Supply chain professionals are typically focused on creating a supply chain of trustworthy sources that can meet their product needs, but how can they get more than just a simple “shoot and ship” from their plastics supply chain? Injection molding suppliers have the opportunity to provide a significant value to their customers if they expand their capabilities to more than only injection molding.
With the vast number of injection molding suppliers, OEM supply chain managers have been more focused on a reduction and consolidation of the supply chain since 2008. Originally the main driver was to increase the buying power at a single supplier (for pricing negotiations) and reducing the need for additional internal overhead to manage the supply chain. Over the past decade a lot of OEM’s have been continuing to not add suppliers only offering simple solutions and only focusing on suppliers that offer more than the standard.
Whether the plastic part is an internal component, exterior shell or entire assembly, it makes sense to have an injection molding supplier that can provide a value-added service at the time of molding. If a subassembly can be completed prior to molding, then the injection molding supplier can bring the sub assembly into production and finish the assembly after the plastic components are completed. If it’s an entire plastic assembly, then multiple sub-assemblies can be created and put into work-in-progress (WIP) and brought out for final assembly.
Value-add suppliers can also relieve some stress of managing large quantities of suppliers due to reducing the total number of suppliers within the supply chain. If the injection molding supplier is experienced enough, the responsibility of managing the sub-suppliers will fall on them;
- Supplier selection and auditing process
- Ensure quality and delivery
- Responsible for all back-office activities
- Managing orders
- Production dates and lead times
- Single point of contact for a product
While price isn’t always a driving factor at an OEM, it still plays a major part in supplier selection when evaluating the value behind what the pricing is. For simple “shoot and ship” type of parts, there aren’t too many moving parts involved and OEM’s can compare suppliers in a simpler format. For a better understanding of some tips when choosing your supplier, please check out this article for some tips on the RFQ process for tool sourcing; Accurate Proposal for Tooling
OEM’s are comparing the value that they are receiving from their supply vs the cost/pricing that they were quoted. While there isn’t necessarily a solid dollar amount, they can attribute towards the value add, they can get close by reviewing all of the components and factors leading into the total price.
By combining either a portion or the entire assembly into a single supplier that is already manufacturing components, at a minimum there are savings from a labor standpoint not to mention all of the logistics and “soft costs” of internal tracking at the OEM. Less time is spent tracking supplier performance and maintaining of purchasing agreements/contracts, not to mention fewer vendor meetings, negotiations, phone calls and emails, which inevitably leads to lower administrative costs because there are fewer PO’s to process and invoices to pay.
By reducing your supplier base you will also enhance relationships with your chosen suppliers that can help streamline claim/complaint resolution and free-up time for your procurement team. Those left in your narrower supplier base now become more than just suppliers, they become partners; they have a vested interest in making sure your company succeeds.
Design and Engineering
For a single product with only one additional component to full assemblies with over 35+ components, the upfront design, engineering and manufacturability is a critical step prior to going into full production. If your supply chain has a supplier with a high level of value-added capabilities, there will be a different approach when reviewing the product. Not only from a “how should we assemble this?” standpoint, but from a reducing the total components and the components design intent.
When a value-added supplier reviews your assemblies, the goal is to reduce complexity while still keeping the design intent, functionality and performance. There are many times where entire types of components can be removed from an assembly by changing to something more cost effective and efficient. The goal is to assemble as much as possible with the existing labor making the parts or creating multiple sub-assemblies and then taking offline for final assembly. This not only reduces the time for final assembly, reduction to number of times components are handled individually and also utilizes existing labor.
Simple design or assembly changes at times can lead to significant savings when partnering with the right value-add supplier. Additionally, utilizing robotics and automation in the value-add process can increase the consistency and efficiency of the assembly or sub-assembly.
Crescent has been a value-add supplier to OEM’s for over 70+ years looking to partner with a company that is on the leading edge of manufacturing technology and a continues to reinvest profits into the company’s capabilities.