• Tip #1 Focus cost reduction activities only on parts with high annual spend

Did you know that a 5% cost savings on a single cost driver can save more than 20% on hundreds of different parts?

            1 part x 5%  savings on  $1-million     =  $50,000

            100 parts  x  20% savings on $1,000  =  $20,000

• Tip #2 Consistently poor quality is usually the results of too tight a design specification or inability of the supplier to control their process.  There are three options:

1. Work with engineers to review the design specification

2. Change suppliers

3. Develop supplier by helping them control their processes

• Tip #3 Improving a supplier relationship can lead to improved quality.

Who is more likely to provide better quality parts?  A supplier with which you have a good relationship or one you don't?

Answer:  Quality is manufactured into a product.  So, what does the relationship have to do with anything?  Well consider this... only a good relationship with  a key supplier will allow you to affect improvements to their process.  Call and we would be glad to share our success stories.

• Tip #4 Make sure your company has and complies with a formal code of Ethics.

Look at what is happening at some of the largest and best companies in the US such as Enron and WorldCom.  Ethics has always been important, but even more so today.

An enforced code of ethics provides guidelines when many gray areas exist in business transactions.   Management must provide responsible leadership in this sensitive area.  Often, a code of ethics, can avoid many appearances of impropriety.  Provide us your contact information below if to receive a copy of the code of ethics recommended by the Institute of Supply Management (ISM).