WINTER 2015

12 THE DISTRIBUTOR’S

12 THE DISTRIBUTOR’S LINK Laurence Claus Laurence Claus is the President of NNi Training and Consulting, Inc. He has 25 years of experience with a medium sized automotive fastener manufacturer, holding positions including Vice President of Engineering, General Manager, Director of Quality, Director of New Business Development and Applications Engineer. In 2012 he formed NNi offering technical and business training courses as well as technical consulting, expert witness and consultation work. He can be reached at 847-867-7363 or Lclaus@NNiTraining.com. You can learn more about NNi at www.NNiTraining.com. DISTRIBUTORS FIND OPPORTUNITY IN VALUE ENGINEERING Several years ago, shortly after I had gone out on my own, a fastener distributor inquired whether I was able to provide value engineering services. This distributor had recently entered into a multiple year, plant provider agreement with one of their customers. One of the provisions of their contract was a 7% year over year decrease of the total part package. At the time this seemed pretty steep to me assuming that the reduction had to come out of existing margins. I would learn, however, that such agreements were not uncommon, but fortunately the contract contained a provision that allowed for the supplier to receive offsetting credit for any productivity or cost savings gains gleaned from Value Engineering activities. If Value Engineering is a new term, this is simply a formal method or set of activities that can be applied to an improvement process to drive cost reductions, productivity gains, or quality improvements. In many instances it is referred to as “VAVE”, an acronym for Value Analysis and Value Engineering. Although some large organizations are able to employ complete staffs tasked with these activities, the reality is that most organizations either do not or cannot. Fortunately, any individual or organization with a desire to influence improvement can engage in such activities and, even relatively modest efforts, can often reap significant benefits. I come from a manufacturing background that is heavily influenced by automotive industry experiences. Early in my career these customers routinely had in-house engineering expertise related to fasteners, so although there was always room for improvement, I was accustomed to reviewing applications and improving on them in small measures rather than by large wholesale CONTRIBUTOR ARTICLE improvement. In fact, as I agreed to this project, it was not without some trepidation and concern that I would be of little assistance to my client, as the findings of this activity might not be worth the investment made in my services. These concerns were soon to be proven unfounded and I was once again humbly reminded that what we sometimes assume to be obvious isn’t also really so. The project itself was pretty simple- accompany an engineer from my client’s customer around the assembly process and identify areas and applications related to fasteners that potentially could be improved on or produce a cost savings. Pictures and notes were taken, later to be reviewed and more fully developed into ideas. These ideas were then presented to my client as areas for potential improvement. They would be responsible for taking the next steps with their customer. The following are a couple of the more interesting examples that presented themselves in this project. Although every VAVE activity will be different, these examples illustrate a couple of items that one might look for or find in a similar project. [1] Mixed Metals This manufacturer had a number of applications where a penetration made through a galvanized sheet metal panel contained a bolt or threaded rod which supported a complicated arrangement of nuts, washers, and wire loops. Figure 1 shows one of these examples. Upon closer observation one might detect the different color shades of the individual components and recognize the mix of stainless steel, zinc plated steel, powder coated steel, and galvanized steel components. CONTINUED ON PAGE 114