Assessing value in injection moulder supply chains

Expert view - Wayne Matthews

What is value and how can it be measured?

Value in a supply chain can generally be found where there is a healthy mix of transactional and added value supply partners, servicing customers with specific and unique needs in different ways.

As a business, we talk a lot about adding value and about bringing our expertise, knowledge and experience to projects, but what does this really mean and how can it be measured?

As I see it, value is about providing more than a defined product or component. It is created when customers are provided with a service beyond what has been contracted for that often helps them develop a competitive advantage or solve persistent challenges. It can be a bit of a nebulous concept, but it is best measured by assessing what additional expertise, insight or intelligence has been gained through the partnership, i.e. what different decisions has the customer made because of the partnership with the supplier? What unexpected, but positive, outcome has come about because of that relationship?

This differs from a transactional relationship, which is often short term and focuses on solving immediate problems at the lowest price possible.

Added value: do you need it and what types of suppliers are appropriate?

To assess value in your supply chain, the first port of call is to assess whether you need value adding. This may seem like a strange question, but not every project needs experience-led insights or innovation-driven engineering.

Assessing the supply chain

As Sales Manager at Tecman, you may be surprised to hear that sometimes I tell people we might not be the right supplier for them. This happens where a potential customer is looking for very basic parts or is manufacturing in low volumes at extremely short lead times, with no appetite for design input. This type of work is much better suited to what I call ‘transactional suppliers’, who are well suited to manufacturing widely produced products with little customisation and where face value part price is the primary concern for the customer.

Tecman is much better suited to injection moulders looking for an end-to-end partner, who can customise components, introduce new ideas and use experience, expertise and knowledge to create superior, cost-effective solutions suitable for high volume manufacturing.

Value add vs transactional supplier

Typically, we work with customers who recognise they have a need for expertise and knowledge to augment internal capabilities and who are looking for a strategic partner who can thoughtfully suggest new design and manufacturing approaches that are different to existing assumptions. As many of our customers are major OEMs, they require high volume manufacturing considerations to be embedded within the whole design process, which is one of our key strengths.

An end-to-end partner is the better choice for those looking for a consultancy style approach built on advice and inter-team collaboration and where quality and innovation help to drive profit and growth. This isn’t to denigrate the transactional supplier – many are excellent and for some businesses this type of relationship is better suited to their current needs – but it is to point out that there is an important distinction between simply manufacturing and adding value as an engineering partner.

It is important to point out that while transactional suppliers may have lower upfront costs, end-to-end partners are often more cost effective because they deliver savings through process innovation and efficiency. This may be by saving application time, streamlining processes or cutting waste and often means a cost-effective solution is possible while still improving quality.

Choosing the right strategic partner

For injection moulders, the practical differences between a transactional supplier and an added value supply partner can be stark. We worked with a customer who needed a high-volume custom film that would protect a unique layout during sub assembly and were specifically seeking out a specialist partner who could add value to their working designs. As a trusted, added value supply partner, Tecman surpassed expectations by building a strong collaborative culture between engineering teams, something that is much harder to do with transactional suppliers.

Just as not all injection moulders are alike, not all material converters are alike. The importance of choosing a partner who is best suited to address the specific challenge you have cannot be overstated. Whilst some projects are better suited to a more transactional supplier, we are an outstanding partner for projects that would benefit from expertise, experience and knowledge from a supplier willing to challenge assumptions and innovate to deliver excellent solutions.

Contact us to discover how a solution-driven partnership with Tecman can deliver savings through process innovation and efficiencies.

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