Relationship Between Manufacturers and Suppliers

OEM's and Tier 1 Suppliers

OEMs create and manage manufacturing supply chains every day. OEM’s often need a range of manufacturing suppliers in their supply chains. They select potential suppliers, release requests for qualifications (RFQs) and request for proposals (RFPs), evaluate responses, and grant contracts.

This includes Tier 1 suppliers who directly supply the OEM's. Often they produce large volumes of products, have invested in the newest technologies, and can easily connect with OEM’s. Both OEM’s and Tier 1 suppliers can be seen as the drivers of manufacturing supply and value chains.

In the best cases, these Tier 1 suppliers fit seamlessly into the supply chain and deploy cutting edge technologies and methods. They keep production and transportation time and costs to a minimum while maintaining consistency and quality of the products. Challenges often arise when these Tier 1 suppliers need to rely on the smaller Tier 2-4 suppliers, also known and Small and medium manufacturers (SMMs).

Over the last two years, the focus of the Request for Discovery (RfD) process has been to engage Nevada-based SMMs with both OEM's and Tier 1 suppliers regionally and nationally. Supplier Discovery and the Request for Discovery technology are designed to address several big questions:

  • How do OEM’s identify the right suppliers when they are not down the street from each other?
  • Can the inefficiencies of the existing RFQ and RFP processes be addressed via an “IP free” relationships between a potential supplier and the OEM?
  • Are required process geometries a critical, untapped component to efficient qualification of potential suppliers?

Tier 2-4 Suppliers

These smaller suppliers often specialize in critical manufacturing processes that are of interest to the OEM’s and Tier 1 suppliers. They can also play an important role in supplying needed components to maintain large-volume manufacturing equipment.

Furthermore, some of these smaller suppliers are quite nimble and have begun to engage new advanced manufacturing and rapid prototyping technologies as they come on line. These technologies have been demonstrated to decrease both prototyping time and costs.

Traditionally, these smaller suppliers were located in proximity to OEM’s to ensure effective business relationships. Outsourcing and off shoring of manufacturing has shaken these working arrangements and left many smaller suppliers isolated from their traditional business customers.

As mentioned above, new tools like PLM can help connect the non-localized supply chain and allow for integration and synchronization of the suppliers across space and time. However, these tools are critically dependent on the initial identification of the right suppliers.

These are critical drivers for Supplier Discovery. Under the Request for Discovery (RfD) technology, OEMs and Suppliers can exchange requirements and capacities without having to establish a legal relationship. The RfD can go to hundreds of potential suppliers instead. A process that is much more likely to indentify new and impactful suppliers. The best potential suppliers from the RfD process are now added to the standard set of suppliers included in the RfP/RfQ process.

SupplierDiscovery/MfgandSuppliers (last edited 2012-08-09 16:11:46 by steve)