Sourcing

The Sorcery of Sourcing

Want to optimize costs in sourcing? The best method is to gain an intimate understanding of your suppliers’ products and technologies.

It’s perhaps no coincidence that the word “sourcing” sounds a lot like “sorcery.” A good sourcing manager can indeed appear to know black magic. But Lenka Hrušecká, Sourcing Manager Holic & Projects at Fortaco Group, says doing the job well comes from a combination of relationship building, pure curiosity, and a willingness to understand the suppliers’ world.

Relationships matter

Sourcing is finding the right source for the right costs and right quality with right delivery. “My job is to ensure that the components for everything we assemble in our factory has a source,” says Hrušecká. “That means we build relationships over the entire supply chain and challenge suppliers to improve costs. But not only costs. We ask they improve delivery, quality, and bring innovations and new ideas.”

Hrušecká’s team deals with approximately 200 suppliers, with around 50 of those considered strategic partners. “It’s impossible for our team to know all 200 personally,” she says, “so we invest real time with our strategic partner suppliers to whom we’re closely connected. We invest time in suppliers who want to grow with us, have a good combination of offerings, have the potential to be innovative, and can offer R&D support.”

Depending on your industry, 200 may seem like lot of suppliers, given the constant challenge to streamline and reduce the number of partnerships. “Before you can reduce the number of overall suppliers, you have to develop your strategic suppliers,” says Hrušecká. And that’s done through as many face-to-face meetings as possible with suppliers and her team, as well as category managers. The objective: learn their businesses, learn the cost drivers, learn the limitations and technologies.

Curious about screws

There are always calls to bring down costs and improve cash flow. But in order to do that Hrušecká says you have to understand what’s behind the prices, and what factors ultimately influence the final price. “You’ve got to have a hunger for information. You’ve got be curious about material groups, like screws, polycarbonates, even the simplest materials. The most basic screw will have a huge story behind it.”

For example, suppliers can tell you how the screw is treated and whether it’s possible to reduce the variety of screws used in assembly. “Suppliers can significantly reduce your costs by not only reducing the price, but also by proposing solutions to reduce assembly time, administration, or warehousing,” she says. “Suppliers, if there’s a good relationship, can offer better tools to allow operators to work faster and more efficiently, and they can support you in bad times, as well.”

“Glue is another example,” says Hrušecká. “How’s it made? Is it curing too long and influencing the final product, and final costs? And polycarbonates: what’s important and what differentiates them? High optical, low optical? What are the regulations and norms? Ours is a strangely wonderful business. You’d probably never imagine that suppliers talk about cabin glass with love!”

A fresh, female approach

Hrušecká studied marketing in Bratislava, worked in media, advertising, and then found herself as marketing director at Bratislava's biggest shopping mall. Moving to western Slovakia with her family, she joined Fortaco as a junior in the sourcing department. "I wanted to learn the business from the ground up," she says, "so I studied drawings, absorbed the technical details, and after six months I was responsible for ready-to-weld parts." She bounced around a bit in the industry, but returned to Fortaco, becoming sourcing manager for three Fortaco factories across Europe dealing with cabin and vehicle assembly.

Hrušecká loves the teamwork in what is a predominantly male industry. "There are very few women in the factories, and women perceive different things than men. This combination actually makes for a great team, though it’s not always easy to convince men of this.”

"I once told a future boss in an interview that I was creative and improvisational, and he suggested improvisation wasn't the best approach to the job,” she says. “But since then I've seen the approach bring some very interesting solutions for customers. This way of seeing the world can really impact the numbers."


From Safety Cop to Safety Culture

Changing the way safety is viewed in an organization.

Safety has traditionally been a matter of compliance. Pity the safety specialist, the compliance officer responsible for filling out reports, recording infractions and sending information to management.

"Historically, people on floor think someone else is responsible for safety. That someone else is a safety policeman," says Andrzej Wrona, Operational Excellence Director at Fortaco Group. “And lots of people don’t like the police.”

What doesn’t work

The safety policeman approach may be popular — it has many years of manufacturing tradition behind it. But it's being shown to be ineffective. "The policeman approach either doesn't work or its effect is temporary," says Larissa Shabunova, Managing Director of Fortaco Estonia. "You can issue a lot of rules, you can make demands, but the only thing that’s effective is constant reminders, trainings, and showing examples from other factories."

Shabunova’s statement is borne out by modern research, which shows safety cannot be disconnected from quality, delivery accuracy, and productivity. Record safety goes hand in hand with record performance. With that in mind, Fortaco is working toward transforming its safety cops into culture creators.

From the top to the shop

But just as the lone policeman cannot be effective, it isn’t possible to assign one individual to create a safety culture. Safety must permeate every level of the organization, from top management to the most junior employee on the shop floor.

Buy-in must start with not only group-level management, but with top management at every production site, as well. “We spend a lot of time doing night audits to show people that top management is involved, says Yuri Krupinin, Fortaco Estonia's QHSE Manager. “We’re not only present, but we’re leading by example. Safety starts with us, and you’ll see the director wearing a hard hat. We don’t ask people to do anything we don’t do ourselves.”

Asking employees to take part is critical, because there are barriers which simply cannot be broken without them. “It’s difficult to get your LTIF rate below five or six without employee involvement,” says Andras Csizmazia, Head of QHSE for Fortaco Group.

Hard heads and transitions

Historically, Fortaco has required hard hats to be worn by employees operating a crane from the floor. Welders and forklift operators were not required to wear them. In 2018, Fortaco weighed its options to make hard hats obligatory for all.

"We could have issued an order and then administered warnings and punishment, but we tried another approach,” says Larissa Shabunova. “We bought a variety of helmets, tested them with management when we went to production. This allowed us to both see which helmets met our needs, but also demonstrate to workers that we were wearing them. We chose three suitable models, and then allowed middle management to choose the one they liked. They started showing up on the floor in them. Then we added shop floor supervisors, department managers, and team leaders, slowly moving down the chain. We never issued a formal order, though we told people hard hats would eventually be required. Finally, when we approached the workers there was little resistance, because they'd already seen us setting an example for several months."

As of January 1, 2020, everyone in a Fortaco factory in Estonia wears a hard hat.

The workers know

Educating workers about what’s unsafe isn’t the real challenge according to Agnieszka Koziara, Fortaco's SVP People & HR.
“I have a feeling that people know exactly what is safe and unsafe. I know that if I’m hurrying to pick up my kids, I know that’s dangerous and improper. We have to be honest with our colleagues and with ourselves.”

Koziara says the challenge of creating a safety culture lies in convincing workers that safety at work is as important as safety at home. “Why don’t we take responsibility for our colleagues at work, just as we take responsibility for our family members at home?” she asks. “If you see something unsafe you need to say ‘stop.’ I think there’s a barrier in our minds.”

Teaching safety

Larissa Shabunova has tried to cross that barrier one step above the individual level: with the team.

In order to improve efficiency we need to empower team leaders. "Before, a foreman managed 50 to 60 people, which is far too many. A leader should be responsible for a maximum of 15 people. We selected the best workers to be team leaders, since they were unofficial leaders, anyway. The team leaders became ambassadors of our values, with safety as one of those key values.”

What’s the most impactful teaching tool for safety? Many believe it to be real-world examples. Since human beings are by nature curious, and often competitive, frequent trainings and constant emphasis on safety should include information from other factories.

Fortaco Estonia's Yuri Krupinin organizes trainings for welders and bending machine operators. His sessions include not only safety requirements for each task, but fault and deviation figures from other factories. It’s also routine to distribute accident reports across the Fortaco organization. "If you show real situations, not stuff from the newspaper, then it's very effective," says Krupinin. "Forklift drivers are always curious about forklift drivers in other factories."

Tomorrow’s safety education

As technology develops so will safety training. "If we’re going to have trainings," says Andrzej Wrona, “then let’s make sure we benefit from it. I believe that virtual reality training can be very effective and is a good option to consider in the future. Put people in unsafe situations in a virtual setting. Make it interesting and deliver a message.”

Regardless of modern tools available, the most effective safety tool will remain the one between the worker’s ears. That tool, combined with the clear understanding that the employee is actually encouraged to stop work if something is unsafe, will bring Fortaco closer to its goal of zero accidents.

It’s a cultural shift that won’t come overnight, a step toward Eastern philosophy, as Yuri Krupinin describes it. A workplace environment where it’s clear one impacts his own safety, and a company that has your back. “If you’re part of our company,” says Krupinin, “then we’re here to teach you, not to blame you.”