Talks With A World-class Purchaser

Many multinational OEMs in different markets are finding it best to"think globally and act locally." In automotive, the so-called"world car" has arrived, a standard global design involving resins,modular parts, and moulds that may be sourced in different regions aroundthe world. What is involved in such world-class purchasing efforts today?What is expected of part and mould suppliers?

To find out, IMI recently spoke with Guy Sterkens, global purchasingmanager of Philips Singapore Pte. Ltd. (Philips Sound & Vision, Singapore).Sterkens came to Philips from General Motors Corp. There he worked in purchasingfor the well-known negotiator J. Ignacio Lopez, and learned "how notto do things," as he says. Sterkens has been instrumental in helpingPhilips launch its "world television," its first standard globalproduct with regional supply requirements that goes into production inBrazil, the U.S., and Europe this year. Here is what he had to say:

INJECTION MOULDING INTERNATIONAL:Why did you come to Philips?

GUY STERKENS: When I was atGM, Philips was one of my suppliers for speakers. It was lacking in globalpurchasing expertise and I was looking for a career in the internationalmarketplace. I started with Philips Sound & Vision in Eindhoven inOctober 1995 and am, today, globally responsible for plastics, parts, andmoulds for its video, audio, and TV products.

IMI: Why did Philips wanta world TV?

STERKENS: BGTV [Business GroupTV, part of Sound & Vision, Singapore] wanted to restructure. It wantedto centralize development and reduce and consolidate the number of componentsrequired to reduce time to market. Philips wanted to develop a global standardfor TVs, with one centralized design center in Singapore at the BGTV factory,where the company has been for 20 years, and one design suitable to regionalrequirements. And, it wanted a more flexible, preferred supplier base.

We see to it that a good supplier stays healthy. With fewer suppliers,you can give a bigger slice of the cake to each supplier. This may involvelower piece prices and profit margins, but it means more long-term businessfor moulders. The world TV has been a successful project, involving substantialcost reductions. From now on, all projects will follow this procedure.

IMI: What kind of moulderswere you looking for?

STERKENS: Moulding is moreor less regional, and involves many transparent costs. You have to relyon the existing supply base in an area, and it is difficult to quicklymove away from one supplier that has dedicated volume and capacity. I mighttry something like persuading moulders to do subassemblies, but I do notforce suppliers into doing things they cannot do, like gas-assisted moulding.When you do that, you create problems for yourself in the end. You haveto find a moulder willing to share benefits. We check in on moulders everyfour to six months to discuss the best practices, maybe in cycle reductionsthrough better cooling. We ask for their help up front and during the project.

IMI: How do you find thesemoulders?

STERKENS: You check theirDunn & Bradstreet listing. A moulder may come back with a cheap pieceprice, but may be gone in six weeks. You want the company to be financiallyhealthy and cost competitive. You do not want a moulder with no other outsidebusiness. In our case, gas-assist capability also was a primary concern.We do not chase global labour prices, because we want part quality to bestable. We stay loyal to a moulder as long as possible, especially forlarger parts like TV cabinets.

We try to promote in-house tooling at the same location where we sourceparts. Fu Yu [Fu Yu Manufacturing Ltd., Singapore], one of our best suppliers,has in-house mouldmaking. You cannot expect every moulder to have it, butif it is available, it is welcome.

Regarding quality, we are introducing six Sigma-type standards, likeMotorola. Fu Yu also supplies Motorola. Such standards are a general trendin the marketplace. We negotiate PPM levels and make sure that qualityis built into the mould. We do not specify equipment for suppliers, ortell them they must only use one brand of machine. It is no longer possibleto do that. And we talk to machine operators, the people who do the trialmoulding, to see what they think of the mould.

IMI: If you could do the worldTV project all over again, what would you do?

STERKENS: I would have everyonecome in before we start the design. You need input before, not after thedesign starts. If not, you can lose three to four weeks in the cycle, and,with time-to-market pressures being what they are today, it is not easy.