What the Duck?! Episode 32 Transcript
HELP ME FIND A NEW (SUPPLIER) MAN: How to Find Alternative Suppliers for Hard-to-Source Parts and Materials
Welcome to What the Duck?! a podcast with real experts talking about direct spend challenges and experiences. And now here’s your host SourceDay’s very own manufacturing Maven Sarah Scudder thank you for joining me for What the Duck?! Another Supply Chain Podcast brought to you by SourceDay.
I’m your host Sarah Scudder and this is the podcast for people working in the direct materials part of supply chain. I’m @SarahScudder on LinkedIn and @SScudder on Twitter. If you are new to the show, make sure to follow this podcast so you don’t miss any of our direct materials supply chain content. Today I’m going to be joined by Rochelle Newman and we’re going to discuss how to find alternative suppliers for hard-to-source parts and materials. If you work for a manufacturer relying on a couple key suppliers and are worried about the risk involved with not having enough backup options, then this episode is for you.
Rochelle started her career in the medical industry where she focused on supplier relationships due to the small community of vendors that supplied their specific material for their devices. Now in her role at Chromalox, she’s more focused on sourcing materials. So, welcome to the show, Rochelle. Thank you, glad to be here. So Rochelle, like most of us who randomly fall into this crazy world of procurement and supply chain you actually got a Bachelor of Fine Arts degree from the University of Utah, but you wound up in procurement. So how did that happen? Mostly by happenstance honestly. Because I I was doing art and it was becoming a full-time job. However, my family life kind of broke down, unfortunately, and I had two kids that I needed to support, and I just happened to get a job at my previous company Ortho development, and through a bunch of positions being opened, I got a job underneath the the he was the what was he the materials manager, and he was also over the procurement team. But so after the job coming open for a buyer, I basically said hey this is something that sounds interesting to me could I get the job? And after working it out with him I got a junior buyer position through Ortho. So, it just happened to be me at the right place under the right boss and kind of pushing the envelope a little bit. So, it was completely out of my wheelhouse, but it was something that I that I knew I could do because I’m really good with scheduling and I’m highly organized even though that seems counter-intuitive, especially for an artist. But it was definitely something I knew I could do so I pressured him basically to get the job.
So, you you started as a junior buyer, pivoting from art. So completely different world. Yeah. What were the biggest challenges that you faced in your first couple years learning how to be a buyer?
Conversations around product and how to, I call it being politely rude. How to kind of push our vendors as partly as I could to get our material in. Get our product in the parts and stuff like that basically communication was my biggest hurdle in getting into that position.
What would you say, so, working in the in the medical industry has so many nuances because it’s so heavily regulated? Yes. I mean there’s there’s a lot of creative, innovative things that you want to do, but you can’t because it’s so regulated. What would you say was the hardest part of working in the medical industry? For what we were doing, which was mostly hip and knee replacements, it was definitely a how small the supply chain was for those materials. You basically had maybe a couple distributors, but they were all getting it from the same manufacturer.
So, you could try to outsource something but you’re still getting the same lead times same problems because there’s only one or two people you could honestly go to for materials to make hip and knee replacements, and that held the same thing the same problem for a couple medical plates trauma plates and some screws. If you like broke bones and stuff like that that that definitely, was it. Was just so small you really couldn’t do a whole lot outside of what you had already.
Were, so I’ve never worked in the medical space. I have lots of friends that have previously or or that are still working in the industry, were you able to leverage overseas suppliers for any of these hard-to-source parts and materials? Or is everything done primarily domestically?
Overseas, mostly because a certain material that we had to have was only made in Germany, or this certain material was only made in England; and where we were a small shop, most of our product was bought. I think it was by the time I left, it was 86 or 87 percent of our product was bought out of house, but so there was a whole lot of leverage, as in, as to like, well, if we can’t get this product, then we’ll go to somebody else because there really isn’t. Most of our leverage was, well, if you can’t get us this product, then we’re gonna scale down on buys, basically, so you’re not going to be getting as much money out of us as you were. That’s where our leverage came in with that medical side. Yeah, and it seems like the whole notion on supplier relationships was very, very important to you. You want to be a supplier, a customer of choice because they have the power, being that there’s not a lot of other options, and the supplier knows that. So, I’m sure that was a huge focus for you as you’re learning the whole communication piece of buying.
Definitely, it definitely was, and especially as we were still a small company, it was extremely important that we had really good relationships with our suppliers and getting to know them personally. We would have their reps come out all the time, our suppliers there, and we would get to know each other. It’s definitely a community where you would travel maybe off and on, or they would travel just so that you guys could personally meet and really drive home but the personal relationship.
So you’ve since pivoted and are no longer in the medical space. You now work for a company called Chromalox. So, how and why the pivot? How come you decided to change companies?
The biggest one was honestly over Covid, and also my life had changed to where I had moved like an hour away from Ortho. And so, moving that far away, I was looking for a new job closer to home. And the Ortho development had gone really hard on Covid policies and was going to increase insurance and other restrictions that I thought weren’t going to help me or my family. And I definitely wasn’t gonna take the train for an hour and a half when I didn’t want to drive for an hour. So, I definitely knew I wanted to stay as a buyer. I knew I liked it. I can handle this stress. It’s a pretty high-stress job. And I definitely wanted to stay in that. And it just so happens that this job opened up. And the boss at the time there was looking for somebody kind of outside of what Chromalox does. So, she was specifically trying to get a team together that had a broader spectrum than just heating systems, which is what Chromalox does.
Yeah, very smart hiring strategy. I think you can gain a lot from bringing people from other industries to provide different expertise and opinion versus somebody who’s spent their whole career in one industry.
So, when you and I were prepping the call, you mentioned you buy a lot of materials. So, what are the main materials that you’re sourcing today?
My material thermostats, a bunch of Electrical components like that, sensors. I am buying some tubing, very little, a bunch of wire. We use tons of wire of all different sizes and shapes and material. I was buying a lot of flanges for our heating elements and pipe; however, I’ve been taken off of that recently. But definitely, I would say controls, thermostats, and wire, probably my biggest three right now.
Of the three, what’s the hardest to source?
That controls, thermostat, sensors, all of that. It is so hard to get right now because our suppliers, it’s kind of like what was going on with Ortho. They only have so many people who are making these things right now. And whereas Chromalox is specifically asking for this specific supplier, you can only get this specific vendor from their side as well. It’s creating a lot of issues. That’s definitely the hardest. The lead times have gone from depending on what material, the shortest was two weeks. It’s now up to 30 weeks.
Yeah, so you’re almost having to forecast a year out, which is kind of impossible when demand fluctuates so much.
It’s impossible because our location, we have several locations, but our location here in Ogden, Utah specifically does custom work. That’s all we do. And so, we don’t get demand a year in advance at all. We’re lucky if we get advance in like five months. So, it’s causing a lot of pressure on the job and a lot of pressure on the company as well.
Just so I’m clear, your team or your division is doing custom heating systems, meaning nothing’s out of the box, pretty much?
Yeah, that is right. We have a huge machine shop out and back doing all custom work. We have another location that does do standard material stuff, but Ogden is just I would say 90% custom.
So, when you and I were chatting previously, you mentioned that getting those part materials, in particular, the couple that you mentioned, has just been a massive challenge and continues to be this year. The other thing you mentioned, which I hear from a lot of buyers, is you’re pulled in so many different directions on a day-to-day basis. So, how are you managing that? Where you’re doing a thousand different things, and yet at the end of the day, you still have to make sure you’ve gone through your to-do list and don’t drop the ball on anything?
I think the biggest tool that I have is that I kind of make a hot list of what I have to do that day, and hopefully, hopefully, I get through that hot list. Sometimes it doesn’t work, but the hot list will consist of things as they come in that day, of things that usually first come from my supervisor. If I get an email from a supervisor, I know I need to do that right away. Also, depending on what we are trying to do that day or that week or that month, basically goals that we’re trying to hit. I know one that we’re trying to do right now is we’re trying to get ready for a different MRP system to boot up, and so we’re trying to clean house of everything, which is becoming more difficult than it should be, but we’re making it as squeaky clean as possible. So, I know that’s on my hot list every day until that system has been inputted.
And then, what MRP system are you on and what are you moving to right now?
Right now, we are on the agent version of JDE. It looks like I’m working out of the 1980s. It’s a black screen, fluorescent words and letters and fonts. It’s pretty old, and we are going to a Microsoft Dynamics 365. So, quite the jump, but everybody is excited, and it’s actually the system I worked with previously, so I’m even more excited to get out of this old system. Yeah, I think one of the big challenges in our industry is clean data. So, if you have crappy data and you import crappy data into a new system, you still have bad data, and then your forecasting and your predictions are all going to be off.
I’ve definitely learned how to be flexible with my time because I’m always going to be pulled off to something during the day. I know that going into my day, I’m not going to get everything that I want done. I’m just trying to get my hot list as much as I can and trying to be open with enough of my time during the day. But even if I do get pulled off to find this or that or to look for parts, I won’t be left with too little time that I’ll have enough time within my schedule that I can still get back to what I need to get done that day.
So, one of the themes when you and I were prepping for this, and hence the topic or kind of the theme for our interview today, is around how to find alternative suppliers for things that are hard to source. You’ve experienced that in the medical industry, and now you’re experiencing it again, and it seems like it’s just been a big priority and focus for you. So, let’s start off with the why. Why do you care so much about having alternative suppliers?
With the supply chain as it is right now, it’s definitely gotten a lot better since the last two or three years. However, there are still a lot of challenges, like I said, with some of our sensors or thermostats. It’s really important that we get new suppliers for this exact reason. This one company in particular that we use just cannot get the material in, and so now I’m left trying to pick up the pieces after the problem has already come down. Whereas, if I’m being proactive and finding alternative sources beforehand, that probably won’t ever happen, as long as the second source is staying up on their end of the side. So, it’s definitely just helping. There has almost come like a life raft. If something completely falls apart on one side, I can use my other source to leverage not only the other company but also bring in material right away when we need it and we have stuff ready to go.
So, the next question then is how, so going and finding suppliers when there’s not many is tough. So, how are you even doing this, like where does somebody start?
Oh, that’s a tough one. We have so many suppliers that my first one is to go through as many suppliers that we have verified already. Just because the size of Chromalox, we have a ton of vendors and a ton of suppliers. So, I honestly, I’ll go through their info first. We go through distributors, so even if I get something completely different from one distributor, they might be able to help us out getting this other material. So, I’ll just try and cherry-pick, and I’ll just ask, ‘Hey, we have this issue of getting this part, can you get it?’ If that fails, then it goes down to me trying to find the part on a website. I just start browsing through the internet. I Google everything. It’s a wonderful tool most of the time. But, so I’ll start googling where can I get this specific part, and I’ll put in all the parameters I need. Sometimes, I would say 50% that helps. There are times where it’s so custom that it doesn’t know where anything is, and so then you have to start scaling back things like, ‘Okay, I just need a sensor that comes from a company who might be able to do it,’ and then it’s contacting this new supplier. Hopefully, this is like my last step, is finding a new supplier, but it’s contacting them, asking, ‘Hey, you make something similar, would it be possible for you to tweak your product a little bit and get this product out to us?’ That’s basically what I do if not daily, at least every other day, just trying to get new suppliers and then finding these parts that are custom that are hard to do anyway.
To recap, it sounds like you have some sort of master database where you have a list of “approved” suppliers that you’ll pull from first, and then if you can’t find somebody there, you’re going to good old Google. You’re a master Googler and researcher, and you’ll see who you can find, and you’re constantly doing that so you find something for every part or material and continue to populate your database.
Yeah, definitely. And I’ve had enough training from my job to give me the tools that I need to find all of this, especially because our master database, like you were saying, is so massive. We just have… I’ve lost count of how many approved suppliers we have, and it’s not easy to approve new suppliers at Chromalox either. Definitely trying to get someone new approved is the last step we ever want to take, but we have hundreds hundreds of hundreds of approved suppliers and we also have contracts with machine shops outside of Chromalox and specialty machine shops that can do special pieces that help us out quite a bit.
And so, if I’m getting a new supplier approved, it means there is a very big problem. So I’m trying to utilize the tools that I have in-house first before I ever try to go outside, and everyone knows that if we’re trying to get a new supplier, it means something is very wrong with what we already have going on. You’ve definitely made it seem like the vetting process is pretty stringent and difficult, which I feel like is the case for a lot of companies. What’s involved in getting a new supplier approved?
There are so many things involved. You have to make sure that you get their tax information, and you have to go through your company’s procedure, which, for us, involves a bunch of documents that they have to sign. We have to get their billing and accounting info. And not only am I getting this information, but it goes to my boss, who hands it off to her boss, and it goes through accounting and upper management. Our upper management isn’t even in Ogden; it’s in a different location, so that adds time to things. They’re located out in Pittsburgh, and there are a bunch of different departments and locations everywhere, which adds time. Making sure that it’s kind of in the schedule as well is important.
Chromalox is technically owned by a company inspired Sarco out in France, and they have extra things that they want the supplier to sign off on. Especially France is very environmentally conscious, so they always have new suppliers sign different things for that as well. It basically involves making sure I’m going through my company’s procedure, checking off the boxes, and then it’s handed off here and it gets handed off to another department. If they don’t see a big rush to get this supplier added, like for instance, I have a new supplier that I’ve been sitting on for about two months, and for what I need, that’s two months too long, sometimes they’ll get pushed. But generally, it is extremely hard trying to get a new supplier, and I’ve actually found that to be the same case in my previous job. There’s just so much vetting that has to go behind just the paperwork that it definitely takes a while. Well, I’ll be curious to see if over the next couple of years, that process becomes easier.
Yeah, if it’s a big enough challenge and you have a big enough need and you’re not able to service customers, sometimes that will cause management to take a look at the process and maybe make things a little bit easier, right? To make it easier for the supplier, because if it’s so hard to work with you, they may question, “Do we even want to work with this company?” Yes, definitely. And I’ve run into that before too. So, you get a new supplier onboarded, you go through this crazy difficult process, they finally get into the system, then you’ve got the next step in managing those supplier relationships. And it sounds like you have a ton of suppliers, you’re not going to have time and resources to focus on all of them. So, how do you prioritize your supplier relationships? And then for those strategic suppliers, what are you doing to build relationships with them?
I think the biggest thing for myself is always trying to get back to my supplier in a timely manner, or even if I send them an email saying, “Hey, I’ll look into this. It might be tomorrow by the time I can help you out,” but at least answering them right away. That helps so much with relationships, especially where, nowadays, a lot of communication is just over email. It’s not a ton over the phone like it used to be. Most of it is just email. And so, just even if it’s a quick email saying, “Hey, I’ll get to this. I’ll finish or we’ll fix this issue at least by tomorrow,” giving a deadline, and also being trying to be as flexible with them as they’re trying to be as flexible with us. And also, keeping in mind that most of the people I’m talking to are not the problem, if that makes any sense. Yeah, they’re just a messenger. And so, if I’m just trying to be as polite and kind to them, they’re more likely to work with me, especially if issues come up. So, just trying to keep the line of communication open as much as possible. Phone calls, for sure. I think phone calls are definitely an added layer of pressure if I need something right away. And then, like the ones that we work with quite a bit and the ones that have our biggest buy chunk, I want to say most of them are local here to Utah. And so, trying to keep open lines of communication to, whereas like we have cell phones, we like cell phone numbers, we meet with them all the time, we have the Reps coming into our office quite a bit, and just trying to work with basically trying to work with them as much as they’re trying to work with us.
Well, thank you for discussing how to find alternative suppliers for hard-to-source parts and materials with me, Rochelle. Where would you like people to send you if they want to connect with you or possibly reach out? I do have a LinkedIn page, I believe Rochelle Newman, it’s pretty easy to find that. I also have social media under either Rochelle Newman or Shell Weight, they’re gonna be linked up either way, but those are the best ones. And I’m pretty easy to find off my company’s website as well, that’s another route. If you missed anything, you can check out the show notes. You can find us by typing in What the Duck?! Another Supply Chain Podcast in Google. To have the optimal search results, make sure to include “Another Supply Chain Podcast” in your search to ensure you don’t miss a single episode. Make sure to follow this podcast and subscribe to us on YouTube. I’m @Sarah Scudder on LinkedIn and @Sscudder on Twitter. This brings us to the end of another episode of What the Duck?! Another Supply Chain Podcast. I’m your host, Sarah Scudder, and we’ll be back next week.