Expert tips for procurement
„You can only be as good as the suppliers you choose – particularly in a volatile global economic situation like the one caused by the coronavirus pandemic.” That’s according to Harald Böhm, Head of Strategic Procurement at Roto.
Harald Böhm and his expert colleagues have been buying everything needed to produce hardware or locks in the plants all over the world for over 20 years. “This involves us estab- lishing a strong partnership with our suppliers. As such, we do not differentiate ourselves from the window manufacturers who buy from us,” he explains. “Those wanting to sell products of equally high quality need good suppliers and clear specifications on how these are selected.”
Supplier check
There is a defined quality approval process for all purchases, which also includes tests in the International Technology Centre (ITC) in Leinfelden. “Here, we don’t just carry out the traditional tests in accordance with RAL, we also check the requirements of other international markets,” reports Böhm. Once the manufacturers have undergone extensive supplier checks at Roto, the supplier’s products are tested, in sometimes complex test configurations.
As part of the supplier check, the efficiency and sustainability of a potential supplier are assessed according to over twenty criteria. In so doing, the auditors look at issues such as the company’s vertical range of manufacture, how they deal with resources and materials, at the quality of tools, the condition of production sites and the testing methods and laboratories. Böhm explicitly recommends this very thorough and systematic examination of a supplier to fabricators of semi-finished products too, such as window manufacturers who purchase hardware.
Performance audits
“When we plan the introduction of new products and systems, such as Roto NX, then suppliers who could participate are always checked thoroughly according to the same structure,” explains Böhm. “For instance, audits are performed on site to determine what a manufacturer can offer Roto and, therefore, window and door manufacturers around the world. For German producers, that’s quite normal, according to Böhm. Abroad, things are often quite different.
“Roto is also ‘german made’ worldwide thanks to comprehensive supplier assessments.”
This is because Roto’s suppliers across the globe are actually audited and qualified in ac- cordance with German standards, where this is by no means part of the national standard.
Feasibility analyses
If entirely new components are needed and acquired for a hardware system, the supplier check begins with a feasibility analysis. “Of course, from decades of experience in industrial hardware production, we are able to accurately assess what is feasible with established technology,”explains Böhm. “We also know what tasks can present a challenge even for very experienced suppliers. But this does nothing to change the requirements for supplier quality.” This is why Roto is both a demanding and inter- esting dialogue partner for its suppliers.
Böhm recommends requesting that each company you entrust with solving a problem produce a feasibility analysis that has been carried out professionally. Its findings must be presented in writing by the supplier and can lead to a legally binding agreement.
“Roto has contractual agreements with the around 100 most important suppliers.”
Far beyond the industry standard
The type and scope of Roto supplier checks go far beyond the average practices of manufacturers in the hardware and window industry today, explains Böhm. “We are far more critical than others. Our suppliers confirm this. But we know that this is quicker and better for us in the medium-term since we can forgo the time-consuming trial and error approach.” Here, Roto lives by the motto “Do it right the first time!”.
Process reliability
The process reliability of a supplier is also examined in detail as part of the check. Ultimately, it must be ensured that the defined quality of the goods or raw materials to be supplied is ensured in the long term and not just for a brief period. This approach sometimes even means that we subject a supplier to verification practices and specify measuring tools with which they must record and document their product quality.
A greater focus on system relevance since 2020
A new introduction last year was an additional, particularly thorough evaluation of the economic situation of the “system-relevant” suppliers. “We precisely analysed which suppliers we would not be able to replace in the short or medium term, should they have to stop their operations or should they become bankrupt,” reports Böhm. Roto has been monitoring the group of companies identified as part of this analysis very closely since summer 2020. Every month, Roto reviews the most important economic key performance indicators, which are also collected from major credit bureaus. “We also have phone conversations with these suppliers on a regular basis, covering topics such as the effects of measures to protect against the coronavirus on production.”
Product quality that can be relied on in the long term
Clear specifications given to Roto Procurement by the company management have, through a robust supplier development process, ensured long-term reliability of product quality for many years now, even in times of crisis. Every month, the plants worldwide measure how the services of a supplier are developing with regard to product and delivery quality in accordance with defined and uniform standards. “If quality, reliability or service deteriorates significantly, we intervene quickly to avoid any subsequent effects and minimise the quality risks for our customers.” However, if everything goes well and according to plan, Roto will also be amongst the supplier’s very loyal and reliable customers.
“The actual challenge is to produce the quality we expect at market-oriented prices.”
This is why Roto takes evaluating, selecting and managing suppliers very seriously. With the gratifying outcome that materials, com- ponents and services currently meet almost 100% of Roto’s objectives. He explained that quality assurance processes at suppliers have also increasingly become a matter of course over the years, as well as becoming more robust and thus affordable – resulting in measurable added value for Roto customers.
Commitment as the deciding factor
Böhm’s conclusion after many years working in procurement: “The strategic orientation of the supplier structure is a key requirement for out- standing product quality for any company. If a supplier is not viable, they will cost a great deal of money in the long-term.”
Mr Böhm, do you have a secret tip for selecting the right supplier?
“If we assume outstanding product quality, you need to take a look at the commitment of your dialogue partner and the quality of the organisation in their company. If both are right, then the continual development of product quality at the highest level can also be ensured in the long-term.”