For aerospace industry supplier Goodrich Sensor Systems, product quality and reliability are of the utmost concern. The Burnsville, Minn. maker of aircraft and engine sensors realizes that to achieve success, it must locate, develop, and maintain long-term relationships with strategic suppliers that have the same commitment to quality and reliability.

It can take years to create the type of relationships that Goodrich wants with its suppliers, so the company doesn't take its responsibilities lightly when it comes to supplier selection and development. “We take on a few good suppliers, not a lot,” states Vivek Kamran, global program manager, cargo and sensor systems. “Our goal is then to keep those suppliers, as well as to grow our business with them.”

Finding and growing domestic suppliers is enough of a challenge in and of itself. For Kamran, though, growing overseas suppliers, especially in low cost country regions such as India and China, is much more of a challenge.

To streamline the selection and management of low-cost country suppliers, Kamran and his colleagues developed a 11-step process.

1. Think long-term in supplier evaluation. “First, we cherry-pick which suppliers we want to do business with,” he says. “We look for suppliers that fit our long-term strategies.” Initial screening determines whether a potential supplier is a good fit for the aerospace business in general, and for Goodrich in specific. According to Kamran, it's a plus if the supplier already has experience with aerospace parts. However, if it doesn't, this doesn't automatically take the supplier out of the running.
2. Then, hit the basics. The team also looks at potential suppliers in terms of traditional issues, such as cost, maturity, ethics, financial health, quality systems, and on-time metrics.
3. Who's in charge here? “I also like to talk to the CEO,” Kamran says, adding that he wants to find out how the CEO thinks, as well as how Goodrich would be positioned in the supplier organization. “I want to know if we are going to be one of the top two to four players in that business.” This is important, because, when Goodrich does business with key suppliers, it tends to “fill them up” with work.
4. Team meeting. Kamran and his colleagues also meet with other members of senior management, as well as middle management, to make sure these teams are strong. “We want to make sure they have good people in all of the key positions,” he says. If the team identifies one or more weak areas in management, it will likely mention this to the CEO. “We will tell him that they need to resolve this concern, or the relationship may not be able to move forward, based on some experiences we have had in the past.”
5. Start slowly. If the supplier passes initial screening, Goodrich may start the supplier out on a trial basis and see how it does. According to Kamran, it can take six months to a year to find out if the first parts the supplier provides are going to work out. These early parts involve work with a cross-company technical team, and they also involve the transfer of technologies and detailed drawings, processes that do not occur overnight.
6. Build loyalty. Once it is clear that a supplier has the capabilities and the commitment to become a long-term supplier to Goodrich, Kamran's next step is to begin to build loyalty with the supplier. “It takes a lot of time to develop a supplier and bring them on-board, so we don't want to lose suppliers,” he explains. “One of the best ways to keep a good supplier is to build loyalty with that supplier.” For Goodrich, loyalty is a personal process, not a theoretical one. That is, loyalty exists when the individual executives in the supplier organization feel a personal loyalty to Goodrich. “We build relationships and loyalty at the personal level with senior management and middle management,” he explains.
7. Pull back the curtain. Kamran has found that most suppliers, by this point, want to see a long-term plan. “Usually at this point, we will provide them with a long-term view of our business and what that will mean for our relationship with them,” he notes. He discusses what plans Goodrich may have for the supplier, and how those plans will be mutually beneficial to both Goodrich as well as the supplier.
8. Road trip. Another key step in building loyalty is to visit the supplier's facilities in person. While Kamran arranges conference calls with key overseas suppliers as often as three or four times a week, he also visits them in person at least quarterly. “We also have a good local team in the regional office,” he adds.
9. Invite them back. Suppliers are also expected to visit Goodrich as well in the relationship-building phase, so they can see what Goodrich's factory looks like and provide input. Supplier response? “It can be mind-blowing to them,” Kamran says, adding that a lot of good ideas come out of those interactions. The visits provide the suppliers with a totally new perspective on how a plant works.
   “If we are going to share a machining process or work on improved tools, we will do a Lean event, suggest some process improvements to the supplier, and then invite them here to work on these together,” he adds. During these visits, suppliers spend two or three days going over processes and prints, talking with engineers, and discussing parts issues, all of which provide them with additional clarity. And possibly the most important revelation to suppliers: “They can see how their parts actually fit into our product and how they function,” Kamran says.
10. Send in the engineers. Goodrich also arranges for some of its manufacturing engineers to spend two or three weeks in overseas markets, such as India, visiting key suppliers, working on process issues with them and helping them get their cycle times down.
11. The weight of loyalty. What if a supplier's management fails to respond to Goodrich's many overtures to build loyalty and long-term relationships? In other words, if a supplier has excellent cost, quality, and delivery, but doesn't seem interested in a close, long-term relationship with Goodrich, would the company still do business with the supplier? “We wouldn't stay with them,” replies Kamran. “It would not be a good fit for us.”
    Kamran admits that identifying the best overseas suppliers and building long-term relationships with them takes a lot of time, effort, and resources. “However, if you do it right, the savings are fantastic,” he concludes.