GM, Chrysler demand another $40 Billion - Page 8 - Mercedes-Benz Forum

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post #71 of 132 (permalink) Old 02-19-2009, 02:23 PM
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Originally Posted by bandit96 View Post
Bear, help me out here. You've seen this so I'm sure you know. Or can look it up on that monster database you've amassed!
What is the AVERAGE cost savings importing, say, threaded fasteners?
Using the following item as an example.

The little headless screw that is on the bottom of a breaker box that holds all the wires on the ground block.

Cost from the manufacturer in Peru Indiana for 50 Million per year was 34% higher than from the best price in China. I remember that number off the top of my head from 15 years ago. I can get exact numbers when I get to my DVD backup.

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post #72 of 132 (permalink) Old 02-19-2009, 02:33 PM
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There's a can of worms. Way too many factors. Volume and LTA are key factors. Having a dedicated rep on the ground in China is helpful. Forget shipping during Chinese New Year. Minimum of two day answer to any questions. Bribes still work. Chinese Govt. including military can trump your production at any moment. Factories have overbuilt and competition is making some go under. Unions have emerged and are driving up cost to the point that the ChiComs are outsourcing to Vietnam and other third world shitholes. Shipping happens when the container is full. Customs can quarrantine your shipment with 100 others if someone ships a turd. Certs mean nothing to them. Anything can be certified with PhotoShop. A MS Project schedule is only a suggestion. A week on their dock in Shanghai, two weeks at sea, a week in customs, and a week to your dock just to find out they ran the wrong dash number or used the wrong material or they are out of tolerance.

Bear is correct. They will show you anyone's work and even sell you a copy of the prints. Every other box that sits under the screw machine is destined for Chinese companies and is made off your tooling causing premature wear. The H-13 or A2 tool steel specified in your tooling spec turns out to be un-heattreated scrap steel. Thirty cavities in your mold turns out to be four.

Moral lesson: First time out of the gate you most likely will get screwed. Keep at it and foster your relationships and you will come out ahead as much as 20%.
That pretty much covers it from a Purchasing Managers perspective.

My very favorite story was of a screw that was being prototyped [this is a completely different rant] for a new product. The blueprint was FedExed to the Chinese Rep in Shaumburg Illinois. It went to China. A month later the package arrived via FedEx with the prototype complete. A loud, make that VERY LOUD WTF!!! came ringing through the engineering floor. Then howls of laughter.

The original drawing showed the dimensions of the screw then, the secondary drawing showed the PITCH of threads in an exploded view. The side drawing was shown sideways to the original screw drawing which led to the result.

The threads on the shiny new screw had been meticulously forged down the sides of the thread shaft instead of spiring around the shaft as any normal screw would. There was no thinking involved. Just blind execution.

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post #73 of 132 (permalink) Old 02-19-2009, 02:39 PM
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I was referring specifically to manufacturing of low end goods e.g. home depot nuts and bolts. You are extrapolating to all manufacturing.
Manufacturers of items for manufacturers used to depend on bread and butter items from hardware stores and small assemblies to augment their big manufacturing orders. Their profit model was set up to have both.

As an aside, while installing a window this week I needed 4" screws to put the window in to the house frame. The Home Depot screws, all made in China, and $.98 for 2 either spun out the heads or broke off in the wood no matter what drill, driver or application I used to try and screw them into the pine. I finally had to get a 2# box of deck screws from the ONLY US manufacturer to do the job correctly.

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post #74 of 132 (permalink) Old 02-19-2009, 02:54 PM
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Home Depot sucks.

This is somewhat of a recurring theme. Lexmark didn't always suck, but up to about 6 or so years ago when they got into the real low-end business, they did.

There are too many examples of companies who have a good thing going, and screw it up somewhere along the way. I think that event happens long before their decision to off-shore, but both are indicative of bad leadership.


...


I'm wondering if people won't start putting some sort of printed cards under the windshield wipers of Kia's and Hyundai's that say "Why do you hate America, asshole?"
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post #75 of 132 (permalink) Old 02-19-2009, 02:57 PM
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Originally Posted by mcbear View Post
Manufacturers of items for manufacturers used to depend on bread and butter items from hardware stores and small assemblies to augment their big manufacturing orders. Their profit model was set up to have both.

As an aside, while installing a window this week I needed 4" screws to put the window in to the house frame. The Home Depot screws, all made in China, and $.98 for 2 either spun out the heads or broke off in the wood no matter what drill, driver or application I used to try and screw them into the pine. I finally had to get a 2# box of deck screws from the ONLY US manufacturer to do the job correctly.
Hey, I sense a business opportunity for you.

McBear Jim Smith American Screws & Co.
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post #76 of 132 (permalink) Old 02-19-2009, 03:05 PM
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Hey, I sense a business opportunity for you.

McBear Jim Smith American Screws & Co.
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Remember, we are of the Liberal Intellectual Elite. We will teach others.

Screw
U

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post #77 of 132 (permalink) Old 02-19-2009, 03:05 PM
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We still have extremely high productivity. You are wrong about the ease of sending something offshore. It is much easier to do business here with your existing base but not always the most cost effective. Design for cost is a lost art. Not everything has to be a swiss watch. Reuse and reusability are not always thought of. Engineers feel its not a design unless they can start from scratch. Instead of using a standard 1.5" screw they will spec a 1.625" and be into a special order and become a long lead item causing holding costs for other components. Working for cost rarely means going with the low bid.
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post #78 of 132 (permalink) Old 02-19-2009, 03:11 PM
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post #79 of 132 (permalink) Old 02-19-2009, 03:12 PM
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I just hope its not another $30 or $40 billion of good money going after bad. If they don´t "change" dramatically then there is no end to the pain.
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post #80 of 132 (permalink) Old 02-19-2009, 03:13 PM
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We still have extremely high productivity. You are wrong about the ease of sending something offshore. It is much easier to do business here with your existing base but not always the most cost effective. Design for cost is a lost art. Not everything has to be a swiss watch. Reuse and reusability are not always thought of. Engineers feel its not a design unless they can start from scratch. Instead of using a standard 1.5" screw they will spec a 1.625" and be into a special order and become a long lead item causing holding costs for other components. Working for cost rarely means going with the low bid.
This was a point I hinted at earlier. One of the first elements of the Hardware Rationalization project was to bundle up all the blueprints for the screws, threaded fasteners, springs, pins and rivets and send them to suppliers. Each supplier got a box the size of a microwave for the 750 odd parts. It was a bit of a shock that there could be that many different parts. So I assigned a person to build a database of all the parts so I could sort them easier. Once we looked at what we had we realized that, in the same building, over two decades the wheel had been reinvented many times.

We moved the number of actual parts down to 65% and got costs down to just over 50% by reducing part count and supplier counts [they were effectively buying the same part from different people].

I would not be surprised if a very similar project could be addressed with Ford, GM, Chrysler to start cost reductions.

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