Manufacturers today are focused not only on the quality of the components to be procured but also on the vendors that follow the right quality standards. To know more about the purchase and procurement practices followed by Anchor Electricals, Sneha Ambastha from Electronics Bazaar spoke to Ashutosh Raut, senior GM – sourcing, Anchor by Panasonic.
EB: Are there any plans to invest in capital equipment in the coming year, with regard to electronics manufacturing?
We may invest in the future, based on market demand. However, there are no immediate plans for this.
EB: Do you have any special programmes for ‘Make in India’ suppliers or MSMEs?
We have started manufacturing some of Panasonic’s LED lighting products by using the components of MSMEs or ‘Make in India’ suppliers.
EB: Which are the types of electronic components that you procure?
Usually, the electronic components we procure include diodes, capacitors, transistors, LEDs, coils, printed circuit boards (PCBs), potentiometers, thermistors, varistors, etc.
EB: How important is it for your business to source the correct component from the right vendor?
As a member company of the Panasonic Group, the quality of the procured components is the most important aspect. We focus on vendors that meet our required quality standards, as some of our products have a three-year warranty, as well. Every single component matters. If this is not done, the product’s quality deteriorates, which in turn adds to costs for the company, as the end users get dissatisfied with such products.
“The major challenge is to find the right quality components for products such as LED lights at a competitive price point as the market price and customer requirements are evolving fast”.
EB: What category of electronic materials or services do you procure regularly?
The category of electronic materials that we procure regularly are electronic components, PCBs, printed circuit board assemblies (PCBAs), sub-assemblies, etc.
EB: Do you follow any specific process to let the suppliers know about your company’s requirements?
Yes, of course. We have clear quality target sheets for this purpose. We also share our business plans with our vendors so that they are well aware of our requirements.
EB: Do you have any specific turnover or quality certification requirements for your vendors?
Yes, for Panasonic’s range of products, RoHS compliance requirements are mandatory.
EB: Is there any specific process for vendor enrolment?
We have a detailed new vendor selection process. The steps involved start from identifying new vendors, preparing long- and short-term lists based on requirements, a systems audit, selection, purchase and quality agreements, and the new vendor registration process.
EB: How do you classify and define potential, approved and preferred suppliers?
Potential suppliers are those that have the potential to supply us.
Approved suppliers are those who have already been through the approval process and are ready to supply to us.
Preferred suppliers are those who have been continuously delivering the required quantity to us.
Only approved vendors are maintained in the ERP system. Preferred suppliers are maintained based on their share of business. The database of potential suppliers is maintained separately.
EB: Do you have any vendor development programme?
Yes, we do assist our small vendors in process improvement and by offering quality management systems training.
EB: What are the typical ‘hard-to-find’ categories for which you can say that vendor development is a challenge?
As of now, the major challenge is to find the right quality components for products such as LED lights, at a competitive price point, as the market price and customer requirements are evolving fast.
EB: How do you find a suitable alternative for a failed (end-of-life) component?
We suggest alternatives for end-of-life (EOL) components using market feedback from our key vendors and from product journals.
EB: How do you find a suitable alternative to a component supplier who vanishes from the business due to bankruptcy or business pressures?
We have a well defined vendor/supplier registration process. Such cases are rare as we do a thorough financial analysis before inducting any new vendor.
EB: How does your company deal with low-profit or low-sale product line closures by suppliers, which leads to no customer support being offered by them?
We have an agreement with all our suppliers to supply product spare parts for at least three years, even if a product is off-the-shelf. In such cases, we either stock parts at our end to ensure continuity of service to our end users, or we replace the products with the latest ones in case we are unable to arrange spare parts.
EB: How do you combat the counterfeit or grey market?
The grey market is a cause for concern for every big company. It is a difficult task, but we are vigilant and our dedicated team leaves no stone unturned to ensure that the right quality products in the right quantity are procured. Also, our stringent quality requirements make it difficult for the counterfeit or grey market to replicate our products. The Panasonic guidelines are stringent when it comes to branding every product manufactured by the company.
