It finally happens. A broken supply chain, a non performing vendor, a price increase, and the directive comes down to find a new supplier. The first instinct is to gather up the prints and go shopping, but there is a lot more to doing it with success.
The first and most important step is to get your hands on the part you have been buying. Fabricated metal products evolve over time. Sometimes these changes are kept track of and are reflected in the revision level of the blueprint, but many times they are not. Over time, small changes add up and in some cases the part you are buying is “NOT to Print”. In fact, with some changes over time to mating parts, a part made to print may not even work. Your new supplier will be screaming “it is to print” and the end user or production is saying “it doesn’t work”. Some of these changes may have been made to lower cost. Woe be to the new supplier trying to hit a cost model doing one more operation than is needed to make a part better than it needs to be. There are truly three different parts in play when resourcing. The part you are making now, the part that is to the letter of the blueprint, and the part your end user wants to buy. Making sure they are all one and the same is critical.
So let us assume you are buying a part made to print with no exceptions. Your next stop is to the quality dept looking for a history of any rejections related to blueprint conformance. Why? Because your new supplier needs to know. This is “tribal” knowledge that is rarely transferred, yet is critical to a new supplier not repeating the same mistake. Here is an example: A long term purchased part has a nut located and set in place on threaded rod with Loctite. An RFQ is sent out with the original print but no sample part. The original print calls out a Nylock nut treated with a coating that puts heat into the nut. In practical use the Nylon embrittled and failed to work. The end user went to a regular nut with loctite. This was never noted on the print. Without a sample the new supplier repeated a very costly mistake that likely was documented in a quality document that was never supplied. Samples of current production and an understanding of past quality issues is critical to getting a good quote from your next resource. More importantly, it will ensure a seamless transition to your new supplier by exactly communicating expectations.
The next area to consider is understanding of all the processes that are currently used to produce the part. Metal fabricators tend to process parts around the suite of equipment they have. Sometimes that process has become somewhat proprietary in the mind of the supplier. Sometimes this is as easy as going through the original submission and verifying the current process reflects just that. I can tell you from experience a manufacturer getting a visit from purchasing to walk through the production process is a wake up call to losing the work. Once again, knowing how it is being done might help a new supplier to find efficiency in a better process or suite of equipment. That kind of change will have you looking for the unintended consequences. Another consideration is how process affects appearance. Plating and surface coatings done to the same spec in separate plants will look different. I have seen rejections of re-sourced work simply because “they do not look the same and my customer will not take them”. It is critical to know the processes that make your part and to understand any long term knowledge that will help the new supplier succeed.
Knowing what you are making and how it is made leads to, “how many do we have?”. When changing suppliers, getting an adequate “bridge run” to insure an adequate supply of parts is a common failure. Manufacturing process development is time consuming and ALWAYS made worse by time pressure. Your new supplier is going to find all the problems someone else did long ago if you can’t support them with what they need to know. If you are in a controlled resource scenario, it means you have an ongoing supply of product and can source new product in quantity for a seamless transition. This is the exception, not the rule. More typically, the new vendor will be under time pressure to get going. It should be easy to understand that transferring all that “tribal knowledge” to a re-source supplier is critical to saving time and not repeating mistakes. If at all possible you must have the new supplier prove conformance and performance prior to leaving the old source. There is no worse person to call than a supplier who was replaced by someone who failed. Let me repeat that one. The “Epic Fail” of re-sourcing is to have to go back from where you came. It costs you money every time. So give the new source all the knowledge you have and make sure they can perform before divorce papers are served, if possible.
Now that you have all the knowledge and are sharing it with sources there is another consideration. If we are re-sourcing old work, you know what you have been paying and what you want to pay. For some reason, most companies treat this as some great secret and send RFQ’s without any guidance or targets. My guess is that is done just in case some new process lowers cost 20%. That almost never happens. It is much easier for a manufacturer to find profit in process with a target price. Target prices drive timely and accurate quotes much more often than “blind price” quotes. No quotes come quicker. If you have done your homework on process and get an RFQ with a sample, a drawing, and a target to your vendor, re-sourcing can be done with a minimum of pain.
When re-sourcing work keep in mind:
What are we buying now and is it to print? Have we identified those things critical to supplier success and communicated them? Do we have enough product on hand or flowing to account for new development? Have we driven an RFQ with a realistic target?
At Monroe Engineering we are seeing a lot of re-sourcing going on for multiple reasons. The considerations I mention here are from hard lessons over time. We have resourced over 5 million dollars of manufacturing from there to here and here to there. I can attest to the fact that when approached by a partner sharing everything they know, we save time and have a successful outcome.