Guest Post: The Value of Engineering Supply Chain Solutions (ESCS)

Photo Credit: Vaco Supply Chain Solutions

Photo Credit: Vaco Supply Chain Solutions

When the HZO Marketing team asked me to write a post for the HZO blog, I hesitated. After all, I’ve never blogged. What do these people want from me, I wondered? But after consistent hounding they finally convinced me it would be worthwhile to put a spotlight on why and how Supply Chain is a critical HZO function. So here goes.

After joining HZO just about this time last year, I realized there was hard work ahead to establish a robust supply chain. After all, HZO was a young company. Supply Chain covers a wide spectrum, but for today, let’s focus on Supply Engineering and how it contributes to a high-tech company’s success.

In some technology companies, it is hard coded that Supply Chain and Engineering collaborate on new products, almost acting like a joint venture to ensure cost-effective design, and that’s not blasphemy. At the most basic level, we all know when teams work well together, there is a higher likelihood that production timelines are met and new products have a higher chance to succeed.

Changing the Paradigm

During my first months at HZO, I dug in to better understand the drivers and cost structure of our technology and accepted the gauntlet to strengthen and formalize the supply chain. One of my early observations was that HZO could improve its go-to-market approach if Procurement and Engineering worked in concert to identify and purchase materials and parts. Since HZO has customers and Application Providers across three continents, one immediate opportunity was to develop a solid roster of suppliers that could handle large-volume manufacturing, pretty much anywhere in the world. Quickly, I started working to bridge the chasm with Engineering and initiating efforts to collaborate on design, not as a meddler, but for cost savings and to offer up the concept of Engineering Supply Chain Solutions (ESCS).

First meeting, modest resistance, but we pushed on. Procurement started looking at a series of projects already underway and illustrated where cost savings were possible if HZO deployed ESCS. The test cases were presented to recommend that ESCS become an essential part of every project, and to flag that early involvement by procurement could benefit any project.

When Procurement is involved early, benefits start to stack, including:

  • Reduced Risk: Select qualified suppliers from an approved and vetted vendor list. These suppliers have demonstrated the capability to support particular projects, thus greatly reducing multiple risks that could delay a deployment or project;
  • Even Material Flow: Develop strategies, solutions and plans for material flows based on business considerations and customer requirements;
  • Timely Introductions: Collaborate to think and plan in advance – offering the best chance to understand supply constraints and to achieve a timely introduction date;
  • Improved Profit Margins: Work with the technical team on a “design for cost” mentality, keeping HZO competitive and continuously improving profit margins;
  • Logistics Savings: Selecting global supply chain partners based on best-in-market costs and those with proximity, thus sweeping up logistics savings. (We confess, we’re real penny pinchers when it comes down to it.)

Now maybe you’re asking yourself, “ok, but what has HZO achieved with its supply chain efforts?” We’re quite pleased to say we’re on the supply chain bandwagon and we’re making progress. Procurement and our technical teams are working to speak the same language and ESCS is starting to root. At least from this seat, it seems that our super talented engineers embrace the challenge to design solutions and products that are faster, less expensive, and more sustainable in the global marketplace.

So here it comes, wait for it…..A gigantic “thank you” to the entire HZO engineering team in the U.S. and China for embracing Procurement.  I’m in more than a little bit of awe to the innovative ideas and designs.

Melinda Florio signing off on my first blog that was written on a 14 hour flight home from Shenzhen. Niihau………..

By: Melinda Florio, HZO Global Supply Chain Director


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