More examples of new approaches
By Staff -- Purchasing, 11/19/1998
A lot of what's being discussed is under development at present, or it is withheld from detailed explanation because of a perceived competitive advantage being developed by changes in buyer/supply strategies. But there are some examples in today's metals marketplace.Buyers at General Motors are working with the Inland Flat-Rolled Steel unit of Ispat Inland Co. to supply ultra-high-strength steel sheet for door beams that will be fabricated by Harvard Industries for GM's next generation of standard-size pickup trucks starting next summer. The door beams are expected to require 7.5 million tons/year of this new martensitic steel. GM engineering and purchasing teams also are looking at ultra-high-strength sheet for future use in such other automotive parts as bumper backup beams, transverse structural beams, miscellaneous flat reinforcements, some structural tubular components, seat parts, and side sills.
Defined generally by the steel industry and its customers as steels having a minimum tensile strength of 100,000 lb psi or greater, ultra-high-strength steel sheet has less ductility than lower-strength steels but possesses higher load-carrying capacity at lower weight per part. Harvard will roll-form and weld the sheet into door impact beams for GM's Metal Fabricating division plants, which will assemble the doors for the 1999-model Chevrolet Silverado and GMC Sierra pickups. GM purchasing now is looking at supply partners for similar impact beams for the 2000-model Chevrolet Suburban and Tahoe and the GMC Suburban and Yukon models.
In a similar new supply arrangement, GM buyers have chosen Stelco to supply the 70,000 tons/year of steel to Budd to fabricate the steel frames for its next generation of Chevrolet Blazer and GMC Jimmy sports 2002-model utility vehicles. Both the frame contract and the steel supply agreement are new multiyear deals. The three-party arrangement was necessary, according to GM buyers, because these new SUVs will employ some first-time frame applications for hydroformed tubular steel components from hot-rolled sheet.
And, although Toyota Motor Manufacturing USA Inc. in Georgetown, Ky., and Honda of America Manufacturing Inc. in Marysville, Ohio, have the ability to make laser-welded steel blanks, purchasing at these two companies have decided that outside processors can be more effective suppliers for the majority of their needs. Honda, for example, uses TWB Co. of Monroe, Mich., to make the laser-welded steel blanks for inner door panels used in Accord-model cars.
As an example of new relationships, metal buyers at AMP Inc. in Harrisburg, Pa., provide suppliers with weekly reports on metals demand and cost trends, analysis of upcoming metals needs, and current global economic situations. In return, the connector maker asks suppliers to maintain high-quality metal parts delivery on a just-in-time basis and technical expertise and support. Note that most of AMP metals suppliers are under multiyear supply contracts, which are administered under a "total cost management" auditing program.
Early this year, Boeing implemented a new supplier rating system as part of what director of materials J.F. Bower calls "our vision to refine the supplier database to include only high-performance suppliers who incur minimum non-productive quality and delivery costs beyond the agreed-upon cost of the materials." He says that procurement is being advised to solicit bids in the future from higher-performance suppliers.
The supplier ratings are updated monthly, available to suppliers on a special web page and are subject to discussion with buyers. Bower says the goal is to improve supplier performance (which has been troublesome as the airplane maker has expanded operations) and to make the suppliers accountable for their own performance. Note that the ratings are tough. High performers are those with quality at 100% and delivery at 95%-100%; good performers have quality ratings at 98%-99.9% and delivery at 85%-94.9%. Those on the bubble, the borderline suppliers, have quality ratings at 95%-97.9% and delivery at 70%-84.9%. Poor performers are those with quality at less than 95% and delivery at less than 70%.
Talkback
Related Content
Related Content
Sponsored Links
View All Blogs
Now Playing:
