Capture standard attributes to reduce materials spend

By November of this year, International Truck and Engine Corp., Warrenville, Ill., expects to slash 6 percent to 10 percent from its spending on steel and aluminum sheet, thanks to software from Newview Technologies.

Stampings manufactured from sheet currently are sourced by International from nine stamping companies, which in turn procure sheet from 26 steel and aluminum providers. From November on, says John Fullager, International's purchasing manager for steel, stampings, and structures, International will be negotiating improved purchasing deals that result in a vastly reduced number of material suppliers based upon a reduced number of material specifications and thicknesses.

Newview's technology, explains VP of Strategy Paul Strzelec, has two distinct aims. The first capability, contained within its Material Specification Manager product, assists companies in reducing the number of differing specifications; grades; and alloys, sizes, and thicknesses that it purchases. Typically, he observes, enterprise and design systems don't contain adequate levels of attribute information on material specifications. Often, only the actual drawing holds information on tolerances.

But once captured in the Material Specification Manager, it's possible to see elimination opportunities based on overlapping specifications. Engineers commonly specify materials purely based on engineering considerations, he explains, which leads to a proliferation of very similar, but not quite identical, materials. Take sheet at thicknesses of 15-, 17-, and 19-thousandths of an inch, for example, each with a tolerance of 4-thousandths of an inch. Sheet at 17-thousandths of an inch could serve three purposes—and that's before getting into the minutiae of tempers, grades, and alloys. The trick, says Strzelec, is to make materials decisions in such a way as to avoid adding extra weight to the vehicle or aircraft in question.

Newview's second capability, contained within its Coordinated Network Procurement product, helps companies figure out the best sources from which to purchase the reduced number of materials, involving three or four tiers of suppliers based on criteria such as price-break points and minimum-order quantities. It's this capability that International Truck has licensed, after having undertaken a rough-cut material-reduction exercise of its own, says Strzelec—although a full-blown material-reduction project could follow.

"We looked hard, and the Newview capability seems unique," says Fullager. "We've been loading data into the system since June—sizes, prices, and specifications. We did a preliminary exercise in the fall that achieved a 6-percent reduction, and we think that by using the software we could get savings of as high as 10 percent."