Coronavirus breaking down global supply chain - the endless opportunity for West-European subcontracting industry

16 March 2020

Written by René Hol

There is panic in many purchasing and supply chain departments of Western European headquartered OEM-firms or Tier-1-strategic suppliers. Due to the coronavirus crisis their supply chains of components and modules are breaking down. Suddenly they experience the vulnerability and sensitiveness of long distance, strongly netted goods flows.

Western Europe hosts many highly professional subcontracting firms in machinery, sheet metal, plastics, wood and several other material and manufacturing technologies. Many of them have potentially the capabilities in-house to fill the gaps in broken supply chains. Moreover, they have a value proposition which provides a long-term business case for the insourcing OEM/Tier 1 company. Industry 4.0 – smart manufacturing – implementations have yielded manufacturing processes that are highly flexible and competitive from a costs-of-goods perspective.

Success factors

What are the key success factors for a candidate subcontractor to penetrate into broken supply chains? Most prominent are two:

  1. Capability to process customer’s product data into your systems and processes
  2. A hunter, must-win mentality in sales equipped with the right sales pitches to trigger movement at the OEM/Tier 1 supply chain side.

In previous contributions we explored the dynamics of product data management in a subcontracting firm. Those companies who have a moderate professional level of PDM-system in place, can act immediately towards potential new customers. With moderate we mean a few minimum required functions:

  • Managing of electronically provided customer’s item/drawing coding structures and mirroring them with internally used coding
  • Converting customer’s Bill-of-Materials into as-planned/as-manufactured constructs for the own operations and keeping the link to the original customer’s ‘as-engineered’ BOM
  • Adding routing (Bill-of-Labor) to the PDM-BOM’s either in PDM or in ERP so integral cost control of goods is in place
  • Understanding deeply customer’s change procedures and securing your product data management procedures are fit to process them.

The winning sales team

Regarding the ‘aggressive’, 100% survival of the fittest mentality in sales, subcontractors immediately should asses their current sales crew. Don’t hesitate to take some money in the hand to do this professionally and combine it with sales competency training. Most companies will discover that their current sales staff is not optimally equipped with the required competencies to win the customer in an unknown fighting cage. Two extremes must be merged into the winning sales team. First, skills are needed to act on top level, to be content driven, and to manage a lively process with the customer elaborating on in depth technology solutions. On the other hand, a real hunter, must-win mentality is a requisite.

And of course, the planning, steering and monitoring of the initiative is ‘Chef Sache’.

Do you want to read more about the dynamics of product data management in subcontracting firms? Read our blogs:

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