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16 CONNECTORS
WORKING fOR a
WIN-WIN deal
Developing a mutually beneficial relationship
with suppliers helps buyers obtain the best deal
for their company. Hypertac's commercial
manager, Glenn Henderson, explains how this
relates to the aerospace and defence industries
Most companies that customers adopt these kinds of approaches. Since this requires
expect to work analysis into demand trends, it allows us to flow down a greater
Hypertac commercial manager, Glenn
together long term, depth of information to our supply chain and thereby improve cost
Henderson
understand the and availability.
concept of 'win-win'
and seek to ensure
designer savings
that both parties mutually benefit from the relationship.
Most customers spend heavily in the area of design and engineering
The financial viability and success of the supplier is important to
and, of course, they involve themselves heavily with Hypertac's
the buyer and vice-versa. Generally, purchasers of custom solutions,
engineering team when developing new solutions.
consider the total cost of acquisition, rather than just the price, but
it's fair to say that the current economic situation means many buyers
Very little time is set aside however, to work on improvements to
are still focussed on price when they negotiate an order or contract.
legacy products that could potentially yield significant savings. The
nature of the industry and the potential need to re-qualify products
Here we look at some of the common buying behaviours that apply
makes attention to older products a low priority; but there is a
in this sector.
significant opportunity to make savings by re-engineering mature
products which is currently being missed.
Cost-down long-term
Long range cost-down targets are frequently set by customers, often
Cut the contract
running out over several years. Sophisticated procurement teams
Over the last three years we have seen a greater emphasis on putting
often have specialists within their ranks who can assist their supplier
in place detailed frame agreements that fully encompass the trading
to develop process improvements that may reduce cost.
relationship.
This is an approach readily embraced by Hypertac. It is very
Overall these agreements are desirable in that they potentially put
powerful to have fresh eyes look at often mature supplier processes
an end to the ‘battle of the forms’ should disputes arise. Contracts,
and provide fresh input into potential cost improvements. It is an
however, frequently include clauses related to penalties, IPR,
approach that several Hypertac customers have taken, and in the
indemnities and arbitration that would be unacceptable to most
spirit of mutuality, we have shared any resulting gains.
medium to large supplier companies. Including clauses that are likely
to be contentious leads to drawn out and non value-adding
lean purchasing
discussions before contracts can be finalised.
Over the last five years there has been a significant improvement in
Similarly, to safeguard their interests, buyers often look to flow
the way most OEMs plan their production, and in their general
down terms from their customers to their own supply chain, which
logistical capability. Most have adopted lean manufacturing and this
often leads to contracts containing irrelevant clauses.
in turn places emphasis on purchasing departments to reduce
inventories and ensure their supply chain is 100 per cent reliable with
Supply chain savings
respect to delivery.
Despite the take up of lean manufacturing concepts, most sub tier
If we consider how long kanban and other ‘pull’ concepts for
manufacturers in the aerospace and defence supply chain work with a
scheduling deliveries have been used in industries like automotive,
combination of one-piece flow and batch oriented manufacturing.
pharmaceutical and retailing, it is surprising how undeveloped these
The finished item may be manufactured with one piece flow, but
methods still are within the aerospace and defence industries.
lower level, lower cost, common components will be manufactured
Over the last five years we have witnessed more of our OEM or purchased in batches.
MaRCH 2010 electronics-sourcing.eu
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