"When dealing with companies in a global marketplace, world pricing is always an issue; however equally important to cost containment are technical expertise, reliable on-time delivery, quality performance and understanding," says Rod Peterson, strategic sourcing manager at Crane Aerospace. "Whether on or offshore, we want to have the best partners in the world who are experts in their field and share our common values and business philosophy."
In 1999, Crane Aerospace introduced new core technology for proximity sensing products to a segment of the aerospace market - highly reliable technology used in all types of aircraft, in all types of weather and in all parts of the world. These devices are used to measure position of door, landing gear and flight control surfaces on commercial and military aircraft. The magnetic sensing core, a critical component, is subcontracted by Altek, a full-service plastic injection molding and machining manufacturer in Liberty Lake, Washington.
"Altek has always been willing to invest in the technology and performance measures needed to support our product development cycle," says Peterson. "It's just one of the reasons we've been sourcing to them since 1999 and established a ten year contract with Altek for the cores in 2004."
Key to this partnership is Altek's implementation of a Kanban system which controls production surplus and safety stock while reducing lead times and inventory balances for ELDEC. It is shop floor control at the finest - the scheduling, releasing and tracking of all production orders from the supplier shop floor to the direct manufacturer in one streamlined and continuous transaction based on actual consumption of the product.
How Kanban Works:
Altek is signaled when a production item needs to be replenished due to actual consumption of the unit at ELDEC. The signal works as a production control device - if no signal exists, the Altek work center does not produce. If a signal is received, production at Altek begins. The Kanban system controls both manufacturing and procurement by providing feedback needed to update the production schedule and establish work center priorities based upon operation status and Kanban replenishment due dates.
"Altek was one of our first suppliers to implement a Kanban system and they have been extremely successful. Despite the fact that we have tested their reliability by pulling additional and random signals, they continue to deliver," Peterson stated.
While many manufacturers today use a combination of domestic and offshore suppliers, recent recalls of products manufactured overseas can serve as a cautionary tale for everyone contemplating outsourcing. No matter what the projected cost savings, dealing with material shortages, on time deliveries and language barriers are among the multitude of trade-offs.
"Should we have unexpected design changes or sudden production requirements, it's reassuring to know that we have a supplier who can respond quickly to our needs, who speaks our language and operates in our time zone - something that just isn't possible with overseas suppliers and can quickly reveal the hidden costs of offshore manufacturing," stated Peterson.
