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When suppliers act more like partners

When suppliers act more like partners

According to the manager of one of America's top10 plants, a strong supplier/customer relationship is crucial to an operation's success.

According to the manager of one of America's top10 plants, a strong supplier/customer relationship is crucial to an operation's success.

Aeroquip Corp. boasts that Hydromat not only supplied a bank of high-speed rotary transfer machines, but also a perfect customer/supplier relationship.

As a result of working with Hydromat, Aeroquip has tightened up its valve-manufacturing process.

From machining to preassembly, Hydromat studied Aeroquip's manufacturing process, then contributed ideas to eliminate waste and add value.

This past year, Aeroquip Corp. of New Haven, Ind., was honored as a Top10 Plant by INDUSTRYWEEK, a sister publication to AMERICAN MACHINIST. According to the manufacturer of air-conditioning components, success starts with a supplier that works and strives for the same goals as their customers.

Receiving the INDUSTRYWEEK recognition was no small honor for Darryl Miller, plant manager: "Striving to become world class," says Miller, "took hard work; committed labor and management teams; a flat organization; open and honest communication; the best equipment and tools; and, most importantly, a close relationship with critical suppliers." One such supplier, beams Miller, is precision transfer-machine builder, Hydromat Inc. of St. Louis.

The relationship between Aeroquip and Hydromat is simple—Hydromat acts more like a partner than a supplier. "Once the lines between the two companies are blurred," says Miller, "it's really tough to discern who works for whom because both parties are focused on the same issues of eliminating waste and adding value." Hydromat had worked with New Haven engineers to develop machines fitting Aeroquip's processes.

"This seems intuitive," Miller says, "but it's surprising how many suppliers don't operate this way. Many just don't listen to the customer, falling short of meeting customer needs or eliminating waste." Miller remarks that too many suppliers develop products in a vacuum and then bring them to the customer as solutions. To combat this mentality, New Haven uses a scorecard approach.

The facility scores suppliers based on defective parts per million and late parts per million. Suppliers must reach a certain level to achieve "certified" status and then maintain and improve upon it.

Proof in performance
Hydromats machine many of New Haven's brass components. They are primarily for residential, commercial and industrial air conditioning, and refrigeration systems, as well as for high-pressure hydraulic applications. Machine uptime is better than 90%.

Rotary transfer machines have helped the company reduce scrap, increase turnover in work-in-process (WIP) inventory, and lessen WIP inventory. In addition, the machines have lowered maintenance and operation costs.

"Previously we used screw machines designed to run on oil," Miller explains, "but we ran them on an environmentally responsible, water-based lubricant. The result was unacceptable down-time and maintenance." The Hydromats run on water-based lubricants, operating three shifts/day, often seven days a week.

Also, as a result of working with Hydro-mat, Aeroquip has eliminated operational steps in valve manufacturing. Producing different valve styles used to entail multi-step processes with three or four separate operations in each. Now, due to process improvements, several steps have been reduced and operations and setup times tightened.

Hydromat did more than provide machines, says Miller, "They gave us the best solution."

Miller cautions that process improvements don't just happen. "Over the years, Hydromat engineers have come on site and contributed manufacturing expertise and potential process improve-ments—even after initial machine installation," explains Miller.

Establishing a supplier partnership

Darryl Miller, plant manager of Aeroquip's New Haven, Ind., facility says that developing supplier partnerships is not as easy as one might think. He compares it to basic human relationships.

"Those involved start out by talking, and then move to sharing, all the while learning from each other," he says. Involved parties must be willing to compromise, and Miller offers some steps to follow.

Companies should pick partners carefully, be open to suggestion, and be honest. Responsibilities should be defined up-front, including any projects with shared costs. Any cost-savings resulting from the relation-ship are shared with the supplier.

Miller suggests developing and empowering customer/supplier teams, requiring them to meet on a regular basis at alternating sites. During these meetings, everything is shared, but team players should never be stolen from one another.

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