How Procurement Professionals Can Prevent Fulfillment Pitfalls

February 28, 2023 by Liberty Electronics

With the news of backlogs at record highs this year, industry OEMs and suppliers are looking for ways to ramp up production to meet demand. Meeting these needs can become challenging when fulfillment issues arise. According to forecast experts like Deloitte, manufacturers in 2019 should be focused on strengthening their supply chains, more effectively managing projects, and leveraging advanced technology to increase efficiency. As OEMs and suppliers both contemplate ways to meet demand, here are a few things all procurement professionals should look for in suppliers to prevent fulfillment pitfalls.

Agile and lean manufacturing

Agile manufacturing is all about setting yourself up for speed, efficiency, and convenience. Customer demands can fluctuate, and when manufacturers are agile they can quickly and nimbly pivot with these adjustments. Lean manufacturing is the sturdy and strong foundation required in order for agility to be possible. Small batches, continuous flow production, and quick changeovers are all key components of lean manufacturing. Agile manufacturing builds on top of lean processes and implements four key elements: modular product design, information technology, corporate partners, and knowledge culture.

Safety Stock

When demand rises but the supply isn’t available to fulfill that demand, the entire manufacturing process comes to a halt. Inventory management is one of the key components of fulfillment success, and one of the ways to stay at the top of your inventory game is to maintain safety (or buffer) stock. Maintaining safety stock of key items can reduce the likelihood of out of stock supplies, but space and budget can both be an issue. The good news is, many reliable suppliers will keep safety stock. Whether they decide to order larger amounts for an OEM in case the order increases or the cost is less to order in bulk, suppliers often strategically maintain safety stock to be prepared for these pitfalls and have the controlled areas to store it.

The right ERP

Reliability, customization, and accuracy are nonnegotiables for OEMs and suppliers when it comes to streamlining fulfillment. Comprehensive Enterprise Resource Planning software can foster clear, concise information across a business as well as manage expectations for a variety of departments. The right ERP can integrate every facet of a project; from product planning and design to manufacturing and marketing. Designated individuals have access to relevant information through each phase of the lifecycle. The ability to cost-effectively customize the software is critical to the support of customer-specific requirements as well as evolving standards and regulations.

Reexamined BOM’s

Demand-driven material requirements planning (DDMRP) is causing many OEMs and suppliers to take another look at the way they approach and use their Bills of Material (BOM’s). DDMRP relies on examining inventory levels through the lens of existing supply and pending orders, adds buffer stock strategically into the equation, and determines the level of demand and appropriate response. Strategic buffer stock is considered within the BOM based on the frequency with which a particular part is usually used, ever-changing lead times, and the phase at which certain supply could potentially run out of stock. When supplier procurement professionals examine their needed and existing materials through this more expansive lens based on demand, they’re less likely to face unexpected depletion.

Fewer sourcing partners

This might sound counterintuitive, but OEMs wanting to lower the risk of fulfillment pitfalls might want to consider the benefits of partnering with a few key partners or even a single source supplier for manufacturing needs. When you select a long-term partner, a relationship can be built and strengthened from an earned trust. You can also take the time to create the rapport that allows more integrated systems and streamlined communication. Not to mention, trends and habits learned over time spent together can become the foundation for intuitively predicting and anticipating inventory needs.

To learn more about avoiding fulfillment pitfalls, or to speak with an expert about partnering with a trusted supplier, contact Liberty Electronics today.

Overcoming Tribal Knowledge in Outsourcing

February 14, 2023 by Liberty Electronics

Imagine notifying your two largest customers that their lines will be down because you won’t be able to deliver their products for 16 weeks. Imagine the daily conference calls, site visits, audits, and over-time costs while your organization is turned upside down trying to deliver product, all for one simple reason: a key part of the process was never formally documented on an assembly that is newly outsourced, or outsourced from a new supplier.

No matter how well-equipped a manufacturer is, it is often cost-effective and convenient to outsource certain parts to another supplier. Reliability, quality, capacity, and cost are some of the reasons why a manufacturer might choose to outsource an assembly. Outsourcing can be a great strategy, but it can also reveal problems associated with tribal knowledge: key process elements that somehow escaped official documentation.

Usually, a problem with tribal knowledge arises when the previous manufacturer makes a change to a part during manufacturing without proper documentation. These changes include: a difference of settings on tools utilized, alteration of techniques, or the change, addition, or omission of parts. These seemingly small modifications remain hidden throughout the manufacturing process until the assembly is outsourced to another supplier. The assembly is ordered and received, only to find that, while it meets the print, it does not fit into the upper level assembly, or even worse, it fails in service. Now your customer is unhappy because it has taken months to diagnose the problem, get the documentation changed, and have the new, usable assemblies delivered.

Fortunately, there are steps that can be taken to avoid problems that tribal knowledge can cause. Early collaboration between manufacturer and supplier is paramount so that both parties can discuss, witness, and document the manufacturing process. Product and process photography should be employed to ensure that the entire process is captured. Physical “gold standard” assemblies that have been built previously and that are known to be correct are also useful for the new supplier.

It is crucial that manufacturers recognize and avoid unethical suppliers, who often purposely keep information from their customers in order to inhibit them from switching suppliers. And be wary if the supplier also manufactures components for the assemblies–this often provides more opportunities to leverage these practices. Instead, a company should seek suppliers who operate with transparency and integrity. A supplier with such qualities will demonstrate rigorous configuration management and process controls, thereby developing better documentation and products. And if you’re already being held hostage by a supplier, it may become necessary to find a supplier who will re-engineer the designs to lower cost, shorten lead-times, and give the you the option to have another company manufacture the assembly if desired.

Problems associated with tribal knowledge are a common issue in outsourcing, but they are also preventable. By working with ethical suppliers who communicate well and document their processes and products, a manufacturer can avoid the pitfalls of tribal knowledge that lead to products that, while built to the documented specifications, do not meet your form, fit, or function requirements.

Want to learn more? Contact Liberty today!

Reduce Supply Chain Issues With a Relationship-Focused Supplier

January 31, 2023 by Liberty Electronics

Reduce Supply Chain Issues With a Relationship-Focused Supplier

OEMs rely on successful partnerships to improve performance, especially when supply chain issues are top of mind for many businesses. It’s crucial to consider how successful long-term relationships can ease supply chain delays through reduced lead times and expedited problem solving.

Building individualized relationships creates better access to products and helps meet specific needs. Manufacturers can reap the rewards in a complex, constantly evolving environment by working with suppliers who personally know their purchasing, engineering and quality departments.

What Sets a Relationship-Focused Business Apart

Relationship-based businesses focus on engaging customers through information and resources that connect directly to their audience and provide value. Once you’ve established familiarity, open communication channels lead to a beneficial relationship with tone and language that both parties easily understand.
Knowing the ins and outs of OEMs can lead to quick resolutions and proactive awareness of potential order issues, faster turnaround times and a deeper familiarity with product lines. Liberty’s team caters to your needs to help you and your project succeed, especially when the supply chain is experiencing shortages or long lead times. Here’s a deeper look at those benefits:

More familiarity with product lines: By knowing customer requirements, suppliers don’t have to start from scratch and can plan on meeting certain specifications ahead of time, potentially shortening the turnaround time for initial units.
Reduced lead time: Suppliers could choose to stock components that may have a long lead time, even if there is no current demand. With knowledge of the customer’s product and specifications, suppliers can also plan builds around those requirements to react more quickly.
Quicker resolutions: Suppliers would know exactly who to contact about specific issues or concerns. For example, an order could be flagged if the customer typically orders items as sets, but they only order part of the set. Suppose there are engineering questions or quality concerns. In that case, they could go directly to that person to manage the issue more quickly rather than contacting a buyer and waiting for contact information.

While transactional business models succeed in driving sales, this is also true with relationship-focused business models. However, the benefits from the relationship model are longer term vs. short-term financial gains. Ultimately, a strong relationship with suppliers allows OEMs to create systems to stabilize demand for parts and reduce shortage risks.

A Partner, Not Just a Supplier

From your first interaction with a relationship-based business like Liberty Electronics®, you can tell we operate differently. Our team prioritizes building relationships with customers by learning your specific needs and delivering customizable solutions. By immersing ourselves in our customers’ business, we develop a 360-degree understanding of what success looks like. Ultimately, you’ll feel heard and understand we aren’t just a supplier — we’re your partner.

This type of partnership results in more success, better performance and a higher quality standard for both the customer and supplier. With few signs of improvement in the disrupted supply chain, finding a supplier who focuses on building relationships can strengthen your operations.

With over 35 years of leadership in our field, we specialize in supporting aerospace, defense, rail, transportation and nuclear energy industries by providing products including:

Electronic wiring harnesses
Box builds
Electrical cable assemblies
Electrical cabinet assemblies
Electrical panel assemblies
Electromechanical assemblies

In addition to our dedication to quality, service and on-time delivery, we’re a relationship-based supplier that values cooperation over competition and are based in Franklin, PA. To build a long-lasting relationship, contact us on our website or via email about working together.

Why OEMs Should Consider Outsourcing A Level Up the Bill of Material

January 17, 2023 by Liberty Electronics

The Bill of Material is a critical component of the planning process in manufacturing for any industry. This comprehensive list of components and equipment required to manufacture a product can fluctuate depending on cost, availability, and capacity. For original equipment manufacturers (OEMs), outsourcing a level up the Bill of Materials might prove to be beneficial.

For example, by partnering up with the right contract manufacturer (CM), you might be able to outsource both the cable and harness assemblies and the assemblies themselves. There are a number of advantages for outsourcing at the next level up in assembly.

Increase Capacity

If you need to increase your final assembly, integration, or test capacity, you can immediately increase your capacity by moving the subassembly work to a qualified CM and free up internal personnel to take on this extra workload. Departments such as Planning, Procurement, and Quality can also free up capacity when they only have to manage a few upper-level assemblies rather than a high volume of lower-level assemblies.

Achieve Cost Reductions

Lean CMs often have a lower labor sell rate than the fully burdened hourly labor rate of an OEM. Additionally, a CM can optimize the value stream and sometimes reduce the total required manufacturing hours. By switching upper-level assembly work to a trusted CM, you can take advantage of a reduction in hours plus the lower rate structure, particularly for that overhead personnel needed for production support.

Realize Lead Time and Inventory Reductions

By building to your forecast, CMs can anticipate your needs and stock long lead time components and assemblies. By working with CMs that support Pull Systems and Vendor Managed Inventory Systems (VMI) both with or without third-party logistics providers (3PLs), you can experience further improvements in material availability while reducing lead times and inventory dramatically.

Exploit Improved Designs

When you collaborate with the right CM early enough in the life cycle of a project, they can provide their specialized input on component selections in order to not only reduce cost and lead times but also improve reliability. This level of optimization can continue to drive overall product and process improvement. For example, CMs that have the capability to produce CAD solid models and 3D-printed models can provide faster, less expensive mock-ups that allow for the opportunity to evaluate multiple different design concepts.

It’s important to remember that none of these benefits are possible unless the CM you partner with has a robust and efficient configuration management system in place. Knowing the impact of proposed changes to cost, schedule, stock, work-in-progress and finished goods is critical for effective implementation.

To speak with a contract manufacturing expert on how to efficiently and effectively outsource a level up the Bill of Material, contact Liberty Electronics today.

Strategic Sourcing Basics for Aerospace Manufacturers

August 30, 2022 by Liberty Electronics

Strategic sourcing processes allow manufacturers to choose the best vendors based on more factors than cost alone. By evaluating other characteristics such as quality management practices, efficient operations, design capabilities, and sustainability, purchasing managers are using strategic sourcing techniques to look at the “bigger picture” for long-term growth.

Strategic Sourcing vs. Traditional Purchasing

During the traditional purchasing process, purchasing managers often make supplier decisions based on the lowest cost per unit and discounts provided for high-volume orders. However, this often results in selecting multiple vendors to work on the similar projects — meaning more complex procedures for your internal team.

Conversely, strategic sourcing:

Evaluates the best possible value through the total cost of business
Agrees on quality standards for fewer inspections and waste reduction
Invests in select suppliers for simplified ordering and invoicing arrangements

Why Does Strategic Sourcing Matter?

Statistics show most businesses spend over 60% of their revenue on purchasing goods and services, while implementing strategic sourcing practices can result in as much as 70% of potential procurement savings. In fact, strategic sourcing often comes with immediate returns for procurement managers by freeing up resources to expand the core business and allowing staff to spend more time doing what they were hired to do.

For example, as manufacturing technology continues to become more automated, engineers have more time to dedicate to creative thinking and design. The same goes for purchasing managers and strategic sourcing.

Strategic sourcing procedures offer three significant and immediate benefits:

Financial Incentive – Streamlining procurement operations frees up resources, reduces costs, and increases the overall value of purchases.

Decreased Risk – By evaluating more than cost, purchasing managers reduce operational risk by taking factors such as financial stability, sustainability, and innovative momentum into consideration.

Goal Alignment – Gaining a partner in business operations helps to ensure that a company’s business goals align with those of their vendors. A robust, trustworthy relationship is paramount for success.

Strategic Sourcing Applications within Aerospace

Growth in the aerospace and defense market has increased the need for electronic manufacturing services and suppliers. Although military specifications were once regarded as the most rigorous compliance standard, these regulations have recently been upstaged by modern commercial quality standards. Since the acceptance of IPC6 Class III standards, most electronic manufacturing services (EMS) companies now maintain the required quality standards necessary for military-spec manufacturing.

As such, there is a growing acceptance of EMS outsourcing, and nearly all U.S.-based aerospace and defense contractors outsource at some level. Some aerospace and defense leaders who are currently outsourcing include:

Lockheed Martin
Boeing
Northrop Grumman
Raytheon
General Electric
Harris
Motorola
EADS
Rockwell Collins
United Technologies
Honeywell

Sourcing & Consulting Services with Liberty Electronics

As your strategic business partner, Liberty Electronics takes pride in our commitment to quality with vendors that choose us for strategic sourcing. We are ISO 9001-certified and AS9100-certified, and our inspection process is rigorous. Our staff is dedicated to providing a competitively priced, world-class product that will exceed your expectations and your standards.

Maintaining the highest quality means ensuring our manufacturing personnel receive continuing education for on the job requirements and achieves the following certifications:

IPC/WHMA-A-620 + Space Addendum
IPC J-STD-001 + Space Addendum
IPC-A-610
NADCAP AC7121

Liberty Electronics’ team works with top defense and commercial OEMs who want to expand their capabilities through teaming with an outsourcing partner — including Bombardier, General Electric, Northrop Grunman and Raytheon. Subscribe to our newsletter today to learn more about how Liberty Electronics can help drive efficiency in your aerospace supply chain with enhanced strategic sourcing processes.

Contact Liberty today with any questions that you may have.

How the Right Contract Manufacturer Can Benefit Your Bottom Line

June 21, 2022 by Liberty Electronics

Lack of capacity, along with rising operating costs and increased competitive pressures, have caused companies to explore the option of contract manufacturing for their products. Contract manufacturing outsources certain manufacturing operations to a third-party, passing on the responsibility for materials, capital, equipment, staff, and software.

Contract manufacturing allows businesses to shift their focus away from fabrication and assembly and place more emphasis on core business-related tasks such as design, development, integration, and testing. Contract manufacturing is especially ideal for companies that do not possess:

In-house capability and/or expertise to reliably produce a certain element or multiple elements of existing or planned products
Sufficient capacity to keep up with demand
Contingency in the budget to accommodate unforeseen circumstances during production
The ability to coordinate the different variables required for product creation, including raw material procurement, design, fulfillment, and delivery

Although contract manufacturing is a beneficial and valuable tool for businesses, specific steps still need to be taken to ensure the outsourcing process is as cost-effective as possible.

Is Outsourcing Tactical or Strategic?

Tactical outsourcing and strategic outsourcing are driven by different factors.

Tactical outsourcing is an approach usually employed by organizations that are seeking a short-term fix and or limited cost reductions. Companies that use tactical outsourcing tend to do so based on criteria such as cost and available delivery dates. This type of outsourcing also allows businesses to hand off limited scopes of work to gain expertise and or capacity.

Tactical outsourcing is viewed as relatively straightforward, as it is based more on immediate need. For example, an OEM may outsource overflow manufacturing to keep up with demand. A company may also outsource to free up capital funds being spent on non-core functions. Such a move can prevent the need for expending capital on additional floor space and equipment.

Strategic outsourcing, on the other hand, is much more involved, and much more impactful. In contrast to tactical outsourcing, which can be reactive and often short-term in nature, strategic outsourcing involves a more long-term focus. This type of outsourcing allows businesses to hand off functions that either cannot be performed by their organization or are difficult to control and manage.

During this type of outsourcing, decisions are made based on myriad factors and can be considerably more complex than tactical outsourcing. For instance, it often involves the restructuring of an organization based on core competencies and external relationships. Strategic outsourcing might also entail retraining certain employees to do more value-added work.

A strategically outsourced contractor is not just a vendor, but is also a partner in many ways. In a strategic outsourcing partnership, both parties have a significant stake in the relationship. The client frees up money and resources to focus on core business concerns, while the contract manufacturer offers their own core expertise that can improve the production process and maybe even the product itself. In such a relationship, the partners share risks and share investments, ultimately reducing the negative, and amplifying the positive effects on both parties.

Other benefits companies gain from a strategic outsourcing partnership include:

Lower internal department handling costs
Reduced inventory
Increased capacity
Access to state-of-the-art processes/technology
Increased market competitiveness
Reduced training/workforce costs and responsibilities
Access to a lower cost structure

One of the primary goals that strategic outsourcing seeks to achieve is a reduction in the total cost of ownership (TCO).

What Should You Measure?

Knowing what metrics to use also plays a substantial role in contract manufacturer selection. Financial and operational (or non-financial) metrics represent two particular parameters that need to be considered.

Financial metrics

Outsourcing essentially boosts economic value added (EVA) by significantly reducing operating and capital costs, while inventory reduction, increased turns, and reduced equipment, facility, and personnel costs affect the return on assets (ROA). Financial metrics are used to predict, capture and assess the economic impacts of the outsourcing initiative. They should also be used to evaluate and select the right contract manufacturer. Examining the strength of their bottom line and balance sheet, for example, is a crucial element of selecting the right outsourcing partner.

Operational metrics

Money isn’t everything when it comes to metrics. Manufacturing success may be further evaluated by measurements such as on-time delivery, cycle times, quality, and reliability. These parameters can ultimately affect time-to-market (TTM), and overall customer satisfaction with the final product.

A Trusted Contract Manufacturing Partner

Selecting the right contract manufacturer can free up precious resources for more challenging or pressing tasks, which can ultimately improve a company’s productivity and ability to innovate. Liberty Electronics draws on decades of experience to solve complex challenges related to manufacturing, engineering, and quality. We work closely with our clients to offer superior contract manufacturing services, making us a true consultative partner.

Benefits of a Relationship-Minded Supplier [Video]

September 24, 2020 by Liberty Electronics

Driving performance through successful partnerships is a critical component of the OEM supply chain. Liberty prides itself on being a relationship-minded supplier, knowing the ins and outs of our OEM partners. Quick resolutions and proactive awareness of potential order issues, faster turnaround times for new orders, as well as a deep familiarity with product lines are all benefits of these relationships. This investment in our partnerships results in better performance and a higher standard of quality for both customer and supplier.

In this episode of Wired Success, Mark Cessar asks Liberty Electronics’ Program Director, Troy West, about the benefits of partnering with a relationship-minded supplier.

Mark:

Thank you for tuning in to another episode of “Wired for Success.” I’m here with Troy West, my name is Mark Cessar and we are here to talk about the benefits of a relationship-minded supplier. Liberty Electronics was established in 1985. In these years, we have developed numerous relationships with companies and Troy, can you talk about the benefits that these years of familiarity can have for these companies?

Troy:

Sure, Mark. Some of the benefits would be knowing who to contact about certain issues or concerns that you might have regarding what’s going on with your customer. For example, you may see that a customer that typically orders items as sets, they’re only ordering part of the set instead of the entire set, you can bring that to their attention almost right away and say “Hey, you know, we think you’re missing a part. You may need to go back to your planning, or your engineering to make sure that the parts list is correct or the planning is correct on that item so that all three items get ordered together as they should.” Also, if there’s an engineering question or a quality concern, you might be able to go directly to that engineer, or to that quality person, and have them brought into the loop essentially right away as to what the issue or concern is and have it dealt with much more quickly than having it go to the buyer, and then having the buyer have to figure out who to talk to next, and how to resolve it next.

Mark:

You talked about increased speed. Can you elaborate a little bit on this topic?

Troy:

Sure. There’s several components that we can use to increase speed, or turn around time, for something. One of them would be as you’re more familiar with a customer you can know what their requirements are. You don’t have to start from scratch on those. So if you know for example, they have to have certain specifications that they’re going to have to meet then you can plan on meeting those in advance. And then you don’t have to go back and ask those questions; “Hey you know do we need to have three reterminations for every terminal that’s on your wires?” You just know in advance that you have to have that and you don’t have to go back to the customer for it that can aid in the development of the first units planning on these requirements to be met so that it shortens your turnaround time for the initial units which usually are the longest ones. And as you become more familiar with the customer– and we may have you know long-term contracts or some sort of agreement with them– we may come into a stocking position on commonly used components that may have a long lead time. And you can then use that stocking situation to shorten turnaround time for new orders.

Mark:

Related to increasing speed, can you talk about how a relationship-minded approach can decrease lead times for our customers?

Troy:

Several items that could be impacted by being relationship-minded. One of which is on a long-term customer, we may elect to stock certain components that may have a long lead time even if there is no current demand for them. That will help us to shorten our lead time to them for orders consuming those components going forward. Another potential area that we could reduce the lead time would be when we have a good knowledge of the customer’s product, and the customer’s specifications, we can plan our builds around those requirements, and that will help us to be able to react more quickly, and more completely to their requirements.

Mark:

Can you talk about the commitment that we show to our customers?

Troy:

We want to be a relationship-minded vendor to our customers. We want to have a personal relationship with their purchasing, their engineering, and their quality. We want to be able to help our customers succeed, which in turn, will help Liberty to succeed. In turn that gives us more access to our customer, to their products, to their needs, so that we can hopefully expand and develop that relationship further.

Mark:

Finally, can you talk about the commitment that we have to our customers?

Troy:

Liberty Electronics endeavors to build relationships with our customers, purchasing, engineering, quality. What we find, Mark, is that these relationships help us to be able to resolve/issues concerns more quickly which is a benefit both to our customer and to Liberty itself. The knowledge that you gain by dealing with the people over the years, knowing who to talk to at a customer’s location for whatever the issue or concern is, basically speeds everything along, makes it all go more quickly and is mutually beneficial to the customer and Liberty. The years that we invest in our customers results in, I believe, better performance for them and for Liberty.

Special Delivery: Boxing and Shipping

December 12, 2018 by Liberty Electronics

Creating a quality product doesn’t just end with the manufacturing phase. Choosing the best packaging and shipping options to meet a client’s needs is also an important step in ensuring a product reaches the client in the same state it left the facility. Components are packaged according to specific standards and or client guidelines, and these may include special instructions or specifications, as well as quality assurance measures taken during the manufacturing and packaging process. A variety of packaging options can be used to achieve this goal, including ESD packaging and 3D-printed covers, as well as other more traditional packing products.

Before the final product is even prepared for shipment, various measures are taken during manufacturing to ensure that the components meet or exceed the client’s specifications. These product validation efforts can be used in support of the packaging process. Articles can be photographed or videotaped in an undamaged state before transit to facilitate root cause corrective action necessitated by shipping damage. It is after these measures are taken that the various packaging options come into play.

ESD protective packaging shields components from external static charge. This is different from standard anti-static foam, which protects the product from static within the package itself. ESD packaging is available in foam sheets or shipping boxes, as well as bubble wrap and metallic film bags. ESD packaging is typical in the industry, meeting the requirements of MIL-STD-3010 4046, EIA 541, EIA 625 and ANSI/ESD S20.20 certifications.

3D-printed covers are a unique way to protect components during shipping. Covers, caps, clips, and other items can be custom-fitted to fragile parts of the assembly, printed in house, and applied to the product during the manufacturing process. This not only ensures the components are protected during shipping, but also during the manufacturing process itself.

Of course, more traditional packing materials–bubble wrap, packing peanuts, and shipping foam–are also used, depending on the requirements of the product and client. As for the shipping process, standard commercial services such as UPS or FedEx are usually adequate to satisfy the contract with a client. Occasionally, common carrier freight lines or special delivery options may be explored, and at times, products may be transferred via a dedicated company vehicle directly to the client to ensure simplicity in the shipping process.

The use of various packing materials, inspections and additive manufacturing all come together to ensure one objective: that customers receive products in the same condition as they left the manufacturing facility. The variety of measures taken toward this end ensures not only the best manufactured product, but the best received product.

Contact Liberty today with any questions that you may have.