The "Come to-Know" Analysis

Enhance the success of international procurements by this important step in the Global Sourcing Process.

By Robi Bendorf, C.P.M.

(This article is the basis of an article appearing in April’s 99 Purchasing Today)

Most of the difficulties in taking parts made domestically to foreign locations occur because of the many things that you and the present supplier have come to know about the item that have never made it to the drawing or specification. Every part seems to have these "Come to Knows" and it is essential that you define what they are before the RFQ package goes out. Of course the "Come to Knows" often cause problems when switching domestic suppliers as well, but their impact is much greater in international purchases where the issues of distance, culture, industry practices, language, and communications are added. To give the Purchaser the greatest chance at a successful Global Sourcing launch, it is best to hold a "Come to Know" meeting so that everyone who has anything to do with the part can, as a group, go through the following check points:

• Confirm the results of the Global Sourcing selection criteria for the subject part. This is a good point to obtain the agreement of all cognizant functions that the part being considered is suitable for foreign sourcing and that the criteria used for selection, e.g. stable design, long term forecast, significant saving potential, etc, are still valid for the part and justify the considerable remaining efforts in the Global Sourcing Process.
• Have all documents referenced in drawings and specifications been identified and made available for the review session? This can be an interesting process particularly for items that were designed long ago. One organization found that no one in the "Come to Know" meeting had ever seen the specification which defined how drawings were to be interpreted even though it was still referenced on over 50 % of the part drawings used by the company.
• Have all non-company documents (Government/industry standards) been identified and made available for the meeting? Many foreign suppliers will not have copies of these standards so that it is best to review them, confirm their applicability, and transmit them with the RFQ.
• Are parts available for the review session? This is one of the quickest ways to discover the "Come to Knows". Having the group carefully compare the part to the drawings and specifications usually brings out numerous "Come to Knows." After such a comparison, one company was surprised to learn that a raw casing successfully supplied by a long time supplier did not meet the drawing. After investigation it was determined that 7 years earlier the supplier had added additional stock to the raw casting at the verbal request of the Purchaser’s manufacturing foreman to facilitate machining set up. No drawing change was ever made and had the parts been made to the current drawing they would not have been useable.
• Is there any requirement related to the part that is not in the drawings or specifications? An interesting example of this occurred when a US manufacturer received machined parts from a Korean Supplier who did not "break" all sharp edges, as is the standard US industry practice. As a result, inspectors received cuts on their hands from coming into contact with the sharp edges of the parts. In response to the Purchaser’s admonishment that "Everyone knows to break sharp edges," the Korean Supplier explained that he regretted the injuries but the Purchaser had instructed him repeatedly that it was essential to supply parts 100% to the drawing and since there was no instruction on the drawing to "break" sharp edges, he supplied the parts exactly as specified.
• Have parts, which will be sent to suppliers, been inspected against current drawings? In one humorous case a US Purchaser, having rejected the first article transformers supplied by a Taiwan supplier for having connectors that did not meet the drawing, was very embarrassed to learn that the connectors where actually obtained from the samples sent by the Purchaser.
• Have Addresses, phone numbers, and contacts been identified for US suppliers who are specified in drawings and specifications? Also in this phase it is important to confirm that the company names of those referenced have not changed through mergers or acquisitions.
• Identify the inspection methods that must be used by the supplier and confirm that the same method and equipment will be used by the Purchaser. Countless hours of frustration have been expended and international communications companies made rich by the endless arguments of whose inspection results were correct. Much of this can be avoided by clearly defining the inspection methods and equipment to be used by the Purchaser and Supplier.

Although space does not allow further detail the following check points are equally important and should also be included in the "Come t Know" analysis along with those already described:

• Is there any requirement defined in the drawings and specifications that is not being met by the current supplier and therefore should not be applied to any new suppliers?
• Have all outstanding drawing and specification revisions been incorporated?
• Identify any known manufacturing problems occurring with existing supplier and determine ways to eliminate with new supplier. Identify any tooling or inspection items that must be provided to the supplier and confirm that they are budgeted.
• Can overseas suppliers get the required material?
• Can overseas suppliers obtain all specified finishing and marking processes and materials?
• Is packing method clearly defined and does it take into consideration overseas issues such as corrosive ocean air or high humidity?

Like taxes, the "Come to Knows" are inevitable. The experienced international purchaser understands the importance of finding and documenting them through a "Come to Know" analysis before the RFQ is ever issued.

By Robi Bendorf, C.P.M., principle of Bendorf & Associates Consulting in Pittsburgh, Pennsylvania (click here for a bio).

http://www.bendorf.com