What the Duck?! Episode 38 Transcript
KEEP YOUR ENEMIES CLOSER: How to Work with Competitors to Secure Supply with Emily French
Welcome to What the Duck?! a podcast with real experts talking about direct spin 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 the supply chain. @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 material supply chain content.
Today, I’m going to be joined by Emily French, and we’re going to discuss how to work with competitors to secure supply. And yes, you heard that correctly. If you work for a manufacturer struggling to order materials from original equipment manufacturers, also known as OEMs, who are overseas and were greatly impacted by COVID, then this episode is for you. Emily is an estimator for Shermco Industries in Irving, Texas. Shout out to Texas. I’ve been a Texas resident now for about a year and a half. She started out as a temp to help with inventory cleanup and was not promised a position. Through hard work and dedication, she showed she wanted to work at Shermco. Welcome to the show, Emily.
Thank you. So, I am the oldest of four girls, and my second oldest sister, the one under me, is named Emily, and she is brilliant and by far the smartest and most academic of the Scudder fam. So, you have a good name. Thank you, thank you. So, Emily, you started your career as a buyer at Shermco. Talk to me a little bit about what you did as a buyer.
Perfectly, I would wait until our shop director sent over the parts request that we needed for the job that we were repairing, building, , and then I would issue the purchase orders to each vendor for what we needed, whether it be materials or perhaps an outside contractor that would repair any kind of welding that needed to be done or it’s called milling, like milling feet. It flattens out this deal so that it’s even when it sits on the platform.
So, when you were a buyer what what did you spend most of your time procuring. A large part of what we get is going to be bearings, right, can go from a bearing that’s the size of a ring that fits on your finger to one that’s the size of a car sometimes you have to get them from there’s a Komatsu is a vendor that sells them and they are for they’re they’re huge and so bearings and brushes and it’s not a brush that you think is like a hairbrush it’s actually a block of carbon um it’s referred to as a brush that was definitely a game changer for me because when they said you know we need to order these brushes and I’m thinking what do we put brushes in you know a wind turbine I know I immediately would think hairbrush or or like makeup brush makeup brush right you don’t think a block of carbon that’s actually making contact with what’s uh called a slip ring and then it keeps the electricity moving through the unit so that you see those big fan blades moving at the wind farms so I mean it’s it’s it’s an eye-opener it’s definitely different so why did you decide to Pivot from being a buyer to actually go into procurement.
I don’t know if I actually decided that. It was kind of decided for me. I’m very good at solving problems. My former boss says I’m a bulldog because I will go after it and I will find it. I’m determined. So they saw those skills, and apparently it works really well in procurement. So why Shermco? One of the things that I love about you is, as you said, your nickname is a bulldog, but you seem like a real hustler. And you found this company, wanted to work there. You were hustling, not guaranteed a job, and you really picked out this company for a reason. So, I would like to know why.
So, previously, I was a preschool teacher, and I had a daughter on the way, my last and fourth child. And I just wasn’t wanting to do little kids at home and at work. So, my best friend, who I actually ended up working for here at Shermco, she was like, “I think you’d be a good fit.” So, she brought me on, and it just went from there. I mean, you learn something new every day. It’s like a puzzle piece that you’re trying to figure out what goes next, how can I get it. I don’t know, it keeps your mind moving, and that’s what I want. I don’t want to just sit here and type at the computer all day. I like trying to find the solution.
So, what does Shermco do? I’m in Texas, but I’m in Austin, so before prepping and shouting for the show, I had not heard of the company before. We repair electrical apparatuses. That’s the fancy way to say it. We have our electrical division, and then we have our machine shop division, which is where I work. It’s for the machine shop. And what we do is, we do industrial and wind. We basically have the wind farms that you see out in West Texas, right? The generators that are in those turbines. Our field service pulls them down with a crane, and of course, sometimes there’s a delay in that with wind because, I mean, that’s hundreds of feet in the air. So, we pull it down, they bring it to the shop, we dismantle it, try to figure out what’s wrong. It’s not always the same thing, so it’s not a cookie-cutter shop.
So, you don’t build them, you fix them?
Yes, we repair them, and then we maintain them, and then we take them back and put them back up there and go to the next one. Interesting model. So, you must have noticed a niche where people were creating them but also didn’t have the ability or interest to service them. From what I understand, Pete Sherman, who actually founded the company in 1974, it was actually airplane motors they were working on. And then, yeah, they saw a need, and he stepped up, and it boomed because now we’re in Canada and all over the U.S. We help set up new facilities. They did one a couple of years ago in Africa. I mean, we’re all over.
Interesting. I’ll have to check if there’s anything in the Bay Area in California. I’m originally from California, just moved to Austin at the end of October 2021. So, I wonder if there’s anything in the Bay Area in California?
I know I buy parts from there, but no, I don’t know if we have an office out there per se or even maybe a remote location. But if we don’t, I’m sure they’re working on it. So, one of the other things I always like to do is follow people’s career paths to figure out how they landed where they are today. One of the other promotions that you had was to become a product line specialist. So, what is this? A lot of our listeners may not be familiar with this title.
A product line specialist is basically inside sales. It’s customer service. It’s you reaching out to the customer, if we’ve already got that relationship, seeing what needs to be done, what are their needs. Will they have an outage coming up? Then we get that motor into a shop for repair. We follow along with getting it estimated, what needs to be fixed, what doesn’t, and then just communicating our lead times, quoting, giving them the price, and then staying with that motor until it’s out the door for delivery. And anytime there’s a BP on the road or anything, answer questions, just basically keeping that line of communication open between us and our customer.
What was the most important lesson you learned in that role where you were interacting and customer-facing?
Let’s see, I learned that I’ve got to keep my boss calm so that we can keep everything smooth. So, as long as he’s happy, we’re happy. As long as we keep in contact with that customer and keep him updated, we’re good. Communication… I have some horror stories when I moved into my house in Austin. I ordered furniture, and most of it was delayed or didn’t arrive because of COVID, and I was shocked at how poor most of the communication was. Like literally not hearing from a supplier, reaching out, no response. I’d rather have some communication, even if it’s bad news, versus nothing.
Exactly, exactly. So now you are what is called an MSD estimator. What does MSD stand for?
MSD stands for Machine Services Division. Basically, what I do is I will follow our jobs once they get into what we call estimating or parts pricing status. I will then pull our requested list of parts, see who we can get it from, who we can’t get it from, see what our lead time is. Sometimes I will double-check. I’ll go out into the shop and I’ll get right in the dirt and mess with the grease and get the parts to a fabricator if I have to get it made. So basically, I’m just trying to get the best price, best lead time, so we can get it to sales quote to get out to our customer.
So, what does a typical day look like for you? When you get to the office, how do you structure your day?
Yeah, I come in with a plan, and the structure usually blows up in my face. It’s always something new every day, but a typical day, I’d come in, double-check with who needs what, where we stand. I’ll go over the jobs that I’m working on, see where I’m at, see if I need to reach out to my vendor if I haven’t gotten a response in a timely manner. Then I’ll go to my team leads, see what we need for inventory. I will get that on order. I mean, I do a little bit of everything. Sometimes I’m having to help with the front desk if one of our girls is sick. I’ll go back and forth with our payables department to make sure we get everything received in and ready to pay because, you know, you gotta pay those bills so we can keep our doors open. But yeah, it’s non-stop, but I mean, it’s fun. It keeps me busy. It keeps my brain moving, so I do enjoy it. I have my frustration from time to time. Who doesn’t? But yeah, it’s never a typical day because I can write it out because I’ve got a planner, and every afternoon before I leave, I’m like, “Alright, I’m gonna write this, this, this. This is what I’m going to do.” And I look at it, I’m like, “There’s no way I’m gonna actually do it in that order,” but I try to come in with a smile on my face and get it done.
So, how does being an estimator, which is what you are now, differ from being a buyer?
Being a buyer is more everything’s already laid out, and I just have to get that purchase order, get that order confirmation, find out that ETA, and follow it. Me and the estimator, I’ve got to stay on these vendors because I’ve got one in Austria that I’ve been trying to go after for three weeks now, and I mean, I wish I could take the holidays these people take. They’re always on holiday, and I’m just like, “I’m lucky if I get two hours of time to myself in a week.” So, but yeah, estimating, you just really gotta stay on top of the vendors to get the answers that you need.
So, it sounds like an estimator is maybe a little bit more strategic and more supplier relationship management focused, where you’re going back and forth and following up and kind of working with the suppliers more?
Yes, yeah, I would definitely agree with that.
Our show is focused on direct materials procurement. Most of our listeners work in manufacturing in some capacity. So, I always like to find out about the direct materials challenges that our guests are experiencing.
So, what would you say is the greatest direct material challenge that you’ve had to overcome in the last six months or so?
In the last six months, it would probably be our lubricants, our greases. Nobody has them, and you’re lucky if you can possibly trade with a quote-unquote competitor, which we have done. But we were searching online one day because we were out of our way, and we had to have this grease. We came across this little mom-and-pop lubrication website. Those people have been a godsend because they are literally the only place I can get these lubricants from. Even my bearing vendors don’t have them. They’re six, seven months out. I can’t wait six, seven months. But why is there such a shortage?
The short answer, and my favorite, is supply chain issues. So, I hate that phrase at this point. They’re saying they just don’t have the materials, and I guess these people that we found, nobody really knew about them. But now, we’ve, you know, our entire company uses them now, and they’re perfect. I even have had to tell one of my bearing vendors once to say, “Hey, you know, these people are your competition when it comes to that.” Some of the materials that go into the lubricant, the manufacturers are having trouble getting, so they don’t even have a product to be able to produce enough to meet the demand. That’s how it is coming across.
Yes, so one of the things that I think is really interesting about what you’ve done, and that’s kind of the topic for our conversation today, is that you’ve actually had this challenge getting lubricant and other things in the past and have actually gone to competitors to get products. So, walk me through why you decided to do this and how somebody who’s listening might be able to do this as well for the things that they are not able to secure.
Well, I mean, we’re all here to make money. We’re all here to have a productive business, and the relationship with this particular vendor was actually already in place through the previous estimator that was here, and they had worked together for years, and I built a relationship with him as well. And there will be times that he reaches out to me because he needs a drive-in slinger that goes into the bearing compartment, and I’ll have them manufactured, I’ll ship it to him, and he’ll pay it. I’ll reach out to him and say, “Hey, I need this encoder like yesterday. Do you have it?” Because apparently, we’re six months out. And because they’re a bigger outfit than we are, so they have a larger inventory facility. He’ll sell it to me. I mean, like I said, we’re all out here to have a business that’s thriving, so we’re not trying… You’re actually going to a direct competitor and saying, “We need these things. Do you have them in inventory? Can I buy them from you?”
That’s correct. I know it sounds crazy, but the relationship’s there, so we use it. We both do.
What about… So, my mind immediately goes to, “Well, I don’t necessarily want to have to contact and work with a competitor. Could I go and find alternative suppliers instead? Or could I work with my team and find some sort of substitute material?” So, have you had any success going out and finding alternative suppliers for some of the things that you weren’t able to get?
Yes, we actually have. We don’t always use our competitor. That’s kind of a last resort. But no, we have through different people that actually work here. Everybody has so many contacts in this world, and it’s kind of a niche business to be in because you don’t see a whole lot of people out there repairing wind generators. So, you know, it’s kind of like word-of-mouth. We had a guy that was actually a customer that told us about a bearing probe vendor, and we’d never used them before, but we started using them, and they’re always accurate, always on-time delivery, pricing is great. I mean, they’re even better than what you could get if you ordered from the OEM. And I can only imagine because it’s here and not overseas.
Yeah, so you have had some luck finding alternative suppliers, so you’re not solely dependent on one or two suppliers for everything, which is what we all strive for, right. We want to have backups and alternatives if someone is not able to fulfill your order. I’m curious to kind of dive into your inventory strategy? So we had a pivot in the industry for people wanting just in time, where they wanted almost no inventory, and they wanted things on demand. And now, we’ve kind of gone through the reverse where people were buying massive amounts of inventory and have supplies for two or three years. So, walk me through what your inventory strategy is.
Well, we, so our sales, our outside sales representatives, they talk to these customers on a daily basis. They get a feel for if they’re going to have an outage, if they’re going to have four units down or 25 units down. And some of them will know that what we need is somewhere in between there. If we keep that in-house, then we’ll be prepared because say we’ve got an outage that’s going to have 25 units coming down. They don’t all come in at once. It’s scheduled out two weeks between each one, per se. So we’ll have enough to say we’ll have 15 to do those units. So that time when we first get that first unit in, we can go ahead and put in for the 10 the next 10 units that we’re expecting. That way we don’t have too much, too little because your lead times are going to be, you know, three to four weeks or heaven forbid, 12 to 16 weeks. But you’ll have enough time. We luckily, we’ve had enough time to get that second shipment in. So then by the time we’ve used the first round, we’re good to go with the second. And then during COVID, so I would say the last couple of years, were you buying excess amounts of inventory and doing what I would consider stockpiling just to be safe? The first year we didn’t because business did slow down. It seemed to slow down everywhere around the world, right? There were certain items that we would stockpile on, not on everything, especially the items that we knew that it didn’t matter if what time of year or when they had it, they did have a longer lead time just because of the intricacy to complete the product and get it out the door. So it wasn’t everything we were stockpiling, just certain, certain very, very important parts. That’s the best way I can say it.
And what is, in an optimal situation, now when you order something for inventory, what’s a good turn time for you? About three to four weeks?
Oh, sorry, yeah. So you’re, you’re turning things monthly?
Yes, oh yeah. Okay, well thank you for discussing how to work with competitors to secure supply with me today, Emily. Where would you like to send people to find you?
They can find me on LinkedIn, of course. Everybody has Facebook. I don’t know if anybody really uses it anymore. It’s more of an Instagram thing now. But mainly, I would say LinkedIn under Emily French. 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. Do you have the optimal search results? Make sure to add “Another Supply Chain Podcast” at the end of 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 @SarahScudder 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.