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Schwab: Early on, as a smaller player, we worked with smaller suppliers. As we’ve evolved, we’ve tried to exercise more discipline in supplier selection. A lot of the good suppliers have grown with us. Certainly there was a lot of churn. Now we’re getting to the strategic supplier development. That’s been interesting, having that discipline to drive business toward the folks we want to work with, and develop them. Doing that brings wins across the board for everybody.

As an OEM, the more that we work with a supplier, the more clear our expectations become; you get that rapport and chemistry that can help in meeting the quality expectations and lead times, because things become predictable. As we develop strategic relationships and long-term agreements, that helps the contract manufacturers—it’s assurance in business. It allows them to invest in capital equipment or even process development, so that you can make things more efficiently, more economically.

McDermond: I think that you two are further ahead on the supplier development. I have a great passion for it. I’ve been that resource, and I’ve managed the resources in supplier development groups in other industries.

If it’s strategically motivated and a supplier needs help, either through the upfront qualification process to help an audit, or to overcome some deficiencies in quality delivery cost, I go to different sites and ask them to go fix something and come back when it’s done. It’s a tremendous idea, I firmly believe it. But it does bring up the question of how we invest in those resources. The argument is always, well, the suppliers ought to be doing this on their own. At the end of the day, I believe it’s a lot better to try to help out a supplier as opposed to requalify the part with another supplier.

I think it’s a lot easier to work with the supplier and get them to where you both need to be. That’s a partnership. And the OEMs are highly dependent upon the suppliers. It’s not just a hired gun; these are people we truly depend on to help our business.

Hewitt: What do you expect to be the priorities or road blocks for supplier quality development, in coming years?

Grover: It’s cliché, but quality is job one. If you don’t have that, especially for OEMs, you can lose your reputation or have a bad recall. For us, that’s at the forefront of our minds. How do we ensure that the sub-tier suppliers are taking that path, as well?

Schwab: We’re looking for suppliers that want to work with us, that will share our level of enthusiasm for continuous improvement. We’re going to continue to develop new products; we’re also going to continue to develop our internal business processes, and look for suppliers that will want to work with us as we continue to evolve.

McDermond: If I had to pick one word, the word would be proactive. How is a supplier coming to me proactively telling me how they are going to improve quality, how they’re improving delivery and cost, making it a better experience for the end user and the surgeon.
 

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