Strategic Sourcing Basics for Aerospace Manufacturers

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.

 

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How to Successfully Switch Suppliers [Video]

by Liberty Electronics

supply chain | How to Successfully Switch Suppliers [Video], Liberty Electronics®

Scott Anderson of Liberty Electronics shares best practices and the importance of a multidisciplinary team in the process of switching suppliers. This includes ensuring adequate production capacity, consistent OTD, and dual-sourcing supply to avoid supply chain disruption. To learn more about how Liberty works with customers on supply chain management and switching suppliers, check out our blog and video below.

Mark: Welcome to another episode of Wired Success presented by Liberty Electronics. Today I’m here with Scott Anderson. My name is Mark Cessar.

Scott is the Director of New Business Development here at Liberty and we are here to talk about switching suppliers. So, Scott, why are we talking about switching suppliers today?

Scott: Well, thank you, Mark. It’s good to be with you again.

There have been a number of studies recently that show that actually a majority of O.E.Ms are considering switching to new suppliers. In some cases they’re looking to avoid tariffs or supply disruptions, and in other cases they’re looking to increase capacity or improve quality. Unfortunately, switching suppliers, though, is a risky business.

Liberty has worked with a number of customers over the years who’ve transitioned business to Liberty from an old supplier, and we’ve learned some lessons and developed some best practices that we’d like to share today.

Mark: Is there any one thing that stands out above others in terms of best practices in switching suppliers?

Scott: Well, I’d say, like much of manufacturing, it is really important to focus on the process and also in having a multidisciplinary team that’s responsible for and accountable for the process.

Mark: So, let’s talk about the process. What are some key elements?

Scott: Well, first, one thing that’s critical in contract manufacturing is getting the configuration right. Does the finished physical product match the technical documentation? Unfortunately, some suppliers make changes to the product without updating the documentation. So, for example, they might substitute a component without updating the bill of material, or they might switch out a tool or change a tool setting without updating the documentation. So, we found it’s critical to have a gold standard of the finished product. So whether it’s a physical gold standard or whether it’s a digital gold standard, something to validate the configuration against and also having a multidisciplinary review of the technical documentation and the process.

Second, sharing forecast information with the supplier and having a supplier that has a robust ERP system is important to making sure that the components are arriving when they need to be there to support the transition and also to ensure that there is adequate production capacity to meet the demand. Then, third, it’s also important to have some type of supply redundancy so whether that’s some safety stock to cover a few months of the transition or possibly some parallel production with the old supplier to cover that period it’s kind of a belt and suspenders approach that might not be necessary, but there’s really little downside.

Mark: Is there anything else that Liberty has picked up over the years that could help an O.E.M. in this process of switching suppliers?

Scott: Well, Mark, there are a couple things that we’ve picked up on that are key, and one is the ability to be nimble. Invariably in these transitions something unforeseen pops up and it’s important to have lean processes to be able to respond quickly and also to minimize the cost impact. Second, and probably most important, is commitment on the part of the supplier to the success of the transition. In other words, having a supplier that’s willing to do whatever it takes to make this happen for the customer.

Mark: Well, thank you for your time today, Scott and thank you for tuning in to another episode of Wired Success presented by Liberty Electronics.

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Benefits of a Relationship-Minded Supplier [Video]

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.

 

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Special Delivery: Boxing and Shipping

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.

 

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