Launching new products takes much more than a good design. Qualifying suppliers, managing downstream processes and coordinating the moving pieces can quickly become an arduous and time consuming responsibility. Too often companies try to drive costs out of their products by managing the purchasing of goods and services with internal man power instead of fully leveraging the right suppliers and the strategic relationships they already have in place.
A primary contributor of the do-all approach is evaluating product cost as the sum of its parts when in fact many hidden costs loom under the surface. Perhaps more importantly is that hidden opportunities exist as well. Asking too much of those performing the procurement activities creates oversites of cost saving opportunities and increases the likelihood for supply disruptions down the road. Whereas leveraging and enabling the right suppliers to do what they do best can save time and open doors for new perspectives.
Finding like minded suppliers who are familiar with your products and their applications is one of the easiest ways to not only smooth out purchasing but bolster your engineering department. A good manufacturer should be willing and able to explain the cost drivers in their processes and suggest potential opportunities to reduce cost without compromising performance. As a Sales Manager at a contract manufacturer I always appreciate open ears and additional insight into a project because it opens the door for my team and I to provide more than just a price for a part on a print. It is the buyers with a good understanding of their parts and willingness to communicate that come out ahead.
So if you’re a procurement specialist where does that leave you? What approach should you be taking when engineering drops a project on your desk? How do you determine a starting point? And how do you identify those suppliers that are willing and able perform not only their internal specialties but manage other up or downstream components as well?
To learn more about methods and strategies on identifying and getting the most out of suppliers click the link below to download our E-book Simplifying Your Supply Chain.