensure the transition is seamless. In addition to assessing The right partner should have a transition plan and a plan for every part specific to your business The right partner should provide you with a single point of contact from start to finish, and a dedicated multi-functional team throughout your transition, with few to no other obligations The right partner will be able to identify immediate cost savings by not only sourcing competitive piece prices, but also by reviewing prints as well as assembly and VMI processes all parts, prints and finished products, transitions TRANSITIONING TO A NEW PARTNER 11

14 TEAM FIT AND COMPANY CULTURE It may not seem critical to your decision, but there is much to be gained by a healthy fit between your organization and your fastening partner. After all, in the most successful cases, this partner becomes an extension of your operations, sourcing and engineering teams. And when it comes to fastening solutions, you ll come to rely on their people as much as you rely on your own. This is why it s a good idea to take a little time to understand the business backgrounds, operational drivers, and cultural characteristics of the organizations and teams for those partner companies in your consideration set. There is no substitute for meeting a team in person, and the best way to do this is to schedule a personal tour of their headquarters or local facility to meet their people in person. Call the references personally. Talk to the people who interact with their key contacts. Ask them about their experience and compare notes across finalists before making your selection. CONSIDER A FEW OF THESE BEST PRACTICES WHEN ENSURING A GOOD FIT BETWEEN ORGANIZATIONS: The right partner will have a good deal of current clients whose companies are similar in size and make-up to yours The average length of employment for their current team can be a good indication of employee satisfaction The right partner will present and commit to you the actual team not a pitch team sent in to win it that will work on your business Finally, a true partner should be able to provide any number of references of satisfied customers. TEAM FIT AND COMPANY CULTURE 12

15 WHO IS FIELD? More than parts, Field is a full-service, data-driven, on-demand engineering partner with a unique technical approach to inventory management of, and supply chain solutions for, fasteners and other Class C items contractually guaranteeing the lowest total cost in the industry. FIELD S EXPERTS ARE PASSIONATE ABOUT FASTENING, AND THEIR DEDICATION TO EFFICIENCY AND COST REDUCTION ENABLES ORGANIZATIONS TO RUN LEANER AND MORE PROFITABLY. FIELD HAS HELPED TENS OF THOUSANDS OF ORGANIZATIONS: Spend less time purchasing fasteners and more time working on their operations Spend less time worrying about and validating fastening/joining methods and more time designing products Reduce inventory levels and supply base through their best-in-class supply base and innovative inventory management programs Field s extensive fastening expertise proudly extends deeper than a chief engineer or two. It runs pervasively throughout the entire organization. From the company s founding partners to outside sales, its VMI technicians and account managers to the actual engineering group, no one knows more about fastening than Field. In fact, thanks to Field s experienced staff of experts and innovative approach to smarter fastening, the company has yielded 19% year-on-year growth since 1990, making them the right fit for manufacturing companies of all kinds. For more information about Field, contact: Adam Derry, Sales Team Leader AdamD@fieldfastener.com WHO IS FIELD? 13