When a plastics processor rolls out a new product or alters the design of an existing one, it usually involves its engineering, marketing and sales staffs from the initial planning stages. But the company's resin and additive suppliers may be left out until the projects are cleared for take-off. Rowmark, a Findlay, Ohio-based extruder of thin-gauge plastic sheets for engraving and thermoforming applications is finding that early supplier involvement in its product development cycle can smooth a product's path to market by lowering raw materials costs and sidestepping disruptions in the supply chain.

"Today, we see our suppliers as partners in every sense of the term," says Eric Hausserman, Rowmark's vice president for manufacturing and technology. "It doesn't do us any good if we have the lowest priced supplier, but constantly struggle with quality or delivery issues." Recently Rowmark has been taking a deeper look at prospective suppliers and bringing the most successful applicants into its strategic planning sessions to become part of Rowmark's business teams for specific products, even those still on the drawing board.

Saving money and boosting productivity have always been concerns at Rowmark, says Hausserman, but have become critical in the past few years as resin and additive costs have climbed in step with rising petroleum prices and heftier energy bills. To deal with these new realities, Rowmark recently began developing and implementing programs to reduce its energy spending and make its processes more cost-efficient. As part of that effort, Rowmark brought in Fort Worth, Texas-based consulting firm Resin Technology, which recommended Rowmark make some internal organizational changes that encouraged different departments to work together for common objectives, rather than being isolated in noninteracting "silos," as they were before.

One of the key strategies facilitated under the revamped organization is use of cross-functional teams, organized and led by the purchasing department and composed of staff from sales, marketing, accounting, production and engineering. Such teams, says Hausserman, are typically assembled when it is time to choose a new supplier, as is often necessary when changing to lower cost materials or implementing product or design changes. The goal of a team is to share information that will allow more informed choices of materials and suppliers.

"The last thing you want to do is make a change in a material or product and have it adversely impact the customer," says Hausserman. This becomes less likely, he adds, when different departments get together and weigh in with their concerns.

In one recent case, a cross-functional team at Rowmark convened to look at lower-cost resin alternatives for one of its products. The objective, says Hausserman, was not only to save money, but also to improve the product's performance properties. Members of the team from purchasing and engineering looked at the prices and physical properties of various resin candidates, oversaw trials of the more promising ones, surveyed the market and supplier base for the resins under consideration, and ultimately narrowed the choice to a material and supplier that met the project's goals. The final raw materials cost saving for the project was about 4%, Hausserman estimates, for a much-improved final product.

In Rowmark's choice of new suppliers, economic and technical considerations play into the final decisions, but less tangible factors, such as "cultural fit," also count, notes Hausserman.

"Before we work with a company we try to get to know them better today than we did in the past," Hausserman says. "We bring them in, meet with them, and share with them details of our business and volumes, and products. We try to make sure they have a very good understanding of what we do and how we do it. We typically do an audit of their quality and production systems and try to get an understanding of what drives their business and what's important to them."

After that, "if it looks like a mutual win-win situation, we'll develop a partnership with them, and link them to our business when it comes to volumes."

Rowmark has also moved to foster more competition among its suppliers. The company now makes sure it has more than one pre-approved supplier—often two or three suppliers—for each product it buys. This practice, which is a change from a few years ago, has several benefits, Hausserman explains.

"First, it ensures that our supply chain is robust in case of disruptions. Secondly, it helps us understand what's going on in terms of cost for each material." Like many industrial purchasers, Rowmark usually has a primary supplier for each product, with other qualified suppliers serving as backups.

Despite its efforts to keep suppliers competing, Rowmark doesn't easily drop suppliers that have proven their reliability and flexibility. "We value long-term relationships," says Hausserman. "As long as our partners do what they say they're going to do, and continue to provide quality products and services at a competitive rate, we prefer to stay with them."

Once a supplier is approved, it may be called upon to help Rowmark with new product development. "We get involved with our suppliers very early in the design phase" of a new product, says Hausserman. "Often, suppliers can possess a technical expertise that we lack, so we try to leverage their knowledge" to expedite the project. A supplier that contributes its expertise to the launch of a new product has a leg up in becoming the preferred supplier of materials for that line if it goes commercial, Hausserman notes.

As part of its "green" efforts, Rowmark recently brought in one of its suppliers to jointly develop a new material for its product that matched the specs and properties of the existing material, but—unlike the original—could also be recycled. The targeted product was a three-layer material for the thermoforming market that could be used in a variety of applications that require a soft-touch feel. With the help of its cross-functional team, Rowmark collaborated with the supplier on every stage of the project, from initial conception to testing and marketing and in the end, had a win-win for both buyer and supplier.

After a product reaches the commercial phase, some qualified suppliers may find themselves unable to meet Rowmark's entire volume needs for the line. But if a supplier has established a trustworthy reputation, says Hausserman, Rowmark will ascertain its maximum monthly volumes. Then, if appropriate, the company will put in blanket orders with the supplier for these amounts. Sometimes, Rowmark's agreements with suppliers will specify certain price "targets," Hausserman says, "to make sure we stay competitive."

On a quarterly basis Rowmark rates its suppliers in such categories as quality of products, speed of deliveries, and meeting promised delivery dates. At the end of each year, the company also hands out awards with such titles as Supplier of the Year, Best New Supplier, or Best Service Provider. Such feedback, says Hausserman, ensures that suppliers "know what our requirements are and continue to meet them."