Working on Your Next Light Rail Project? Here’s What OEMs Need to Know

July 18, 2023 by Liberty Electronics

The global light rail industry is forecasted to reach $4.97 billion by 2026, growing at an annual rate of 9.8%. While Europe continues to maintain the highest market growth, the recent rise in light rail passengers across major U.S. cities has led to approvals for light rail extension projects throughout the country — expecting to drive market growth even further. Light rail vehicles produced by companies like Bombardier, Siemens, Kawasaki, Hitachi, Alstom, Ansaldo, and others are expanding across the nation due to advancements in areas like noise reduction, comfort and safety.

With this in mind, OEMs serving the light rail industry have a unique opportunity to penetrate the light rail market. Purchasing managers within the light rail industry select projects based on 3 key factors — all of which OEMs should deliver on in order to effectively win the project during the bidding process:

Value-based pricing (evaluations based on overall benefits perceived by customers, rather than simply according to competitors or historical prices)
Superior customer service
Investments in quality control and technology

By employing strategic sourcing and strategic purchasing practices, OEMs can effectively design, produce, and deliver safe and efficient systems to light rail transportation customers.

Value-Based Pricing: The Case for a Strategic Approach

OEMs should plan to implement strategic sourcing techniques to appeal to light rail suppliers. Strategic sourcing plans can facilitate transportation suppliers forming multi-year contracts with third-party vendors, which allows the OEMs to dedicate more resources to marketing, product design, and integration while specialists assemble the nuts and bolts of their products.

Bringing in strategic suppliers to handle sub-assembly production also allows OEMs to focus on the best new practices and customer-specific goals. Strategic procurement strategies benefit the bottom line. Because third-party manufacturers have lower cost structures, cutting-edge manufacturing technologies, commodity-specific expertise, and also serve multiple clients, each individual assembly they make typically costs far less compared to parts assembled in-house. When factoring in life-cycle costs such as overhead support and warranty returns, the savings are even greater.

Meeting Demands for Superior Customer Service

Light rail OEMs depend on suppliers not just for reliable manufacturing services, but also to effectively manage their supply chain. This is where superior customer service and technology service start to blend: many OEMs are looking for suppliers whose processes and IT systems can create a seamless, end-to-end supply chain management system.

In addition to this technology, the following customer service factors are critical:

Timely status reports
Fast, accurate solutions to inquiries
Creative and collaborative problem solving
Nimble and rigorous configuration management, including audit and compliance support

Supporting Complex Systems with Quality Control & New Technology

An influx of funding in public transit has spurred innovation in the light rail industry and the technologies it uses. Cloud-based systems such as the Internet of Things (IoT) allow rail companies to gather data from smart sensors, and machine-to-machine (M2M) learning provides more efficient response times. With more timely information, intelligent apps increase customer satisfaction by providing real-time and accurate views of delays or changes to scheduling, making rail transit a more viable option for urban commuters. Suppliers that successfully compete in the rail industry implement the following while demonstrating a command over the complex systems described above:

Integrate with the latest advances in production, including automation, Six Sigma methodology and lean manufacturing processes
Comply with the most stringent standards and requirements (ISO 9001, AS9100 and NADCAP AC)
IT systems that are easily customizable to accommodate evolving requirements

Improve Your Supply Chain Network with Liberty Electronics

Liberty Electronics has developed cutting-edge electronic solutions for OEMs working with the transit industry for decades. Our high-quality electrical cable assemblies, wire harnesses, and box builds have appeared in cities across the country and around the world, and our dedicated team of technicians and professionals will work with you to help design and build the assemblies that you need.

At Liberty Electronics, we’re wired for your success. If you would like to know more about what Liberty Electronics has to offer for the light-rail industry, contact us today and sign up for our informative newsletter.

How the Right Contract Manufacturer Benefits OEMs [Video]

May 23, 2023 by Liberty Electronics

Choosing the right Contract Manufacturer is integral to business success, whether taking a strategic outsourcing approach, or a tactical one. In this episode of Wired Success, Mark Cessar talks with Liberty’s Director of Business Development, Scott Anderson about how the right Contract Manufacturer can benefit your business, and how that can depend on whether the business takes a strategic approach or a tactical approach to outsourcing the work.

Mark:
Hi my name is Mark Cessar and I’m joined today with Scott Anderson. He is the Director of Business Development at Liberty Electronics. He has worked here for 20 years and has almost 40 years in the industry. Our topic for today is “how the right contract manufacturer can benefit your business.” So Scott, will just start right in so how can the right contract manufacturer help an OEM improve their bottom line?

Scott:
Well thanks Mark, it’s good to be here with you today. What we find it really depends on the approach that the customer takes. If they’re taking a strategic approach, it’s one answer. If they’re taking a tactical approach, it’s another but either way, they can expect to achieve some cost reductions, lead time reductions, capacity increases, and quality and reliability improvements

Mark:
Can you elaborate or provide any examples of tactical versus strategic outsourcing?

Scott:
Sure. On the strategic side, it’s more involved but there is a greater up-side. And so we find that customers are looking at focusing on their core competencies. And so they’re looking at final integration and test and looking really for Liberty to become an extension of their factory to manage this commodity for them. And so this allows them to reassign personnel to more value-added work, reallocate facilities to more value-added work, and at the same time taking advantage of Liberty’s lower rate structure and specialized technology that they might not possess.

Mark:
Well, is there anything else you’d like to add?

Scott:
Well, there are some additional benefits on the strategic side that are worth mentioning particularly on the design side. When companies can integrate more tightly, share information, it results in some significant improvements at the front end. And in addition, strategic agreements are another piece of this that we find helpful. It allows Liberty to build to a forecast and then we can stock raw material, we can stock finished goods, and it takes an assembly that might otherwise be a twenty-six week lead time and convert it to about two days, allowing us to support pull systems and VMI 3PO fulfillment Systems.

Mark:
Well thank you Scott that’s all I have today and thank you for tuning in to another discussion on Wired Success presented by Liberty Electronics.

The Benefits of Collaborative Design [Video]

March 14, 2023 by Liberty Electronics

In this episode of Wired Success, Sales Engineer, Mark Cessar, talks with George Allman, Liberty Electronics’ Manufacturing Engineering Supervisor to ask some questions about how OEMs can benefit from collaborating with suppliers during the design phase of a project. During their discussion, George shares what suppliers can bring to the table and the overall value this offers OEMs.

Mark Cessar: Hi. My name is Mark Cessar and I’m here with George Allman for another discussion on Wired for Success presented by Liberty Electronics. We are here to talk today about the benefits of collaborative design. George has been working here at Liberty Electronics for twenty-three years as a manufacturing engineer. So we’ll just get started. My first question is “why should an OEM collaborate with a contract manufacturer like Liberty electronics? Are you saying that they don’t know what they’re doing? Are you saying that they don’t know their own design?”

George Allman: Not at all Mark. Our customers, OMS, that we work with are very well-versed in the product design that they’re trying to achieve. However, with Liberty Electronics and our 35 years of experience in manufacturing, we can sometimes bring more to the table that they may not be aware of. Sometimes that’s component selection, sometimes it’s methodologies, sometimes it’s the way that the product will fit together with something else.

MC: You mentioned your unique focus and following expertise. Can you provide some examples of how this could benefit any OEM?

GA: Sure Mark. Again, with their 35 years of experience in this industry, there’s oftentimes when an OEM or customer may suggest a component. However, again with our experience and working in military aerospace at commercial energy sectors, we can oftentimes recommend an alternate, something maybe that’s a little bit more suitable for the intended purpose that the customer may not be aware of.

MC: But won’t this take too much time in an already aggressive product schedule?

GA: Well Mark, it’s been our experience that usually solving issues and situations the earlier in the program that you can, it equates to saving time and money downstream throughout the entire project. And so what we see is the earlier that we can get involved with a project, the earlier that engineering here at Liberty Electronics can get involved in a project, we can oftentimes find solutions quicker, easier, and in a more timely manner and that’s to help the customer.

MC: Well, thank you, George. I appreciate your time. And thank you for tuning into this discussion on Wired Success presented by Liberty Electronics.

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.

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.

Liberty, Independence, and Reshoring

July 5, 2022 by Liberty Electronics

In an interesting convergence, the new United States Mexico Canada Agreement (USMCA) trade deal has taken effect within days of celebrating Independence Day here in the United States of America. The new deal replaces the old North American Free Trade Agreement (NAFTA) that was implemented on January 1, 1994. While the net effect of NAFTA has been the subject of spirited debate, there are two unfortunate realities. First, the US trade deficit with these countries increased from $17 billion to over $177 billion per year, and over 800,000 US jobs were displaced during NAFTA’s 26-year existence. Likewise, and worse for Americans, since China joined the World Trade Organization (WTO) in 2001, 3.4 million US jobs have been displaced, and the annual US trade deficit with them peaked in 2018 at over $400 billion. To add insult to injury, trade with China has strengthened a totalitarian regime that oppresses the Chinese people and views the United States as an obstacle to their global ambitions.

In achieving the goal of helping to level the playing field, the new USMCA deal and others that could follow will likely increase the costs of goods produced in what were previously identified as “low cost regions.” In addition to trade deal changes, the costs of “low cost region” supply chains have been severely impacted by things like increased tariffs, the COVID-19 pandemic, natural disasters, wage growth, energy costs, and destabilizing factors, which include crime and the threat of armed conflict.

So as Americans celebrate Independence Day this year, many US companies are declaring independence from offshore supply chains. The Thomas Industrial Survey, for example, recently reported that 64% of manufacturers are likely to bring production and sourcing to North America, and this number has been growing. The Institute for Supply Management reports that nearly 75% of companies are reporting supply chain disruptions due to the coronavirus. It’s no wonder more and more firms are reshoring.

Numerous case studies reveal that manufacturers that reshore can expect to reap improvements in a number of areas, including product quality, lead times and delivery, inventory costs, innovation and faster product development, and reduced threat of theft of intellectual property and supply interruptions, among other benefits. As a result, manufacturers are looking to achieve a reduction in the Total Cost of Ownership (TCO) of the products that they begin to source domestically.

In our experience with our customers, reshoring, and even changing suppliers within the same country for that matter, can be a daunting task. There are tools and methodologies, however, that we find make the process much less susceptible to potential pitfalls, and minimize both the cycle time and cost of the project.

Robust configuration management and ERP systems, for example, are essential to get the right products at the right time. Hundreds, thousands, and even more parts need to be ordered and delivered at the correct revisions and at the right times in order to ensure supply continuity. Early collaboration, gold standard assemblies, both physical and digital, and even reverse or re-engineering can be key, especially to uncover and address “tribal knowledge” that is not captured in the technical documentation. Both the ability to quickly scale capacity, and rapid tooling development, including using 3-D printing, can also help ensure a smooth process.

Ultimately, we’ve found that our commitment to your success is the key factor in getting your products moved from an incumbent supplier in a timely and cost-effective manner. If you are looking to reshore your products to a US EMS contract manufacturer, we invite you to consider Liberty Electronics. Let freedom ring!

Sources:

https://reshoringinstitute.org/reshoring-knowledge-library/reshoring-case-studies/
https://ideas.repec.org/a/elg/rokejn/v2y2014i4p429-441.html
https://monroeengineering.com/blog/study-reveals-which-manufacturing-companies-are-reshoring-the-most-jobs/
https://www.newsweek.com/china-trade-deficit-has-cost-us-millions-jobs-across-all-50-states-report-1184426
https://www.thebalance.com/u-s-china-trade-deficit-causes-effects-and-solutions-3306277

Advantages of Moving Up the Bill of Materials [Video]

May 24, 2022 by Liberty Electronics

The Bill of Material is a critical component of the planning process in manufacturing for any industry. In this episode of Wired Success, Mark Cessar talks with Liberty’s Programs Director, Troy West about what moving up the Bill of Materials is and how this approach to procurement can benefit OEMs in terms of ease of installation, capacity, costs, and inventory reduction.

Mark:
Hi, my name is Mark Cessar and I am here today with Troy West for another discussion on Wired Success presented by Liberty Electronics. Troy has worked for the company for 19 years as our Programs Director. He is from Butler County, Pennsylvania. So, today’s topic for discussion is “advantages of moving up the bill of materials.” So to start, why would a system supplier want to outsource a higher level assembly as a strategy, versus cable and harness assemblies?

Troy:
Well, the main reason a supplier would want to source a chassis or box build as opposed to a harness would be the ease of installation. So, when they get a harness or cable assembly, they have to take that assembly and install it in whatever their unit is: the chassis, the box… and that can be a fairly labor-intensive process. So by having it come to them as a completed unit, then they may simply have to bolt that chassis into their assembly that they will sell to an OEM and it’s already tested; it’s already inspected, and therefore it helps save on their labor costs.

Mark:
So let’s talk about capacity. How can this approach help this area?

Troy:
Well for a system supplier, you know, if they’re able to outsource the chassis for example– if I can give an example– there is a customer I know of that had a large harness they were procuring from us that had about 90 wires going to a single terminal block. And the original intent was that they would terminate to that terminal block at their facility. However they did not have the labor available for that. So after a couple months of receiving assemblies that way, they decided to have the terminal block included in our bill and have us do the termination. And it saved them– according to them– about six hours per unit for the installation.

Mark:
All right, what about cost? What are the implications there?

Troy:
There are several factors that can be impacted by this for cost. One of which would be a reduction in inventory for the system supplier to carry, as well as the number of PO’s that would be issued by the supplier, as well as the receiving and warehouse activities to manage all of those components.

Mark:
You mentioned inventory reduction. Can you explain that a little bit more?

Troy:
Yeah we can work with the system supplier to potentially have a pull or vendor-managed inventory system set up so that they would only need to pull those items as required. As well as it would reduce the number of part numbers that they would need to carry in their inventory and the cost associated with having them in their inventory and purchasing them.

Mark:
So last but not least, what effect can this strategy have on the design process?

Troy:
Well, if the system supplier is able to modify their design to make it easier for installation, that can impact quite a bit. Their remaining labor, for example, they might have the harness at present exit the chassis and go to switches or terminal blocks or whatever that would need to be hooked up afterward, and they might be able to modify the design so it’s connected and to make that chassis a plug-and-play type assembly. So,drop it in, hook up a few connectors, and you’re done with it as opposed to installing it and then running a bunch of wires wherever they need to go.

Mark:
Well thank you try thank you for tuning in to another episode on wired for success presented by Liberty Electronics. Thanks again, Troy

Safety in Numbers: How Process Metrics and Certification Drive Quality

September 11, 2018 by Liberty Electronics

Recently, the Washington Metro Area Transit Authority (WMATA) in the nation’s capital was forced to decommission nearly 75% of its new 7000-series rail cars due to crimping defects. The rail cars had crimping defects that went undetected until WMATA’s quality inspectors discovered them. The WMATA’s Quality Assurance, Internal Compliance and Oversight office (QICO), estimates that the rail cars will take over a year to be repaired. Going forward, QICO is requiring that in-process quality checks and high standards of engineering design be more explicitly outlined in WMATA’s manufacturing contracts.(1)

According to George Allman, Project Engineer at Liberty Electronics, this instance underscores the need for stringent internal quality standards to guard against the tiniest malfunctions. He calls this concept “safety in numbers.” At Liberty, for example, many layers of process controls, workmanship standards, and overall company culture are factors which reduce the chances of a product failure like the one now facing the WMATA.(2)

To Allman, frequent and thorough process controls build a database for the company to learn what standards can be reached. The more known and predictable these levels of acceptability are, the less margin for error. For example, when producing wire crimps, Liberty practices “continuous monitoring throughout the process” to ensure the crimps are of the best quality. Additionally, Liberty utilizes pull-tests and crimp analysis sampling to test the strength of the crimp connections. (Ibid) By paying attention to the consistency in product quality and becoming accustomed to a certain level of acceptability in its own work, the company builds high expectations for itself.

Moreover, Liberty holds itself to the highest standards of workmanship. The company has multiple quality assurance certifications that create the highest levels of product acceptability, most notably in IPC 620, ISO 9001, AS9100, and NADCAP AC7121. Because of this, Liberty’s internal standards exceed industry norms and manufacturer’s guidelines in contract manufacturing.

These many layers of tests and workmanship standards create a company culture that is dedicated to excellence. According to Allman, the stringent company standards reminds employees that “everything we touch affects someone’s life.”(Ibid) This is something that employees, and by extension the entire company, do not take lightly.

Liberty’s products contribute to systems and infrastructure that the public relies on every day. By utilizing the highest goals for acceptability through tests, standards of workmanship, and a company culture dedicated to excellence, the company helps ensure that its products will perform reliably for those who depend on them the most. By utilizing these measures, Liberty Electronics shows that there is safety—and distinction—in numbers.

Sources:

Washington Metropolitan Area Transit Authority, QICO 2018 Internal Review.
George Allman (Project Engineer, Liberty Electronics), phone interview, 16 August 2018

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Have questions about process metrics and our quality standards? Contact us for more details.