ESE March10 pg16_17_Layout 1 26/02/2010 14:22 Page 2
CONNECTORS17
So, items such as turned parts, milled parts, moulded parts, improvements with
passive components and processes such as plating still tend to be their supplier. This will
volume/price sensitive. have quantifiable
Economies of scale do exist with higher volumes equating to
benefits, but will also
lower average cost, so where manufacturers are able to flow down
help develop
long term commitments and volumes to the supply chain, then
mutuality, which will
savings can be made, particularly on bespoke parts.
inevitably factor in the
bid process.
Cost cutting strategy
4) Simplify contracts and
make them relevant.
Allocate reso
urces to joint
design review
s -
Here is a brief checklist that buyers might consider for reducing the
Onerous and
there is signif
icant opportu
nity to make
cost of acquisition and improving availability in a way that provides
irrelevant terms in
savings by re
-engineering
mature prod
ucts
mutuality and financial benefits to both supplier and buyer:
contracts not only
1) Provide the maximum possible long-term commitment to a
cause delays but may also increase the suppliers’ costs.
supplier. In the aerospace and defence industry, many programmes 5) Allocate engineering resources to joint design reviews even for
are long term, but supply contracts are often released on a fairly mature products and try to consider potential cost saving design
short term basis. By flowing down the maximum quantity of firm changes with an open mind.
demand you will always achieve the best deal possible.
In today’s climate, it is imperative that OEMS achieve the best possible
2) Develop clear service level agreements allied to kanban or other prices from their supply chain with long term price stability and
‘pull’ scheduling methods. guaranteed reliable service levels. Developing the ideas of mutuality,
Improved forecasting from OEMs has resulted in Hypertac
improving engagement levels with the supplier and developing a deep
satisfying a number of key customers with 100 per cent delivery
understanding of the supplier’s processes and cost drivers should
service levels.
ensure the buyer obtains the best all round deal for their company.
3) Increase your engagement with your supplier. Many buyer
companies now have teams dedicated to finding process www.hypertac.com
electronics-sourcing.eu MaRCH 2010
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