Procurement engineering: Wise design via global suppliers involvement

It’s an unreachable target that request a design engineer today to have all aspects knowledge to develop a fancy product under age of knowledge explosion. Technology and science has developping so quickly and unevenly in all corners of the world. New material, novel manufacture methods, innovative processes are poping up everyday and everywhere. How to design a product not only meet functional requirements but also cost effective and manufacturefriendly is really an insteresting topic but also challenge, especially under today’s tough business situation and complex global business enviroment. Obviously, procurement engineering could provide one of the answer on this aspect through early global suppliers involvement.

In present, majority of orgnizations still follow a typical way on product development. A product is just developed by an experienced design engineer or a team. Right material grade, optimized mechanical structure, and detail definition of features will be defined by he or she to meet all interface and function requirements. Some orgnizations may have  better way and to involve specific experts in their orgnization to make sure internal expertise knowledge and experience have been well integrated into new product development, typically like material expert,manufacture engineer, procurement, assembly engineer, or even service colleague. In most case, this could already good enough to make their product competitive and accetable in the market.

However,the tendency of industry development today is that, orgnization will only remain core competency in house, like assembly, design, while with more and more out sourcing scope, and extend global sourcing activities. This already happen or on happening on various orgnizations, like GE, Siemens, Boeing. No doubt this definitely benefit for whole orgnization, but also make orgnization weak on some aspects, especially manufacture side. So how to leverage external supply chain knowledge, including global supplier footprint into product development is one of key element to make sure a good product could be developed both in cost aspect and performance related as before. This is exact procurement engineering could bring impact as procurement interface to R&D.

How procurment engineering contributes to? Early supplier involvement in global wise to product development is the key, especially for an international business orgnization.

Below I explain why global suppliers involvement  on product development is so crucial. As we all know, for an international business orgnization,  to fully take advantage of low cost country manufacture is one of key lever for cost out, we so called global value sourcing (GVS). However, the most challenge we found is that suppliers in low cost country sometime can not fully meet “standard” requirements defined in our product. Benefit erosion is big and obvious. And this usually also lead to a long qualification period and lots of change review cost, even sometime to a frustrating situation by stopping global sourcing. You may think this is contributed to big capability deviations, but reality is that this more frequently just due to fail on some tiny design features, as all design features referenced from mature developed supplier which can not be fulfilled by GVS suppliers. So If we involve GVS supplier in design phase , it is easy to realize product GVS sourcing friendly and benefit from cost in maximum. Take an example, like machining tolerance, Europe suppliers have more elaborate management on their machine and process. So they could guarantee tighter level tolerance w/o additional cost, if our design just define the tolerance base on their practice, this will lead to a really barrier for global sourcing and make it difficulty or even impossible for GVS suppliers. So certain loosen tolerance and with GVS supplier capability in consideration could really benefit global sourcing. Of course, we should not sacrifice our product quality. the target is just to have enough good product to market.

In another aspect, more opportunity could be digged out by leverage global supply chain advantage. For example, rolling flat bar for milled blades, Europe suppliers have stricter requirement on flatness in order to reazlie one time fixture and machining, however for China supplier base, relax flatness on raw material while with additional rough machining (low cost) may more cost wise decision and with more board supplier selection. Another case I experience is that, one blade design has complex machining feature and frequently lead to deviation during manufacture, during China supplier workshop,  We identified optimized design feature both meet design and manufacturability requirement as this supplier is really experience on blade manufacture. In short, lots of good ideas or innovative ideas of manufacture could be expected from supplier who focuse on specific manufacture area, as they are handling not only your product but also from other customers. So talk with them means to extend our knowledge to a wider range and state of art technology.

And last, for different region country, there normally have local general industral pratice. If during design phase, we have sourcing strategy in mind, and integrate 2-3 key focus suppliers general practice rules from different region into our design would really benefit for cost and manufacturability. For example, right radiu value to avoid additional machining process, righ hole size to avoidspecial tool order, reasonable roughness to easier for quality control.. Etc.

As above expalined, early involvement of global suppliers could really benefit a lot and  so curial for a good design. As a procurement engineer, how can we do better on this area, below are some tips for reference:

Firstly, make sure suitable supplier nomination together with strategy buyer, taking commodity global footprint and strategy balance into consideration.

Secondly,orgnize serial workshops between design engineer and global supplier during product development process. Collect all valuble inputs with open mind, and take back.

Thirdly, supplier is not only supply components to you but also your business partner to contribute to your product development. Mutually interaction really matters.

Lastly, an optimized design definitely need close cooperation of a cross funtional team. Confliction definitely will be there from different suppliers and view, function requirements and sourcing strategy should be two of  key sides keep in mind.

This entry was posted in General and tagged , , , on by .

About Eric Wu

- Master degree on material process engineering -10+ years experience on manufacure and supplier quality management on energy and aero-engine business -Now, deep engagement on cost value engineering and procurement engineering, with focus on design optimization and cost out on supply chain -Systematic cost and value analysis methodology + complex problem solving skill -One 7 year old boy, always try to do body exercise but always have excuse to give up.

Leave a Reply

Your email address will not be published. Required fields are marked *