News: Sourcing obsolete components manufacture
An automotive engines and gearboxes remanufacturer uses the Web to find suppliers for obsolete components and for the hundreds of complex components.
Monday, 25th February 2008
A UK specialist remanufacturer of engines and gearboxes for automotive OEMs, MCT Mitchell Cotts, uses online sourcing tools from MFG.com to find suppliers for obsolete components and for the hundreds of complex components that will be installed into an innovative marine propulsion unit. With 40 years of experience in the remanufacturing, MCT Mitchell Cotts has expanded activities to include a complete sourcing and assembly service to design houses. Often, designers of systems might not have a manufacturing or assembly capability and only a very small purchasing team, said MFG.com to manufacturingtalk.com. In some cases, they may benefit from a partner like MCT Mitchell Cotts to build the product for them. As MCT Mitchell Cotts purchasing manager, Nick Yates, explained, 'Our expertise is in assembly and managing the supply chain since all the components we use are purchased'. MCT Mitchell Cotts rebuilds engines and gearboxes on behalf of major OEMs such as Ford, General Motors and Land Rover. These products go back into the dealer network as replacement units for the aftermarket. This means the company is used to source components such as engine blocks, cylinder heads, pistons and gears for around 20,000 remanufactured engines and gearboxes a year - which adds up to 5,000 line items on its current contracts. A lot of these parts are initially sourced from automotive manufacturers themselves, but when the OEM stops producing a particular engine or gearbox it will no longer stock the components that MCT Mitchell Cotts needs. Finding new sources for these parts can create a number of challenges - not the least of which is sourcing them at a competitive price. 'When the OEM sets up the original contract with their supplier, this might have been based on a million parts per year,' said Yates. 'But by the time that product is no longer being manufactured, we may only be remanufacturing 100 a year. This means we have to source a component that may have been purchased in hundreds of thousands at 'one pound a piece' but have to try to buy just a hundred pieces at the same price'. * Time constraints - there is also a time constraint issue for MCT Mitchell Cotts. 'We only find out the availability of a component when we place an order and the supplier informs us that there is minimal or no stock left. If a GBP 700 gearbox needs a component that you were buying for GBP 1 and the part now costs GBP 10, then sometimes you will have to pay that amount rather than have twenty partly-built units tied up on the shop floor,' he said. 'So you have to look at what is a fair price in the circumstances. However, that it is not all. It needs to be a high quality component because the supplier will have to be validated by the OEM.' Yates explained: 'We can't just shop around at any suppliers, buy a part, install it in the sub assembly and not inform Ford or GM. It is a complex activity and there are many factors to consider. For this reason, we are using MFG.com to find the most cost effective quality sources'. * Global reach - with a truly global reach, MFG.com brings together buyers and suppliers throughout the world. As well as providing access to the world's largest network of suppliers, it also offers integrated sourcing and procurement tools that help engineers and sourcing professionals cut their time to market and reduce manufacturing costs. 'MFG.com is very easy to use,' said Yates. 'Creating RFQs (Requests for Quotation) is extremely simple. It doesn't take long to post enquiries and, because all the quotes come back in the same format, it is easy to identify potential suppliers'. He added: 'Having appreciated the potential of MFG.com in the remanufacturing business in our traditional areas of business in the automotive industry, it was clear that it would be a vital tool when it came to finding cost-effective suppliers for the innovative marine propulsion unit we are currently working on'. Yates said that the potential value of the work MCT Mitchell Cotts is sourcing through MFG.com on this project will run into tens of millions of pounds over a ten-year period. MCT Mitchell Cotts is looking to source maybe 600 components, including gears, castings and machined parts, and searches all over the world for them. The company demands quality, cost and response. Cost is the driving factor in determining the right price point in the market for the final product and generating high volumes. At the same time MCT Mitchell Cotts has to consider that it is talking of a 'cutting-edge' technology and the components are relatively complex - so it is not just a question of finding the cheapest quote. 'MFG.com is giving us access to a new type of suppliers and we are using the tool to manage the process of sending out the enquiries,' said Yates. 'It is much easier to use MFG.com to send enquiries out to multiple vendors rather than sending out 20, 30 or 40 individual enquiry packs to different suppliers. We only do the work once and the rest happens automatically'. Yates concluded: 'We could have done this without MFG.com, but we wouldn't have identified the new supplier base we have found, and the process would have taken much, much longer. In all probability we would have had to employ more people to deal with the challenge. MFG.com has proved priceless for our business.'