The Manufacturing Executive
The Manufacturing Executive

Episode · 11 months ago

Mitigating Risk Through Smart Procurement w/ Aaron Brimer


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

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Procurement, my field, you know- wereone part of that were strategic partner to the engineers into the plant. Itshouldn't be. You know, I'm not on an island theyre on an island and somebodyelse's and then we're not even talking the same language. Welcome to the manufacturing executivepodcast, where we explore the strategies and experiences that aredriving midsize manufacturers. FORARD here you'll discover new insihts frompassionate manufacturing leaders who have compelling stories to share abouttheir successes and struggles and you'll learn from btob sales andmarketing experts about how to apply actionable business developmentstrategies inside your business. Let's get into the show, welcome to another episode of theManufacturing Executive podcast. This show is being brought to you by oursponsor cadinus part solutions: I'm Jo Sullivan Your Houst and a cofounder ofthe Industrial Marketing Agency Gerilla, seventy six, so anyone who's listenedto this show before knows that I'm a marketing and sales guy and I colead anagency that helps manufacturers do those things more effectively. Sonaturally, a number of our episodes on the podcast have had kind of amarketing or sales spin to them, but today we're going to talk to somebodyon the other side of the coin and that's procurement. Aaron Brimer is asupply chain, leader, with an extensive background and contracting negotiation.Logistics purchasing and inventory management Aaron handles internationaland domestic sourcing, along with delivering cost savings across a widecategory of products. Aaron is also the recent founder and host of theManufacturing Procurement Guy Podcast, where he highlights manufacturingleaders, so they can discuss their successes in the marketplace. His mostimportant job is being a proud husband of thirteen years and a father of twobeautiful girls Aaron. Welcome to the show Joe thanks for having me. We Lyappreciate the time and honor to be on your show. Yeah. You Bet, and it's beenexciting watching you get your show off the ground in recent months I wrote alinked in post, not too long ago, as you know, and even highlighted in ournewsletter, to juse four thousand some manufacturing people that your story,because it was inspirational. You know you you reached out to me a while backabout you, know, sort of how to build build a brand at a personal level, and-and I talked about this idea of launching a podcast and then all of asudden like a week later, he's got a podcast it, as is awesome the way youjust jumped on it and you sa I'm doing it and you dove right in so love theInitiative Yeah Y. AH- and I appreciate your feedback to Joe it's and you'reright, you and I had a conversation, and you gave me great advice andfeedback and you know have known you for a while and respected you andFranco, and you know personally an professionally and just just you guysdo a great job and appreciate everything. You've done awesome. Well,I appreciate that comment so well Aaron. We have talked a lot onthis show about sales and marketing over the first twenty five episodes, orso, but every one of my clients and and the listeners to this show to asmanufacturing folks, some ware somewhere during the sales processthey're going to run into their customers version of you as a procarmicguy or buyer, and so I love bringing your perspective to the table here assomebody in procurement, and I I think getting right into it here. I A topicthat I know is particularly relevant right now. Is We finally get ready toput this ugly year of two thousand and twenty in the Rear View Mirror? For youknow, if F, anybody listening into the future here, we're recording this inkind of early mid December of two thousand and twenty, but the you knowparticularly relevant topic right now is risk mitigation in the supply chainor having second sources when disruption occurs, whether it's somekind of crazy disruption like we've, experienced something like We'e, neverseen before it with Covid, but you know...

...also other forms of supply chain,destruption that everybody experiences along the way and is going to continueexperience somewhere along the way. So can you kind of speak to this topic alittle bit sure absolutely yeah? I think one thing to point out early onis that it's not even if, when a disruption is going to happen, is goingto be when it happens and they think one thing that being in the field nowfor about a decade. Just like you said earlier, Jo, is second sourcing that tthat's been a big focus in my career is making for sure that we have qualifiedsecond sources for our primary products, so, whether it's a raw material orwhether it's a production supplies or whatever that looks like in your field,making for sure that Youyou're not only looking at what you're buying but whoyou're buying from and then also making for sure again that you've got qualitysecond sources in place because disruptions will happen. You knowwhether it's a vendor that you work with that. Maybe their company goes onstrike, which I've seen and- and it puts me as the buyer as the procurementperson in a bind. If I don't have somebody qualified that, I can reachout to and say hey, you know, we'd like to kind of move forward with you guysand see if there's an opportunity to buy percure items from you. So secondsource is a really big thing. I think also on the risk mitigation isinmentory management. Inventory management is making for sure that assome people and if we don't say you've got a buffer of inventory, you've gotan inventory level of items that if, if, if Le Ost say you'R A vender suppliercannot shift for eight weeks or let' just say that there's issues at theport. How do you handle those things? So I've always said I'd always have alittle bit more than not enough. So that's the way. I've always kind oftried to bridge that gap, because Yain I'll continue to say, but it's not ifit happens, it's when it happens and making for sure that your total supplychain is set up to face these types of issues, similar to what we've beenseeing in this very difficult year. Yeah great points there: How aboutnegotiation Aaron, I know this is something when Youdni chatted a fewweeks ago to kind of think about what what would be helpful on this episode.That's t a topic you brought up, you know, what's what is someone like youin a buyer's role? Looking at when say, there are three bids on the table andhow often is it about more than just price? Yeah S. that's a great question.I mean I'll say this. I love negotiation. I love the art of it. Imean I love ther, so much art and science. I've had the opportunity to goto the BOOT school of business and other programs where 've learned fromsome of the best and brightest in the field. You know how to negotiate, howto do it. But to that question Joe of you know, looking at tree bitch. Thefirst thing you know, wher you got to make for sure is that these apples,apples and bits- and you know whether it's a bid for you- know a piece ofiron or whether it's a bed for a very intricate, a design wher to make forsure 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 detaildthings like drawings and specific items, and things like that. Somebody coulddid this and I could look at it as a procurar person, not pretty enough toall the details behind it and say: Well: Man Theyre Twenty Five Percent Lust.Why wouldn't we go with them? I talkd with an engineer, or I talked withsomebody from operations who knows the application who's, the sandme that sayswell, it's because they did't include this in their bid. So I think, lookingat that making for sure it's apples, apples and then also other things arereally big. I think working capital is another big thing and pay terms. Youknow. Pay terms is a very, very big component of a lot of bids. Now, in alot of, companies are looking to obviously push payments out, and so youknow if somebody comes at me with neck dhirty terms and the price is tenosand,and then somebody comes Ti me with net twenty or a hundred and twenty I meanand in their pricis ten percent more you know, weve got calculators that 'llkind of take those assumptions into effect and say: What's the best thingfor your business right now is is a a... wherk casiis king and you needthat or business where you don't have much debt so that you, the pay terms,really isn't a big thing. You want to get the lowest price, so there's a lotof factors that goingto a negotiation first again making for sure that you'relooking at the same thing. Second look at all points of the actual bid, so youwant to make for sure that the rfprftis tailored and very specific. So whenit's Senot, everybody is looking at the same thing and t they come back withexactly what you're requesting as the bi or a procurement person. We're going to take a really quickbreak here. To help pay the bills, so two thousand and twenty has been aweird year. Industries are facing new challenges as we navigate life withouttrade shows events and INPERSON meetings. Many businesses arebulstering their online tools to offer a better experience. EALSO making upfor some of those missing trade show leads and that's where cadinus partsolutions comes in. They help you create a dynamic, Sharabl, cadcatalogue that you put on your website. Designers can preview your productsfrom any angle and download and the format that they prefer by improvingthe online experience. Engineers and architects get the data they need fortheir design and you get a fresh lead in your marketing pipeline who needstrade shows anyway to learn more visit. Part Solutionscom leads, and you had some really great nuggetsin there. You know the terms point I think is really great, becausesometimes it might be kind of an apple's apples, comparison and- andeven the price might be similar, but you know if cash flow is, is superimportant right now, that's probably a lever that can be pulled, Huh yeah.Absolutely it really is. I mean it's and again working with Varo size ofcompanies and companies that look at things differently. As far as you know,cash flow- and you know cash cycles and- and you know, there's obviouslydifferent ways of being paid, whether you know there's there's purchasingcards, there's things called V cards ors. Obviously, your stanard check, butthere's a lot of ways you can do that, but pay terms is really one thing thatI feel like these last kind of five to seven years is became such a big topicin negotiation. As far as you know, what are the terms going to be? Whatare the terms going to be, and quite frankly, it's one of the firstquestions I'll ask as a procurement person is that you know yeah. I want toknow your price, I want to know you know what does that look like what'syour service? What's, my expectations was my team's expectations, but alsowhat your pay terms and that's that's, a really big part of it yeah greatinsight, something else you hit on there. That comes up a lot in my conversations withyou know, specially sales teams that we garilla seventy six. Our Agency servesmidsize manufacturers, doing marketing and some sales consulting to and we'realways getting into conversations about who the ideal buyer is not only at acompany level, but who the buying process influencers are inside of acompany, and it's often there's engineers might be plant managersoperations folks see sweet at some point. Procurement is always there, butwhat'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 roleearlier in the buying process, which tends to be technical people orengineers, and often by the time. The conversation with procurement happens,those people, those technical people, have already had their hands on it andtheir eyes on it, and they are an advocate for the solution toprocarement N. ultimately, it's got Ta run through them, but I'm curious, yeah.You know from your perspective, what role do engineers tend to play in abuying decision? When, when do you also have to go, pull their expertise tohelp? You make a decision,...

...yeah great question, a lot there. Iwould say that one thing I always push for Joe is to make for sure that I'maware of these conversations early on because you're exactly right, I've seenit where I kind of get pulled in at the very end and they've already had youknow, say multiple conversations with one company and they got two other bids,but really they met with one company seven times and already had a layoutand already talkd 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 does't work really well from a negotiation standpoint. So I try and tell my folkwhether 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 badguy. But the guy that kind of has to go back and say: Hey, you know, here's theexpectations, let me kind of lay it out. Let me kind of be that intermediarybetween you and the company. Now another point you made Joe was thatthere is definitely certain things that I'm not the s me on. If there's, ifthere's drawing scematics hat there ar things like that, you know that there'slayout of the plant or lay out of a design or a gearbox or some sort ofmotor that has very intricate a designof behind it. Certainly I got toget my people involved on that early, but I never like to work in a silo. Ialways want to make for sure that I'm working with all the players in it, soyou know because at the end of the day you know these are decisions,especially for major buys. There should be numerous parties involved in thatfrom an organization procurement. My field, you know, were one part of thatwere strategic partner to the engineers into the plant. It shouldn't be. Youknow, I'm not on an island theyre on an island and somebody else's and thenwe're not even talking the same language. So you know to kind of sumthat up. I want to make for sure that I'm in these conversations in that thein user is in these conversations rearly on and that we're making thesedecisions and having these conversations because it can even cometo contracting to so. If it's a situation where you know we got to havesome a contract o behind it, some sort of an agreement, you know some sort ofterms and conditions of behind it. You know I'm going to be heavily involvedin that, so I want to make for sure that I'm in these conversations andthat I'm representing the company and making for sure we're not only doingwhat's best but that you know we're getting the right solution for theinuser yeah great perspective there. You know as a follow up there aarin I'mcurious when, when you know the technical professionals engineers, theones who are the SMEs go too far down a path with one particular solutionprovider and you get looped in too late, you n, what kind of happens is just? DoThings get derailed? They wind up having a backtrack and go talk to othercompanies, then to get competitive bids. I realize it's going to be differentfrom one scenaro to the next, but just kind of curious. What kind of problemsthat onds up presenting it can present a lot of problems I mean, especially ifwe're talking about a large scale, project or a large scale. By I meanagain, I can't state it enough how it's important that the procurment person,you know your procurment agent, whoever that person is your procurementdirector, 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 thevaryin or even a worse. These decisions have been made and we've engaged withthese companies and contracts have been signed without me being a part of itand then there's ramifications of you know I like to put deadlines on Wone emachine is supposed to be here and, if they're not then there're certain paycauses ar rebate clauses that the vendor have to adhere to. So you know alot of times that if we have specific dates, let just say that a plan has ascheduled shutdown or you have a date where this you know, a piece ofequipment has to be here for installation for it to start running onx date. Well, if you've kind of work in...

...a vender- and they tell you- you know ahandshake and a thumbs up, you know we're good to go and then all of asudden that it doesn't show up on that date. That's when I get pulled inthey're like you got to reach aut to the vendor, find out. What's going on,I'm like what vendar are you talking about, you know, so I think it isreally important that you know I like to be in these conversations early on,not as though I'm acting as the estime, but just so I'm kind of onboard to kindof set those expectations with my colleagues and then also with the folkswho were buying the piece of equipment or service from Yep great points Eron. You- and I were recently talkingabout the difference between vendors that are proactive versus vendors, thatare more reactive and I'm curious from your perspective. Is there a time inplace for both types, and when do you prefer one style over the other yeah?You Know Joe, I would say that I'm going to typically prefer my proactivevendors and it's the vendors that if they see that there's a by product thatwe buy, that we buy and there's a by product of a part that they make or rawmaterial earning greedient. That they're telling me hey we're hearingthat this thing may cause a price increased own the road or we're hearingthat the manufacture of this part is having some issues or they have amachine down. So we may need a 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 offront, so I would say, as a whole getting that type of information asearly as soon as possible means a lot for me as a procurement person, becausethat means I can at least start to do some backup work initially to make forsure that my team and my folks are ready. If something would happen downthe line that this is tender kind of, let me know about yeah, that's goodstuff, so for anybody listening who is a supplier to somebody else, you knowbe an educator right, be be. Ah a you know, voice in your industry, make sureyou know what's going on and and share that information yeah,absolutely Joe. I think it yeah. That's that's put excellent. I mean it reallyis. I think it's just if you know something that could impact someone, Iyour customer. Let them know that up front, especially for the vendors thatyou know and your customers that you have a good report relationship with. Imean that's, that's big and that's what, when I think of a proactive vinner, Ithink of you know a relational vendor, not just a transactioal vendor. I thinka transaction. I think of somebody, that's just reactive, just reacting tothe industry, hey sorry. We can't ship this when whet. We sentd a purchaseorder two weeks ago and now you're just telling me this, and we expected to behere in two days like stuff like that, can be very frustrated and not just tome, but a lot of times. The preparement person is the one that is going to haveto convey that information to the pliht manager or too so many operations orengineering, so it just kind of again making for sure that your relationshipis good and that you have really good streammind communication, for you knowcurrent issues or anything that could impact them down the road. Anothertopic that I wanted to hit on was this idea of when it's time to part wayswith a vendor. How do you do it in a way? That's, you know, doesn't burnbridges, that's respectful! You know it could be probably an uncomfortable,even awkward situation. Sometimes I suppose, but something that probably ispart of your world right. It is, it is, and you know I've been doing this for awhile now and- and you know, having those conversations still most of thetime- they're not they're, not easy, but I'm goingna revert back tosomething my grandfather who's. Eighty eight years old, he served in theKorean War. Somebody that I love and respect has told me since I was tenyears old, he said Aaran do a job, largeor, small duit right or not at all,and I love that and I live by that and so to answer your question. I love tohave these conversations face to face now. I realized in two thousand andtwenty Joes you as you let into that.

It's it's been a a difficulty, yourchallenge and Yeur, quite frankly, a pretty horrible year for a lot ofpeople and whatnot and for their families and everything, and but Ialways want to have those conversations face to face, and I think it's theprofessional thing to do. I think it's the right thing to do, and especiallyif there was a contengious bid or there was something going on where maybe therelationship come a sourd or maybe expectations were not met. I think it'scritical to have those conversations face to face. I want to be sittingacross 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 mypreference! That's the way I like to handle things and that's the way I'vehandles handle things in the past yeah. Maybe you and I are old school, but amin the same boat. I think humaneyes yourself, you know it's just bringskind of a level of respect, and you never know when things might come backaround. I've been on the receiving end of that, where you know somebody partedways with with me and my agency and Jeez I mean literally. I had a callthis week with somebody who we did business with a few years back and we parted ways on good terms and andnow the times right again and we're kind of back in the conversation withthem and t you know could have, could have gone in another directiondepending on either how they or we had handled the situation. So I think justkeeping those relationships strong where you kind is important, absolutelyjoe. I couldn't agree more and it's just you know what we heard years agoto you know: Don't burn bridges and because you're exactly right, you neverknow when somebody Wen a vendor could come back and your life and reallypotentially help you out or be a Catialist O. maybe maybe the companiesmade changes, and you know three years down the road you guys are looking atsome different types of automation and now that company is, you know, is apartner that you can t work with. So I've seen that too and you're exactlyright 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 thetime every day and whatnot, and it's just you know, I'm with you on thewhole old school thing, because it just you know I want. I want my vendors toset time splots if we're going to meet. I want my vendors to you know to makefor sure they're telling me about this stuff and with that that's just hot aone way street. I want to tell them the same thing. If our business is makingchanges that the climate is changing and evolving in you know, there looksto be some sort of. You know change, that's going to happen! Something likethat. I want to make for sure that I'm communicating with them as well. Sojust having good communication, I think, is really the best practice for surewlar and I've kind of covered. My questions here for you, today's oranything you'd like to add that I didn't ask you about or a way you'dlike to wrap this up. You know first got me. Thank you gin, Joe for havingmeon it's. I can't say it again: I've known Joe and his business partner,John Franko, for number of years- and just you know you guys are you guys,are top knotch, and I mean that just just great guys and just doing theright thing and and just I couldn't recommend a company to work for morethan grilla. Seventy six so appreciates you and appreciate what you're doingthe joke. So as far as kind of something to in with, as any othertopic, I would just say that two thousand and twenty has been achallengineer, and I would just tell the folks who are listening to this beresilient and things will come back but make for sure you've got proper thingsin 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 kindwords I do not pay errand to say those things, but probably sh probably shouldut great great conversation toh here andyou brought a a ton of great insights here, and I think that our listenersare going to get a lot of value out of this. So appreciate you taking the timeout of your day to do this absolutely HEU bad jokes, but by pleasure, well tlest questionaire, and where can people get in touch with you and also I wantto plug your new podcast ou, just a few episodes in but you're going down agreat path with the manufacturing procurement guy. So can you speak tothose two things here can find you yeah?...

Absolutely, I think the best way tofind me is just unlinked in seems like Laik, in as a best business networkingside out there and just just for information and networking and justjust an opportunity to learn and grow. So that would be the best way to findme on Lakedin, and you could shoot me. The email are my phone numbers on thereas well and yeah. I just started tostart of the manufactured procurementGuy Podcast, three episodes in thanks to the supportof Joe and some others.Who've really been a catalyst for that. So there's a podcast manufactureprocuring guys, so I'm trying to do at least one or two a month. That's mygoal! Right now and- and you know we'll see where we go from aor, but reallyexcited about it and really you know, would love to help if you have anyquestions. So thank you. Great awesome well go check that out arons off to agreat start. So I would like to say thank you once again to our sponsorcadinus part solutions for helping make this episode possible and Erer thanksfor taking the time to join. Thank you, Joe, but my pleasure. As for the restof you, I hope to catch you on the next episode of the Manufacturing Executive. You've been listening to themanufacturing executive podcast to ensure that you never missed an episodesubscribe to the show in your favorite podcast player. If you'd like to learnmore about industrial marketing and sale strategy, you'll find an everexpanding collection of articles. Videos guides and tools specificallyfor B, to B manufacturers at grilla seventy sixcom flash learn. Thank youso much for listening until next time.

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