Avoid Contract Nightmares

May 16, 2003
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Discrete products manufacturers plan to spend more than $1 billion on quality services this year. Before your company signs on the dotted line, here are some things to look for.

Discrete products manufacturers plan to spend more than $1 billion this year on quality services, according to Quality's 2001 Annual Spending Survey. In many cases, contracting with a service provider is one way to prevent a job from falling behind schedule, or for some companies, from falling further behind schedule. Moreover, lining up work by a third-party firm that has the right kind of equipment can be a line of defense so that products don't end up as scrap or returned for rework.

Before signing on the dotted line, however, there are a number of key considerations. For most manufacturers, price, delivery time and customer service top the list.

At Quality Tech Inc. (Sterling Heights, MI), which provides contract inspection, General Man-ager Mike Young says that customers typically come to him when they're overloaded with work or lack the equipment necessary for a specific job. Young says that when a potential customer is interested in contracting his company, he sets up an engineering meeting to explain the services his company provides and the specifics of the procedure, along with the accuracy and expected output. "We try to scope out and plan for everything that is needed in terms of tooling and time, and then give a quote."

Bradley Ludwick, manager of contract house Detroit Precision Metrology Services (Rochester Hills, MI), adds that in addition to explaining the equipment and environmental control system capabilities of his high-precision dimensional metrology lab, it is necessary to find out what the customer is looking for in terms of measurement and expectations.

How much?
Price is always an issue for customers, Ludwick notes. So once he knows customers' needs, he says he might tell them "that their tolerances aren't tight enough for what we can measure and they can get a better price elsewhere."

Richard Robinson, a manufacturing engineer with Axsys Technologies Inc. (Rochester Hills, MI), a manufacturer of high-speed scanners, says it is this type of honesty and professionalism that he appreciates. Keeping the lines of communication open and developing a good rapport also are important aspects of professionalism. "When I say professionalism, I mean doing a job the way it's supposed to be done in every aspect," explains Robinson. He also includes being knowledgeable, courteous and getting the job done on time under strict time constraints in the professionalism category.

"I've always felt that you treat a vendor like you treat a customer, and in turn, you get cooperation," says Robinson. "People that come in, beat on the vendor to give them things and demand it, don't generate a good rapport." Communication and cooperation are essential.

Robinson, whose company has contracted the services of Quality Tech, says that first and foremost he was looking for a company that could provide precision. "We wanted something that would give us the best accuracy possible as far as doing mechanical measurements and the machining on a machining center." He adds that cost and delivery came into play as well, especially because projects were running behind schedule.

Young says that calls such as this aren't unusual. "A lot of Arial we get calls because someone dropped the ball along the line. We're the last step in terms of inspection before it goes out the door and the customer needs it right away because they're way behind schedule."

Although a majority of Quality Tech and Detroit Precision's customers are local, each has a nationwide network of customers. Robinson is amazed with Quality Tech's turnaround time of less than a day in some cases, a luxury facilitated by his firm's relative proximity to the contractor. But whether local or regional, if delivery times are met, customers will return, sources agree.

Caveat emptor
Ludwick advises the buyer to beware. "There are more and more accredited labs because of the requirements of the auto industry, but just because a lab is accredited doesn't mean that it's able to perform the measurements that you need," he says. "If you're looking for a contract service, you've got to do some investigation to make sure that the lab is capable of covering your requirements."

Manufacturers should also look for service providers who are willing to go the extra mile. At Quality Tech, Young says that developing lasting relationships involves more than just meeting demand. "We will not only do the inspection and hand them an inspection report, but we will let them know what we've seen when doing a fixture check. We're checking the fixture over and seeing if it's still in the specification it was a year ago. If we notice some wear and tear, we'll let them know that, so they can address the issue, instead of just giving them a report back with just some numbers on it."

Ludwick also says he can sometimes offer customers more than they bargained for because of his background in production machinery and his experience troubleshooting machinery problems. "I'm able to apply that experience to measurement as far as setup and results to help customers troubleshoot a problem," he says. The laboratory is backed by a high-precision machinery shop, so Ludwick can turn to other skilled people for opinions.

Follow-up is essential to ensuring customer demands are met. Ludwick says he not only reviews results with a customer when a job is completed, but he also stays in touch throughout the job to keep in tune with customer needs. "It's not an official survey, but we're in constant communication." Often he sends a preliminary report to the customer while he still has the part to ensure all the necessary data is included. Then if necessary, the report is tweaked to meet customer needs.

Spreading the word
Both Young and Ludwick agree that a majority of their business comes from repeat customers and word of mouth. If someone is happy with past work and service, they'll return and spread the word. Although Robinson was happy with Quality Tech's work, he hasn't had the need to contract further services from the firm, but says he "wouldn't be surprised that in the future we'll go to them again."

Young points out that repeat business comes not only from companies but also from individual engineers. "In the quality industry, people move around quite a bit, but they remember who they got their stuff checked with," Young ex-plains. "So we have an engineer who was with one company on Monday and the next week he's with a different company, but he still contacts us. So now we've maintained a relationship with the same engineer, but we've also developed a relationship with a new company."

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