Several years ago I worked for a company that was self-described as traditional and professional. While working there, I experienced two entirely different methods of interaction between age-old rivals: Engineering and Purchasing.
As an older engineer, I was quite familiar with their traditional procedures which frequently pitted these two departments against one other, or at the very least, fostered a shallow relationship with poor communication.
The unwritten rules implied that one should take care of ones’ own department and never volunteer anything more than you had to when another department made a request.
This attitude meant that information was frequently omitted.
Engineering and purchasing seemed to speak different languages. Purchasing would sometimes make huge mistakes because they lacked information Engineering could have easily supplied.
Engineering sometimes chose high-cost versions of new parts due to a lack of pricing policy awareness. Purchasing assumed they knew what they were doing so it must be necessary. Again, this wouldn’t have happened if both departments had communicated more effectively.
One department usually came out ahead during investigations of these events, and its members often felt they had won the battle. However, other departments and many of our customers could see these incidents were helping the company lose the war.
A few years later the company was forced to change through customer-driven initiatives. It adopted new quality control plans and methods of operation that greatly emphasized internal communication and collaboration. What an amazing coincidence!
Implementing Collaborative Material Review Meetings
Those of us familiar with the traditional methods felt that our privacy and sovereignty were about to be destroyed by these new initiatives. We reluctantly began to implement them because impending financial ruin is a powerful motivator.
Thankfully, it wasn’t long before we discovered that they weren’t asking us to do their work for them or subordinate our own goals. They just wanted us to communicate internally and externally as valued members of a team to conduct mutually beneficial business activities.
We began to have much more open and frequent meetings, mixed meetings with vendors and customers, and reports combining information from multiple departments. Engineering and Purchasing were truly collaborating for the first time.
Almost immediately, real progress was made in cutting costs.
Case Study 1: Tantalum Capacitors
One of our products utilized a BLDC motor driver board that, at that time, had included some tantalum capacitors in its design and had been in production for about ten years.
Unknown to the Engineering department, a sharp ramp-up in price had occurred over the last several years because tantalum had been declared a conflict mineral and became harder to source.
The Purchasing department knew this but at that time, they assumed that those capacitors had to be of the tantalum variety.
The new meeting styles now EXPECTED such matters to be raised for mutual Engineering and Purchasing collaboration and the tantalum capacitor issue was placed on the table for discussion.
Everyone knew that we were about to make significant progress when Engineering asked (to no one in particular) “Why, on earth, does that board have tantalum capacitors?”
An hour later, the new Purchasing/Engineering collaboration group found cost reduction ideas at multiple levels:
- Non-tantalum capacitors could be tested to see if they could be used.
- The existing source was called and revealed that the original specifications required specialized lead-wire bending that was now actually causing assembly problems. - - - Eliminating the lead-wire forming would alleviate problems and reduce the part cost.
- A serious review of the design revealed that five of the six tantalum capacitors were no longer needed because they protected a field programming interface that was never used in the end product. Several other components could now also be removed as well.
- [This one is my favorite]: A review of the product development records revealed that tantalum capacitors had been used in the initial prototype because they were the only capacitors of the correct value that the technician could find in his parts box that day. There had never been a reason to require tantalum capacitors!
Few of the discoveries made were as dramatic as this one but, collaborative reviews sent product costs falling throughout our company.
Reactions to impending problems were also greatly improved.
Case Study 2: Thermal Protectors
During another meeting, Purchasing announced that a thermal protector device used in our products would no longer be available, starting in just two weeks. They knew and lamented that the protector was a safety device that our products depended on for retaining their Underwriters Laboratories (UL) listings. Months of testing was usually required by UL to qualify a different protector.
The Engineers in this meeting announced that a few months earlier a European thermal protector manufacturer had visited with Engineering to propose a project (I think they knew what was coming). They offered to pay for, and host the UL testing of a suitable substitute for our existing protector if Engineering agreed to recommend their device to Purchasing as a pre-qualified alternate. All of the required UL work was very nearly done already, and at no cost to us!
A disaster had been averted through better communication.
A decade ago, a side-project like this would have likely been filed away in Engineering and never discussed with Purchasing.
Again, few cases were as dramatic as the two I’ve given in this article, but a great deal of progress was made through close collaboration between Engineering and Purchasing.
Proactive Takeaways You Can Apply for Better Decision-Making:
- Hearing about the market challenges faced by Purchasing helped Engineering prioritize their projects better as a whole.
- Regular access to Engineering removed a huge barrier to progress for the Purchasing department who, in the old days, would have had to make formal requests and wait days for answers that were never very helpful.
- Observing the complexities of component pricing that Purchasing faced every day alerted Engineering of the need to consider these issues carefully when selecting components to specify in new designs.
- Collaboration provided an opportunity for Engineering to warn Purchasing about impending changes that are likely to affect costs such as changes in safety regulations, changes planned for existing products, changes in laws that may affect components or concerns about new defects found in existing parts.
- Daily collaboration provides an environment in which engineering insights can be applied to new issues reported by Purchasing.
- Engineering can inform Purchasing about new solutions made possible by new technological developments.
The best result of all of this was greater hope and excitement for the future of our work and the future of our workplace. Implementing a collaborative work environment in your own organization will take a little bit of effort, but the collaboration, strengthened relationships and savings to the company will be more than worth it.
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