By Sonu Kalavara, Head of Supply Chain at Advanced Watertek
In this article we will describe our way of working when it comes to procurement, sourcing and supplier relationship management. We rely on customised design and craftsmanship and we are always looking for the best components in the market.
Water treatment is a very focused and specialised application, hence there are very few suppliers in the market. In fact for membranes there are only three key suppliers, and they all have been in the industry for 30-40 years. Still, we continually focus on finding new suppliers, innovations, products and components that can enhance our systems and solutions.
Dealing directly with the manufacturers
We prefer to deal directly with a manufacturer, and not through a distributor. This is actually one of our core principles when it comes to procurement. However, most manufacturers prefer to use their distribution chain, but we always do our best to convince them to deal directly with us.
We have a long tradition of visiting the factories where components are made. MF, our founder and Managing Director, started doing this 35 years ago, and we still do it today. We actually see this as an important part of our quality management.
The relationship with our suppliers is important to us. We therefore make sure that we follow high ethical standards and best practices in supplier relationship management. We are also very proud of our good paymaster, as we set our pride in pay all suppliers on time. In addition we aim to avoid extended credit terms. And of course, it is important for us to have contracts and NDAs in place.
Travel and sourcing
We believe that “Procurement & Sourcing” has an advisory role for the company. We therefore travel to trade exhibitions all over the world to look for new components and solutions. It is our responsibility to pass the information to our peers (Engineering, Production and Sales). As a company we must keep our eyes open and welcome new ideas, technologies and solutions.
We find many of our suppliers through trade exhibitions worldwide. Actually, we believe that tradeshows are the best place to interact with potential suppliers, as everyone has the right frame of mind. You get a large pool of information when you talk to people face-to-face. You also improve your relationships with existing suppliers when you meet up with them. We always have one person from Procurement and one from Engineering or Production traveling together.
Our suppliers’ location
One of our key parameter for supplier selection is the country of origin. Our suppliers are mainly from Europe and USA. They have their factories in those respective countries, but some items come from their Japanese production.
We assess all suppliers before we take them on board. We look into aspects such as finance, production capacity and facilities, human resources, quality, performance, environmental and ethical considerations and information technology. Compliance to quality, health & safety and environment management is extremely important for us. The appraisal process is performed using various questionnaires, reference check, product testing, compliance checks, field visit, reference check, study of past historical performance as well as third party assessments.