7 april 2023

Going East:Our Approach and

Experience…

Michael NieuwboerMarco Verstappen

Quote Evaluation Contracting Part Transition

Overview

Different Phases of the Project

Planning Part Identification Supplier IdentificationQuoting

1. Project Planning

Important Aspects

Project LeadSQDSQEMechanical EngineerPlanningMetallurgist

Signed Charter by Principal

Also important:•Project Schedule•Communication Plan

• Management commitment is key;• Resources have to be available;• Tight Project Management; planning and

monitoring• Reason for project has to be spick-and-span

and well-communicated– Savings, Rationalize Supply Base, Guarantee

Delivery, etc.

1. Project Planning

Lessons Learned

2. Part Identification

Important Aspects

• What parts• Annual Usage• Current Stock• Part Specifications

– Drawing– Material– Flatness– Heat Treatment– Quality Standard

• CTQ’s• Required Supplier Capabilities

2. Part Identification

Lessons Learned

• Grouping acc. to required Supplier Capabilities– 243 parts subdivided into 11 groups

• Drawing is not actual part– How to handle?

• NCR history by part– Rust, Material, Dimensions, Burrs, Missed

Operation, Damaged

3. Supplier Identification

Important Aspects

• Which Country• Which Company

• Location main customer base• Direct labor cost levels• Political stability / EU member• Economic development• Grant possibilities• Customer preferences• Alignment LCC Strategy Purchasing

www.doingbusiness.org/map

3. Supplier Identification

Lessons Learned

• First decide which Country(s)

• Make use of local existing intermediaries

• Non Disclosure Agreement• Make Supplier Presentation

– Whole Package Requirement– Ask them which Package interested– Include Schedule

• Dunn & Bradstreet / Financial Stability

• Company Track-Record• Response Accuracy / Speak

common language

• Make Long-/Short list

??

4. Quoting

Important Aspects

• Get Short list confirmed by PT– Select Limited Potential Suppliers– Be aware that always 1 or 2 fail

• Decide on what aspects you will evaluate the Quotes

• Work to ‘RFQ’s will be send’ date

4. Quoting

Lessons Learned

• Make one clear RFQ for the different Packages• Indicate very clear what they have to fill in:

– Quote Return File– Supplier Self Assessment

• Prevent multi-interpretable• Double check RFQ docs• Throughput time RFQ not necessarily longer (~3

weeks)

• Make announcement mail• Keep in contact after sending the docs• Send all documents by e-mail

5. Quote Evaluation

Important Aspects

• Quote Validation– All documents received– All parts are quoted

• Quote Evaluation• Price vs. Quality

– Local Support– Technical know-how– Synergies with other plants

• Make Supplier aware of e.g. Tooling & Gauging requirements

• Identify Risks (concerns / gaps during process)

5. Quote Evaluation

Lessons Learned

• Meet with Supplier– Discuss all open question– Shop tour

• Document everything; especial addition questions• First price is never Best price; even when

requested…• Prepare advice in which whole PT feels

comfortable to sr. management• Be sure that your suppliers contact person has

enough authority

6. Contracting

Important Aspects

Q Minimum Quality Requirements:

Maximum of 1,636 PPM for the 3 month Delivered Quality as reported on the Supplier Scorecard

D Minimum Delivery Requirements:

95% on time delivery to the P.O. date as reported on the Supplier Scorecard

R Responsiveness Requirements:

Maintain lead times below 30 days. Respond in a timely manner to Engineering Changes and possible schedule changes.

C Minimum Cost Requirements:

Achieve and maintain fair and reasonable pricing defined as a + of - 5% range of competitive pricing in the market.

Q, D, R, C Requirements

6. Contracting

Lessons Learned

• Lowest price isn’t always the best.

• Contracts need to be supported by top-management

• Don’t commit yourself to high volumes

• Do not try to squeeze your supplier

• Make part transition plan

• Prepare PPAP plan– Process Flow diagrams– Control Plan– FMEA Plan– Gage R&R Study– Process Capability on

CTQ

• Establish Exit plan with existing Supplier

7. Part Transition

Important Aspects

• Prepare Transition plan together with Supplier

• Also involve customers • Weekly calls to discuss status• There are always some ‘issues’• Make Inventory and Forecast analysis to

prioritize Transition process• Monitor PPAP process closely

7. Part Transition

Lessons Learned

Results in ‘our’ Project

Timing

Slight delay mainly due to:• Longer lead time at supplier PPAP • Availability of tooling at new supplier• Approval alternative material Chinese suppliers• Longer lead time Customer PPAP

Results in ‘our’ Project

Savings

General

Shared experiences

• Not well educated in planning skills• Do not be offended or disappointed to soon. They share a different

view. Persistence is more successful• An action list is useful but will probably be used as notebook• Cash is king. Do not expect large cash contributions. It is simply not

available• Many eastern Europeans are very tough negotiators and will

always take off for the grant price (even unreasonable starting points). They hardly use proven hard data

• Are easily convinced when hard data is showed• Make sure you have a credit card with PIN code• Only the president of the company decides, final agreements must

be made directly with him/her• They hear what they want to hear. Be very specific in telling a

message• Official documents will be signed by many people, especially with

larger companies, take your time

General

Shared experiences

• They are not well spoken in the English language, especially on the shop floor

• They are eager to learn but their lack of pro-activity prevents short term success

• There are cars that have only 1 HP… And they are not allowed to drive everywhere…

• Face-to-Face contact is extremely important• East Europeans like to do business with a friend. Make sure that

you are introduced properly and you will build-up a relationship. In hard times they will help their friends first!

• You will not loose time with the endless bureaucracy• Do not try to bribe people• It is wise to close a visit week with a Minutes of Meeting signed off

by both parties• To check whether they have the same understanding of the

agreements made as you• They be inclined towards nodding ‘yes’ but have no idea what you

are explaining them• EU member ship makes it much easier to import goods

Michael NieuwboerSupply chain & Sourcing expertMichael.nieuwboer@coppa.nl+31 (0)6 2890 2893