The Manufacturing Executive
The Manufacturing Executive

Episode · 1 year ago

Mitigating Risk Through Smart Procurement w/ Aaron Brimer

ABOUT THIS EPISODE

Somewhere along the way, we all run into that guy...

The customer's procurement guy...

The buyer.

And with supply chain disruption fresh in all our minds, it's time we talked to that guy.

In this episode of the podcast, I spoke with Aaron Brimer, a supply chain leader and founder of the Manufacturing Procurement Guy podcast. We talked about mitigating risk through smart procurement practices.

Aaron and I discussed:

  1. Second sourcing
  2. Inventory management
  3. Negotiation
  4. ...And the role engineers play in the buying decision


To ensure that you never miss an episode of The Manufacturing Show, subscribe on Apple Podcasts, or Spotify, or here.

Procurement, my field. You know, we're one part of it. We're strategic partner to the engineers and the plant. It shouldn't be. You know, I'm not on an island. They're on an island and somebody else's, and then we're not even talking the same language. Welcome to the manufacturing executive podcast, where we explore the strategies and experiences that are driving mid size manufacturers forward. Here you'll discover new insights from passionate manufacturing leaders who have compelling stories to share about their successes and struggles, and you'll learn from B tob sales and marketing experts about how to apply actionable business development strategies inside your business. Let's get into the show. Welcome to another episode of the Manufacturing Executive podcast. This show is being brought to you by our sponsor, codinus part solutions. I'm Joe Sullivan, your host and a cofounder of the Industrial Marketing Agency guerrilla seventy six. So anyone who's listened to this show before knows that I'm a marketing and sales guy and I co lead an agency that helps manufacturers do those things more effectively. So, naturally, a number of our episodes on the podcast have had kind of a marketing or sales spin to them, but today we're going to talk to somebody on the other side of the coin, and that's procurement. Aaron Brimer is a supply chain leader with an extensive background and contracting, negotiation, logistics, purchasing and inventory management. Aaron Handel's international and domestic sourcing, along with delivering cost savings across a wide category of products. Aaron is also the recent founder and host of the Manufacturing Procurement Guy Podcast, where you highlights manufacturing leaders so they can discuss their successes in the market place. His most important job is being a proud husband of thirteen years and a father of two beautiful girls. Aaron, welcome to the show, Joe. Thanks for having me. Really appreciate the time and honor to be on your show. Yeah, you bet, and it's been exciting watching you get your show off the ground in recent months. I wrote a linkedin post not too long ago, as you know, and even highlighted in our newsletter to choose four thousand some manufacturing people, that your story because I it was inspirational. I you know you reached out to me a while back about you know sort of how to build the build a brand at a personal level and and I talked about this idea of launching a podcast and and then all of a sudden, like a week later, you've got a podcast. It was is awesome, though. You just jumped on it and you said I'm doing it and you do right in. So love the initiative. Yeah, yeah, and I appreciate your feedback to Joe. It's and you're right. You and I had a conversation and he gave me great advice and feedback and you know, have known you for a while and respected you and Franco and you know, personally and professionally and just just you guys do a great job and I appreciate everything you've done. Awesome will I appreciate that comments so well. Aaron, we have talked a lot on this show about sales and marketing over the first twenty five episodes or so. But every one of my clients and and the listeners to this show to is manufacturing folks. Somewhere, somewhere during the sales process they're going to run into their customers version of you as a procurement guy or buyer, and so I love bringing your perspective to the table here as somebody in procurement and I think getting right into it here, I topic that I know is particularly relevant right now as we finally get ready to put this ugly year of two thousand and twenty in the rearview mirror. For you, if anybody listening into the future here, we're recording this in kind of early mid December of two thousand and twenty. But the you know, particularly relevant topic right now is risk mitigation in the supply chain or having second sources when disruption occurs, whether it's some kind of crazy disruption like we've experienced, something like we've never seen before it with covid but you know, also other...

...forms of supply chain disruption that everybody experiences along the way and is going to continue to experience somewhere along the way. So can you kind of speak to this topic a little bit? Sure. Absolutely. I think one thing to point out early on is that it's not even if in a disruption is going to happen, it's going to be when it happens. And I think one thing that, being in the field now for about a decade, just like you said earlier, Joe's second sourcing that. That's that's been a big focus in my career is making for sure that we have qualified second sources for our primary products. So, whether it's a raw material or whether it's a production supplies or whatever that looks like in your field, making for sure that you're not only looking at what you're buying but who you're buying from, and then also making for sure again that you've got quality second sources in place, because disruptions will happen. You know, whether it's a vendor that you work with that maybe their company goes on strike, which I've seen, and and it puts me, as the Buuy or as the procurement person, in a bind if I don't have somebody qualified that I can reach out to and say, Hey, you know, we'd like to kind of move forward with you guys and see if there's an opportunity to buy procure items from you. So second source is a really big thing, I think. Also on the risk mitigation is inventory management. Inventory management is making for sure that, as some people in the field say, you've got a buffer of inventory, you've got an inventory level of items that if, if, lets just say, your vendor supplier cannot ship for eight weeks or let's just say that there's issues at the port. How do you handle those things? So I've always said I'd always have a little bit more, not enough. So that's the way I've always kind of to bridge that gap. Because, again, I'll continue to say it, but it's not if it happens, it's when it happens and making for sure that your total supply chain is set up to face these types of issues similar to what we've been seeing in this very difficult year. Yeah, great points there. How about negotiation, Aaron, I know this is something when you and I chatted a few weeks ago to kind of think about what would be helpful on this episode. That's the topic you brought up. You know what's what is someone like you in a buyers roll looking at when I say there are three bids on the table? And how often is it about more than just price? Yeah, it's a great question. I mean I'll say this. I love negotiation. I love the art of it. I mean I love there's so much art and science. I've had the opportunity to go to a boost school of business and other programs where I've learned from some of the best and brightest in the field, you know how to negotiate, how to do it. But to that question, Joe, of you know looking at three bits. The first thing, you know, we got to make for sure is that these apples apples bids and you know whether it's it's a it's a bid for, you know, a piece of iron, or whether it's it's a bid for a very intricate a design with to make for sure that WHO's ever bidding on it, that we're looking at the same thing, because that's what I've ran in a lot, especially when we get in detail things like drawings and specific items and things like that. Somebody could bid this and I could look at it as a procure a person not pretty enough to all the details behind it and say well, and they're twenty five percent less, why wouldn't we go with them? I talked with an engineer or I talked with somebody from our operations who knows the application, who's the S and made it. Says, well, it's because they didn't include this in their bids. So I think looking at that, making for sure it's apples apples, and then also other things are really big. I think working capital is another big thing, and pay terms. You know, pay terms is a very, very big component of a lot of bids now and a lot of companies are looking to obviously push payments out. And so you know, if somebody comes at me with net thirty terms and the price is tenzero, and then somebody comes in me with net twenty or a hundred twenty, I mean, and in their prices ten percent more, you know we've got calculators that will kind of take those assumptions into effect and say what's the best thing for Your Business Right now? Is it is a business work cash as king...

...and you need that, or at business where you don't have much debt so that you had to pay terms relays a big thing. You want to get the lowest price. So there's a lot of factors that going to a negotiation. First, again, making for sure that you're looking at the same thing. Second, look at all points of the actual bid. So you want to make for sure that the RFPRFQ is is tailored and very specific so when it's not, everybody is looking at the same thing and that they come back with exactly what you're requesting as the buy or procurement person. We're going to take a really quick break here to help pay the bills. So two thousand and twenty has been a weird year. Industries are facing new challenges as we navigate life without trade shows, events and in person meetings. Many businesses are bolstering their online tools to offer a better experience. Will also making up for some of those missing trade show leads, and that's where cademis part solutions comes in. They help you create a dynamic, sharable cad catalog that you put on your website. Designers can preview your products from any angle and download and the format that they prefer. By improving the online experience, engineers and architects get the data they need for their design and you get a fresh lead in your marketing pipeline. Who Needs Trade shows anyway? To learn more, visit part Solutionscom leads and you had some really great nuggets in there. You know, the terms point, I think is is really great, because sometimes it might be kind of an apples apples comparison and and even the price might be similar. But you know, if cash flow is super important right now, that's probably a lover that can be pulled. Huh, yeah, absolutely, it really is. I mean it's and again working with very size of companies and companies that look at things differently. As far as you know, cash flow and a you know cash cycles and and you know there's obviously different ways of being paid, whether you know there's there's purchasing cards, there's things called V cards, there's obviously your standard check, but there's a lot of ways you can do that. But paid terms is really one thing that I feel like these last kind of FID to set of years is became such a big topic in negotiation. As far as you know, what are the terms going to be? What are the terms going to be? And, quite frankly, it's one of the first questions I'll ask as a procurement person. Is that you know. Yeah, I want to know your price. I want to know. You know. What is that look like? What's your service? What's my expectations, was my team's expectations, but also what your pay terms? And that's that's a really big part of it. Yeah, great insight. Something else you hit on there that comes up a lot in my conversations with you know, especially sales teams that we grilla. Seventy six our agency serves midsize manufacturers doing marketing and and some sales consulting to and we're always getting into conversations about who the ideal buyer is, not only at a company level, but who the buying process influencers are inside of a company and it's often there's engineers might be plant managers, operations folks see suite at some point. Your procurement is always there. But what's interesting is with most of our clients who sell more complex customs, big ticket items, they are focused primarily on the people who play a role earlier in the buying process, which tends to be technical people or engineers. And often by the time the conversation with procurement happens, those people, those technical people, have already had their hands on it and their eyes on it and they are an advocate for the solution to procurement. Ultimately it's got to run through them, but I'm curious. Yeah, you know from your perspective what role do engineers tend to play in a buying decision? When? When do you also have to go pull their expertise to help you make a decision? Yeah, that's great question. A...

...lot there. I would say that one thing I always push forward, Joe, is to make for sure that I'm aware of these conversations early on, because you're exactly right. I've seen it where I kind of get pulled in at the very end and they've already had, you know, say multiple conversations with one company and they've got two other bids. But really they've met with one company seven times and already had a layout and already talked design and all that stuff, and then they come to me and say, Hey, here's the two other bids. Well, it doesn't really that typically doesn't work really well from a negotiation standpoint. So I try and tell my folks, whether it's engineers or whether it's, you know that the plan operations folks, let me be involved early on. And you know, I never want to be called the bad guy, but the guy that kind of has to go back and say, Hey, you know, here's the expectations, let me kind of lay it out, let me kind of be that intermediary between you and the company. Now another point you made, Joe, was that there is definitely certain things that I'm not the same on. If there's if there's drawing schematics, if there's things like that. You know that there's layouts of a plant or layout of a design or a gearbox are some sort of motor that has very intricate a design of behind it. Certainly I got to get my people involved on that early but I never like to work in a silo. I always want to make for sure that I'm working with all the players in it. So you know, because at the end of the day, you know, these are decisions, especially for major buys, there should be numerous parties involved in that. From an Organization for curement my field, you know, we're one part of it. We're strategic partner to the engineers and the plant. It shouldn't be. You know, I'm not on an island, they're on an island and somebody else's and then we're not even talking the same language. So, you know, to kind of some that up, I want to make for sure that I'm in these conversations and that the end user is in these conversations early on and that we're making these decisions and having these conversations, because it can even come to contracting to so if it's a situation where, you know, we got to have some contract behind it, some sort of an agreement, you know, some sort of terms and conditions of behind it, you know, I'm going to be heavily involved in that. So I want to make for sure that I'm in these conversations and that I'm representing the company and making for sure we're not only doing what's best but that, you know, we're getting the right solution for the in user. Yeah, great perspective there, you know. As a follow up there, Aaron, I'm curious when, when you know, the technical professionals, engineers, the ones who are the SIM's, go too far down a path with one particular solution provider and you get looped into late. You know what kind of happens is does do things get derailed? They wind up having a backtrack and go talk to other companies then to get competitive bids? I realize it's going to be different from one scenario to the next, but just kind of curious what kind of problems that one's up presenting. It can present a lot of problems, I mean, especially if we're talking about a large scale project or a large scale buy. I mean again, I can't stated enough how it's important that the procurement person, you know, your procurement agent, whoever that person is, your procurement director, is involved in these conversations because, like you said, and I've seen it more than I would like to admit, where I get pulled in the very inn or even a worse. These decisions have been made and we've engaged with these companies and contracts have been signed without me being a part of it. And then there's ramifications of of you know, I like to put deadlines on when the machine is supposed to be here and if they're not, then there are certain pay clauses, are rebate clauses that the vendor would have to adhere to. So you know a lot of times that if we have specific dates, let's say that a plant has a scheduled shutdown or you have a date where this you know, a piece of equipment has to be here for installation, for it to start running on x...

...date. Well, if you've kind of work in a vendor and they tell you, you know, a handshake and thumbs up, you know we're good to go, and then all of a sudden that it doesn't show up on that date, that's when I get pulled in. They're like, you got to reach out to the vendor find out what's going on. I'm like, what vendor are you talking about you know. So I think it is really important that you know I like to be these conversations early on, not as though on acting as the s and me, but just so I'm kind of on board the kind of set those expectations with my colleagues and then also with the folks who were buying the piece of equipment or service from. Yep, great points. Aaron, you and I were recently talking about the difference between vendors that are proactive versus vendors that are more reactive, and I'm curious from your perspectives, is there a time and place for both types and one do you prefer one style over the other? Yeah, you know, Joe, I would say that I'm going to typically prefer my proactive vendors, and it's the vendors that, if they we see that there's a byproduct that we buy, that we buy and there's a byproduct of a part that they make or are raw material and ingredient, that they're telling me, hey, we're hearing that this thing may cause a price increase down the road, or we're hearing that the manufacture of this part is is having some issues or they have a machine down. So we may need to look at procuring this from somewhere. There's I can't tell you how big that is to me to know that type of information up front. So I would say as a whole, getting that type of information as early, as soon as possible, means a lot for me as a procurement person because that means I can at least start to do some backup work initially to make for sure that my team and my folks are ready if something would happen down the line that this vendor kind of let me know about. Yeah, that's good stuff. So for anybody listening who is a supplier to somebody else, you know, be an educator right be be a you know, a voice in your industry to make sure you know what's going on and and share that information. Yeah, absolutely, Joe. I think. Yeah, that's that's put excellent. I mean it really is. I think it's just if you know something that couldn't pack someone, IE, your customer, let them know that up front, especially for the vendors that you know and your customers that you have a good rapport relationship with. I mean that's that's a big and that's what when I think of a reactive vender, I think of, you know, a relational vendor, not just a transactional vendor. I think a transactional I think of somebody that's just reactive, just reacting to the industry. Hey, sorry, we can't ship this when what? We send a purchase order two weeks ago and now you're just telling me this and we expected to be here in two days. Like stuff like that can be very frustrated, and not just to me but a lot of times to procurement person is to want that is going to have to convey that information to the plant manager or to semi operations or engineer, and so it just kind of again making for sure that your relationship is good and that you have really good streamline communication for, you know, current issues or anything that could and pack them down the road. Another topic that I want to hit on was this idea of when it's time to part ways with the vendor, how do you do it in a way that's you know, it doesn't burn bridges, that's respectful. You know, it could be probably an uncomfortable or even awkward situation sometimes, I suppose, but something that probably is part of your world. Right. It is. It is and you know I've been doing this for a while now and and you know, having those conversations still most of the time they're not they're not easy. But I'M gonna revert back to something my grandfather, who's eighty eight years old, he served in the Korean War, somebody that I love and respect, has told me since I was ten years old. He said Aaron do a job, large or small, do it right or not at all, and and I love that and I live by that. And so to answer your question, and I love to have these conversations facetoface. Now I realize in two thousand and twenty,...

Joe, as you as you let into that, it's it's been a difficulty year, challenge and you're quite frankly, a pretty horrible year for a lot of people and whatnot and for their families and everything. And but I always want to have those conversations facetoface, and I think it's too professional thing to do. I think it's the right thing to do. And especially if there was a contentious bid or there was something going on where maybe the relationship kind of soured or maybe expectations were not met, I think it's critical to have those conversations facetoface I want to be sitting across somebody and tell them this is why we're moving a different direction and this is what we're going to do, as opposed to sit in an email. That's my preference. That's the way I like to handle things and that's the way I've handled handled things in the past. Yeah, and maybe you and I are old school, but I'm in the same boat. I think humanize yourself, you know, it's just brings kind of a level of respect and and you never know when things might come back around. I've been on the receiving end of that where, you know, somebody parted ways with me and my agency, and, Jeez, I mean literally, I had a call this week with somebody who we did business with a few years back and we parted ways on good terms and now the times right again and we're kind of back in the conversation with them and, you know, could have could have gone in another direction depending on either how they or we had handled the situation. So I think just keeping those relationships strong where you can is important. Absolutely, Joe, I couldn't agree more. And it's just, you know, what we heard years ago to you know, don't burn bridges and because you're exactly right. You never know when somebody, when a vendor, could come back and your life and really potentially help you out. are be a catalyst to maybe maybe the companies may changes and you know, three years down the road, you guys are looking at some different types of automation and now that company is, you know, is a partner that you can work with. So I've seen that too, and you're exactly right. And it's just don't burn bridges even that, you know, even with salespeople. I mean a lot of times, you know, I interact with sales people all the time, every day and whatnot, and it's just, you know, I'm with you on the whole old school thing, because it just, you know, I want I want my vendors to set time slots if we're going to meet. I want my vendors to you know, to make for sure they're telling me about this stuff and with that that's just not a one way street. I want to tell them the same thing. If our business is making changes at the climate is is changing and evolving in you know, there looks to be some sort of you know change. It's going to happen something like that. I want to make for sure that I'm communicating with them as well. So just having good communication, I think, is really the best practice for sure. Well, are and I've kind of covered my questions here for you today. Is there anything you'd like to add that I didn't ask you about, or a way you'd like to wrap this up? You know, first let me thank you again, Joe, for having me on. It's I can't say it again. I've known Joe and his business partner, John Franco, for a number of years and just you know, you guys are. You guys are top notch, and I mean that just just great guys and just doing the right thing and and just I couldn't recommend a company to work for more than grilla seventy six. So appreciate you and appreciate what you're doing, Joe. So as far as kind of something to end with, as any other topic, I would just say that two thousand and twenty has been a challenging year and I would just tell the folks who are listening to this be resilient and things will come back. But make for sure you've got proper things in place for risk mitigation, make for sure you're having a good communication and if anybody has any, you know, questions, if I can be of any support, you know I'm more than welcome to do that. Great. Well, I appreciate the kind words. I did not pay Aaron to say those things, but probably should. Probably should a great, great conversation though here and you brought a ton of great insights here and I think that our listeners are going to get a lot of value out of this. So appreciate you taking the time out of your day to do this. Absolutely H Bad Joe. It's been my pleasure. Well, last question. Are and where can people get in touch with you? And also I want to plug your new podcast. You just a few episodes in, but you're going down a great path with the manufacturing procurement guy. So can you speak to those two things? Sure can find...

...you. Yeah, absolutely. I think the best way to find me is just on Linkedin. Seems like Linkedin as a best business networking side out there and just just for information and networking and just just an opportunity to learn and grow. So that that would be the best way to find me on Linkedin and you could shoot me an email or my phone numbers on there as well. And Yeah, I just started to start of the manufacturing procurement guy podcast, three episodes in thanks to the SUPPORTA JOE and some others who've really been a catalyst for that. So there's a podcast manufacturing procurement guys. So I'm trying to do at least one or two a month. That's my goal right now and and you know, we'll see where we go from there, but we're excited about it and really, you know, would love to help if you have any questions. So thank you, great awesome. will go check that out. Arns off to a great start. So I would like to say thank you once again to our sponsor, Condenis, part solutions, for helping make this episode possible and ary, thanks for taking the time to join. Thank you, Joe, but my pleasure. As for the rest of you, I hope to catch you on the next episode of the Manufacturing Executive. You've been listening to the manufacturing executive podcast. To ensure that you never miss an episode, subscribe to the show in your favorite podcast player. If you'd like to learn more about industrial marketing and sales strategy, you'll find an ever expanding collection of articles, videos, guides and tools specifically for BTB manufacturers at Gorilla, seventy sixcom learn thank you so much for listening. UNTIL NEXT TIME.

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