We UNDERSTAND Your Challenges
Supplying demanding OEM’s presents you with many challenges:
- Meeting stricter quality requirements. With customers expecting perfection and product traveling further to reach certain regions, even the tiniest quality issue can have dire consequences. The pressure is on you to be 100% conforming without adding inspection services.
- Satisfying cost reduction mandates. You’ve seen OEM’s use a number of different approaches to secure a price giveback, including annual productivity improvements, planned cost savings pull-ahead’s, LTA’s, business plan contributions, and engineering VA/VE reductions. Sometimes they just make you absorb additional costs on your own which means less profit for you
- Avoiding pricing conflicts. Raw materials comprise a significant portion of your product costs, and those prices can’t be controlled, or often even anticipated. So when metal market instability occurs it’s time to pick your poison: customer bad will (from increasing your piece prices) or reduce your margins (if you absorb it).
- Providing greater delivery flexibility. OEM demand volatility is now your problem. Customers unwilling to commit to forecasted volumes are still expecting unrealistic delivery lead times – especially for exported parts. It seems harder than ever not to hold extra inventory.
- Reducing product liability costs. With heightened levels of supply responsibility you’re expected to pay for downstream clean-up costs if quality spills are tied to your products. But if your suppliers don’t make this same commitment you’re now bearing the risk of their nonconformance, as well as your own.
- Dealing with communication issues. Guarded, vague, incomplete, and even misleading communications that are slow to arrive can quickly escalate a supply issue into a full-blown production crisis for your customers.
- Feeling pressure to source components off-shore. Sourcing off-shore carries risk, including longer lead times, higher inventory carrying costs, higher freight costs, higher obsolescence costs, higher cost of quality, higher commodity price risks and higher stock-out risks.
We understand the pressure you are under, and can help you set yourself apart from the competition.