Manufacturers are always looking for ways to improve their overall bottom line and grow. In order to do this, some manufacturers are forced to change their suppliers or contract manufacturer (CM). Changing your suppliers is not something you can do quickly and expect to have quick results. It’s a process that takes time and care.
However, by taking proper steps and being well-organized, you will be able to change suppliers efficiently. In this post, we will go over what you need to do in order to change suppliers and how OpenBOM can help.
How to Change Suppliers
No matter the reason why you want to change suppliers, there are a few steps that you need to take. These steps might differ depending on your industry but this is the standard list.
Understand your Needs
You need to understand a bit better why you are changing suppliers. The most common reasons for changing suppliers are the following:
- Poor quality
- Too expensive
- Can’t scale up
- Bad communication
Depending on the reason why you are changing suppliers will affect who you chose going forward.
Since you know why you want to change suppliers, you know a bit more about what you need. The due diligence process is for you to be able to understand who the ideal production partner is. At this stage, you will evaluate a few suppliers.
Transfer Product Data
After you found a few suppliers that you would like to get quotes from, you can transfer your product data to them. This stage is also referred to as the request for quotation (RFQ) process. During this stage, you want to transfer everything that is related to making your product the new potential supplier. You should send the following to your new suppliers:
- 2D & 3D Drawings
- Bill of Materials (BOM)
- A prototype
- Your minimum order quantity (MOQ)
- Target price
After you send them this info, the supplier should provide you with a quote.
If you accept their quote and have thoroughly evaluated them and wish to proceed then you can request them to make prototypes. Prototypes are not necessarily made to see if the supplier can make the product because of the different processes used to make prototypes. The prototypes are made so you can see how they work and how the experience was working with them. If the prototypes come back like you expect then you can proceed. However, if they can’t get prototypes correct then you have something to think about.
You should have a few quotes and also a few prototypes made by a few suppliers. It is now time to make a decision on whether to proceed with the new supplier or continue with the existing supplier. For this example, we assume you will make the switch.
This step shows you are committed to transferring all or a partial part of your supply chain to the new suppliers. At this stage, you are doing the following:
- Finalizing the contract
- Opening tools
- Create work instructions for each fabrication step and assembly
- Start to train assembly workers
While this is a generalized process, there are some additional tips on how you can switch suppliers quickly. The main tip is moving to the digital era.
Digital Transformation and Changing your Supplier
One of the best things you can do to ensure you switch suppliers efficiently is to digitalize your processes. Digitalizing is not just beneficial for you, but it helps your supplier to manage your product and engineering data throughout the lifecycle of your product. A reason manufacturing companies use OpenBOM is to manage their engineering and manufacturing data. Having this data managed will also help you to switch suppliers. Here is how OpenBOM can support you to change your suppliers.
Share CAD Files
The way companies share their manufacturing data, including CAD files, is a bit different than how it was shared years ago. Rather than sending multiple different emails with multiple folders, you can now link everything to a single point of reference. This single point is usually the BOM. Using OpenBOM, you can link derivative files directly to each line item of the BOM. Meaning that if a supplier is using OpenBOM then the CAD file is right there. No more digging through files to find it. And no more checking revisions to make sure they are working with the most up-to-date file. It’s as easy as adding STEP, PDF, STL, DXF, and more files to your BOM directly from CAD.
You can also do this for other product documents, such as standard operating procedures (SOPs), assembly instructions, inspection procedures, and more.
Adds Order and Organization
Since you are working with a supplier already, you know how messy the process can get. Manufacturing companies have become very reliant on emails to transfer info to their supplier. However, this results in miscommunications, time delays, using wrong files, and more.
OpenBOM is able to bring everyone together to a single source of truth. By just sharing your account, your supplier will automatically have up-to-date information about the product and have all of the necessary files at their disposal.
Also, if there is something you don’t want to share with your supplier then you can just adjust their permissions.
Manage Revisions and Changes
If you switch to a new supplier then they might propose changes to some parts. The reason for these proposed changes is so they can manufacture the product more efficiently with their sub-suppliers or with their machines. Each change you make has to be tracked. However, manufacturers have not always done this. This has led to multiple problems.
If your supplier is using OpenBOM then they can see a list of changes and revisions made to each part. In addition, if your supplier requests a change then it goes through an approval workflow that only you can approve. Therefore, OpenBOM eliminates the risk of your supplier making changes you did not want to accept.
What can you do today?
If you are looking to gain a competitive advantage and navigate through difficult economic times then digital transformation is for you. The digital transformation will keep all of your product data together and manage your revisions and create an ECR/ECO process. Your solution is a centralized platform that connects your team, contractors, and suppliers.
OpenBOM is a cloud-based PDM & PLM platform to manage your engineering and manufacturing data. Companies from startups to Fortune 500’s use OpenBOM to create a centralized database to bring in, store and manage their manufacturing data. With this infrastructure, users also use OpenBOM to streamline both their change management and PO processes.
If you need to improve the way you manage your data and processes, share data instantly or collaborate with contractors and suppliers then contact us today for a free consultation.