Challenges

Background

Global  manufacturers are more dependent than ever on contract manufacturers to provide the custom parts they need.  This dependency means manufactures are at greater risk and require  a greater level of  buyer/supplier collaboration.

Custom part buying is dynamic

 Outsourcing  thousands of custom manufactured parts is a dynamic process where changes can have  an adverse affect on your bottom line.  Recent events have shown how supply can be interrupted by natural disaster or financial  failure.   Commodity and destination cost volatility is an ongoing problem and can result in price increases and surcharges.

Hard tooling facts

Depending on the part, hard tooling can dictate a lot about the existing parts manufacturing process.  This is particularly true of formed metal, molded  plastic and cast parts.  A suppliers material usage, labor cost, equipment, and overhead are  often directly linked to the tooling. Tool condition , location and ownership can change during the product life.   Many manufacturers lose track of these tools after they are approved and paid for. In most cases, buyers cannot afford the delays and cost associated with retooling parts  therefore, new suppliers must have access to accurate tooling information in order to take over existing parts . 

Conventional systems limitation


 It takes a special system to manage existing custom parts buy.   New product purchasing practices do not work in this changing environment.  Part life cycle changes occur after orders are written and production supply begins. Static spreadsheets  and  conventional inventory control systems simply cannot provide the information and analysis  of a well  designed supplier information database.   


Manufacturers are experiencing supply chain disruptions at an increasing rate due to natural disasters and business failures.



83% of companies are experiencing cost increases due to raw material uncertainty.