The prices of raw materials are increasing, and some items are out of stock and not available at any price. These challenges are causing production disruptions and cost increases. Many companies are experiencing high demand, which should lead to increased profits, yet the delays and rapidly increasing material costs are eroding margins.
Is it possible in today’s volatile market for businesses to reign in costs and maintain acceptable lead times?
I say, “Yes!”
It’s not uncommon for people in the business world to operate under “COVID incompetence,” resigned to accepting long deliveries and higher costs as the new normal. The reality is that with an open mind and with eyes set on the possibilities, the challenges of prices and lead times can be addressed head-on.
Here are 10 ways this can be accomplished.
Be open to new suppliers
Continuity and trust are important values that can make it difficult to consider a new supplier. In the past, many companies have worked to pare down their number of suppliers, but in this environment, that paradigm must shift.
The vacuum industry is plump with inventory – but it may not be within your normal distribution channel.
Since the start of the pandemic, GNB Corporation made the necessary adjustments to get through all the uncertainty. Our commitment has allowed us to embrace the challenges and demands of being a leader in vacuum products and components. With our advanced planning and willingness to invest, we have increased inventories to keep up with the demand.
Substitute parts for what is available
Thinking outside the box is not a gimmick. Shipping on time in today’s climate will require a lot of creativity and openness. Companies that embrace the value are finding ways to get the job done.
For instance, a rotatable flange is a viable substitute for a fixed flange. Or a full nipple can be cut in two to get two halves. Other examples include:
• Substitute 314L material for 316L—or vice versa
• Use welded tubing instead of seamless
• Use 60” max-width stainless plate then weld the plates together to get a large plate
Target slow-moving inventory
Slow-moving items are inevitable as the inventory turns. So instead of paying higher prices, expand pricing efforts to find inventory specials. Sometimes companies will provide a nice discount from the original price, just to move items that have been on the shelf too long. In today’s market, companies must design their products around what is available and affordable, whereas in the past the suppliers were willing to build whatever the customer wants.
Bottom line: Design your procurement in a manner that maximizes inventory specials.
Loosen noncritical tolerances
While many engineers use standard tolerances, many product features simply don’t require tight tolerances.
For ease of creating drawings, the common practice is to adhere to title block standards. But the next time you’re working with a design, remember that it might be possible to weld and go, which means you can optimize the machine-weld-then-machine process.
Chase simplicity and better performance
Combining features is an efficient way to gain simplicity and performance. GNB’s track record and excellence in custom designs lets our partners be nimbler.
Here’s a case study as an example: A customer was selling a legacy coating system. However, it was too tall for many buildings. The stack-up of the diffusion pump, baffle and angle together created too much height. Therefore, we designed and manufactured a low-profile angle valve with integrated cooling. By combining these features, we solved a design constraint and lowered the overall cost. In addition, assembly and installation times were reduced, adding to its market appeal.
Go with alternate materials
Here are a few examples of how this works:
• Valves can be made from aluminum or stainless
• Duplex stainless is often a suitable replacement for 304L
• If copper is unavailable, a baffle can work with either aluminum or stainless
Use different surface finishes
Surface finishes can be pricy. In some instances, a surface finish costs around the same as the material itself. For vacuum equipment, the surface finish can be over-specified. This flexibility lets designs go with bead blast instead of grained; grained instead of electropolished; or milled instead of Blanchard ground.
Rely on different technologies
Did you know that in-line poppet valves can replace some ball valves? By switching to a different technology, it’s also possible to save money and find an abundance of inventory.
Another option to consider is metal flex hoses over hardline fittings. There are fewer components and it is easier to install.
A combination vacuum pump blower and radiator is another savvy use of a different technology that eliminates the need to include a chiller.
Choose reliability, not the lowest price
The maze of finding a lower price may take you through unwanted shortcuts and dead ends that will lead to longer lead times. Consequently, the best overall value is not always derived from the lowest possible price. It could be best to aim for on-time delivery, which can save your company a large amount of money.
Consider working with GNB
We embrace the challenges and demands of being a leader in specialty vacuum products and components, especially during an unprecedented time.
We have more than 50 years of experience in creating world-class vacuum products that reflect our expertise and never-ending pursuit of excellence. You can partner with a customer-centric business that will work tirelessly to solve your needs without compromising, so you can achieve your goals of the highest order.