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Deep Partnering

By Thomas Houdeshell, president, ATEK Plastics

“Deep partnering,” is the short story of how our small manufacturing business grew a $100,000-sales-per-year-customer to over $4,000,000 sales a year, in a very short period of time. Shortly after I assumed responsibility for ATEK Plastics in 2002, I was shocked to learn that one of our smaller customers ($100k in size) was sending their Director of Quality Assurance to cancel our contract.

Although we had a tool room with a good reputation, at that time, we had no partnerships established with our customers, suppliers, or employees. We didn’t have any lean manufacturing principles instilled in the organization, no matrix had been established, no reliable process-control documentation, no automation to speak of, and maybe most concerning, no in-house training programs had been established.

After rigorous negotiation and a great deal of dialog, the customer eventually agreed to give us six months to show improvement—or else the molds would be pulled, and the work contracted elsewhere.

I have found over the years that customer relationships are easy when you are shipping 100% good quality on time, but the true test of a customer relationship happens when you are faced with tooling, quality, and/or delivery disappointments—or radically fluctuating resin costs.

We knew the quality system had to be redesigned to communicate a free flow of information from customer complaints. The work procedure systems would have to be changed to become highly responsive to these complaints. We initiated a new training program by Christopher Avery called Responsibility Redefined. We changed our approach by deciding to do it.

No denials, no shame, no justification, and no blame games, we were going to have to take the responsibility and solve the problems quickly. Plus, we implemented several lean manufacturing tools—6S, fool proofing, kiazen, kanban, and visual manufacturing. We also implemented process control documentation procedures and responsibilities along with an extensive, technical in-house training program.

Each of us had become responsible for his own actions; it’s only human to deny, or lay blame on someone or something else, but it won’t help the team objectives any.

Like all other small plastics manufacturers, the variables of the industry itself provide sufficient challenges—like high resin pricing, low cost Pacific Rim competition, and variable raw materials costs. ATEK also had the misfortune occasionally of dealing with a bad mold someone else crafted.

It wasn’t long before we had an opportunity to foolproof a process—to make good on all those promises to customers. When ATEK engineers began to troubleshoot a customer assembly problem, the customer was very concerned whether the ATEK solution was stopgap or permanent, or, in fact, whether it would actually work. If ATEK’s approach was not acceptable long-term, the customer knew it would cost them a great deal of time and money. ATEK management countered the customer’s concern by offering to accept full monetary responsibility for the tooling and development cycle. It may have looked like a gamble, but we had to step up.

The end result was a permanent solution to the problem—resulting in production efficiencies and higher profitability for both the customer and ATEK Plastics.

How do we define “Deep Partnering,” and how do we put it to work? We define it this way: When customers trust you with upfront design concepts, tooling, creative supply chain solutions, and a mutually beneficial financial relationship, you have a start. What follows is the opportunity to serve them in a growing relationship of dependence between the organizations—taking responsibility, fulfilling expectations, and growing together.

ATEK has established the daily priority issues that ensure we fulfill our promises. High on that list are issues like continuous improvement, capital equipment needs, and even assembling the right people on the team. Outweighing these daily management challenges is a huge requirement to communicate with and build a relationship with the customer. The futures of our employees, suppliers, and the customers themselves may well depend on it.

One would hope that the success of companies like Toyota is partially (if not dominantly) related to their commitment to their suppliers through the partnerships they have established.

Does the size of a customer’s business matter in this question? No! As manufacturers, we have a tendency to overlook small customer opportunities in the spirit of booking more volume through larger accounts. But this is faulty thinking when you examine our experience. The 4000% growth may be above the norm, but very often a small customer account grows 200-300 percent a year. When you think about it, it is like a flywheel effect. Once it gets started it, the small customer brings its own momentum.

Certainly, most manufacturers know they have to create a solid team of employees, an organization that learns to speak with one voice, and one that will go the extra mile to exceed the customers expectations—work late, get up early, and even sacrifice—in order to deliver the quality goods that exceed the customer expectations on time and at a fair price.

The ATEK Plastics example shows that when a manager decides to build a culture around Deep Partnering, the employees and suppliers must aspire to the same levels of credibility and dependability. And when the customer invests in Deep Partnering with them, the financial rewards can be staggering in the custom molding and assembly business.