In essence, what you want from an automotive adhesives supplier is simple: consistent sourcing of a quality product at a fair price. In practice, however, you may be uncertain whether you’re getting the best of all three worlds from a given supplier—especially if you haven’t officially begun working with them.
Reliable quality is not the only factor that affects the price of your adhesives, either. When you’re setting a budget for automotive adhesive films, for example, the same reputable supplier can often offer materials that meet spec at multiple price points. This means you have to consider the thickness of the automotive tape or film, the total necessary strength of the adhesive layer, and the compatible material options in the supplier’s portfolio.
Clear budget goals are undoubtedly helpful to suppliers as they tailor their selection to your needs. Even so, there’s far more to finding the best automobile adhesives at minimum cost than merely naming a spec and price point. Here are a few strategies to help you vet adhesive suppliers for excellence while also achieving savings on your deliverables.
Table of Contents:
What to Look For in a Supplier
6 Ways to Buy the Best Automotive Adhesives
- Visit the Production Floor
- Audit the Factory
- Test a Product Sample
- Prioritize Innovation
- Look For Value-Added Services
- Ask Their Customers
9 Ways to Find the Lowest Price
- Go Big on the Initial Quote
- Show Interest in a Long-Term Relationship
- Encourage Healthy Competition
- Larger Deposit, Larger Discount
- Consolidate Your Sourcing
- Source Locally
- Help the Supplier Diversify
- Target Secondary Costs
- Be a Good Partner
Price Isn’t Everything
A low price can be misleading. Perhaps you’ve found a supplier that insists their automotive adhesives meet spec, and the RFQ has undercut their competition. That’s a great start. But to achieve value, you’ll need to consider the difference between price and cost.
Price vs. Cost:
Achieving the lowest price is only the first contribution to long-term value. The manufacturing process, the collateral benefits of materials, and the overall business practices of the supplier have a significant impact on the lifetime cost of a purchase.
- Price is an upfront expense. Generally, this is a rate of dollars per unit, which is immediately quantifiable and easy to see. However, this “ease” creates a risk of overlooking the total cost of a decision.
- Cost is the real, long-term value in the arrangement. It considers all of the factors that go into the exchange, including variations in capacity, technical reliability, process efficiency, and value-added elements. All of these can add or subtract value over the life of the order, and ultimately change the true budget impact of the purchase.
Partnering with a low-priced supplier often has its own costs. In some cases, you could end up with neither the best automotive adhesives nor the lowest price (once total costs are factored in).
For example, a too-good-to-be-true price could be a sign of sacrifices made in quality or less rigorous standards. Partnering with a company that does whatever it takes to meet that minimum price point may take the pressure off your budget in the short term, but you’re also undertaking several risks, such as:
Added Production Steps: When that shipment of low-priced adhesives comes in and you detect flaws, gaps in meeting spec, or just generally poor quality, you might need to dispose of and restock the order. Production delays and downtime cost time and money.
- Legal Risks: Faults in your automotive adhesives could also lead to regulatory fines, malfunctions, or other legal ramifications.
- Reputation Damage: Clients who notice a drop in quality could take their business to other manufacturers or worse—spread the word and discourage others from doing business with you.
- Lower Revenue: QC rejection, poor press, and legal fees will all damage your bottom line (and potentially your stock prices, if you’re publicly traded).
On the other hand, investing in the right adhesives with reliable quality and efficient manufacturing procedures can save you money beyond what’s immediately apparent in the (potentially higher) upfront price per unit.What to Look For in a Supplier
Competitive quality, price, service, and delivery are the primary criteria in any supplier partnership. A truly “budget-friendly” automotive adhesive supplier has many intangible traits that lead to savings in the long run. For example, your budget reaps the benefits when a supplier partner has:
- A Collaborative Approach
- Commitment to Innovation
- Reputation for Quality
- Efficient Customer Service
These traits are invaluable in a buyer-centric market that has already pushed prices to a minimum. Online bidding directories have empowered purchasers with more transparency in costs and increased access to a sea of sourcing alternatives. The automotive adhesive market is more competitive today than ever, and most suppliers can offer materials at close to the same prices. As a result, service is now a much more significant differentiator.
According to research by Gartner, 36% of companies expected to compete primarily based on their customer experience in 2012. By 2016, that number rose to 89%—and it’s still going up. On the other hand, according to data from Flexis, not even a third of supply chain management professionals see their collaborative processes as “effective.”
The best suppliers, then, have a unique opportunity to set themselves apart with efficient, personalized service and lean production practices. These traits keep the whole relationship more productive. Does the supplier use Kaizen or Six Sigma methodologies to continually improve and advance their performance? Do they operate at a three-sigma level or a full six-sigma? It pays to take the time to look for intangible value.
6 Ways To Buy the Best Automotive Adhesives
Ensure that you’re getting top quality adhesives with the following strategies:
1. Visit the Production Floor
The most surefire way to vet a supplier’s capacity and quality is to see it firsthand. Go to the factory and learn how they handle:
- Waste material
- Quality assurance and quality control
- R&D (especially if you’re going to work with them on new products)
- Maintenance and calibration of equipment
- Licenses or certifications
It’s one thing to hear a supplier say they can fulfill your needs. It’s another to confirm it with visual evidence. A great supplier will be proud to give factory tours to potential business partners.
2. Audit the Factory
If you don’t have the time or expertise to verify processes or conduct a thorough audit yourself, you might consider hiring a third-party auditor to examine the factory on your behalf. The trip could assess based on ISO 9001 (or any preferred standard), and report objective results back to you.
3. Test a Product Sample
While less comprehensive than a site visit, product sample testing is another valuable way to confirm that a supplier’s materials are up to par. It’s also easier (and faster) than a full factory audit. Just make sure you have a clear and methodical testing strategy.
Request a sample of the adhesive or film that you’re interested in, and send it to a lab for testing against your required specifications. This is a critical step of confirming that it can meet your standards before you hit full-scale production. A salesman’s word is not enough.
4. Prioritize Innovation
A hyper-focus on production capabilities can make automotive purchasing too short-sighted. It’s easy to overlook vital qualities like culture and mindset because they’re less quantifiable than price. Nonetheless, any supplier driven by innovation and staying ahead of the curve is a supplier worthy of your confidence.
If your business partner makes a point to regularly improve their processes and machinery, they’re more likely to meet your standards and produce the most cutting edge materials. Sometimes, you may even need the supplier to invent the ideal materials when there isn’t anything perfect for your project already on the market.
Manufacturers in the US perform 64% of all private-sector R&D in the country—more innovation than any other sector. As a result, this has to be a priority if you want to stay viable or find competitive advantages in a continually changing market.
5. Look For Value-Added Services
Suppliers can add value to your automotive adhesives by folding in services like:
- Low-cost inventory storage
- Rapid response on warranty issues
- Streamlined logistics
- Supplier-handled shipping
The more value-added services are featured in the partnership, the more you’ll maximize product value while simultaneously minimizing net price.
6. Ask Their Customers
There’s no better resource for verifying supplier quality than their customer base. Ask for a customer list so that you can reach out and inquire about their experiences with the automotive adhesives you’re interested in purchasing for your project. Previous customers might shed some light on the parameters of their own purchases and how satisfied they were with both the product and the relationship.
9 Ways To Find the Lowest Price
Once you’ve vetted a shortlist of sterling suppliers, the next step is to nail down pricing. Naming a price point can be useful, but it’s a one-step approach. Here are a few more tactics you can use to reach the best possible price for quality automotive adhesives:
1. Go Big on the Initial Quote
Start your initial inquiry by asking about the price for a substantial volume order. When the quote comes back, you’ll be able to ask what it would cost if you make a smaller order instead. This will give you a better idea of how their prices scale, and whether or not they’ll have the ability to compete at a price point that makes sense to you.
2. Show Interest in a Long-Term Relationship
Like any business, automotive adhesive suppliers are hoping to sell as many units as possible to reliable, returning customers. If you’re seen as a client who can give them a lot of business, it may help you secure more favorable terms, greater flexibility, or larger price concessions.
Establish rapport and enthusiasm early in negotiations, and use examples from previous supplier relationships. This will demonstrate what they can expect from you over time if they perform well with the initial purchase schedule. Loyalty is a hot commodity in today’s automotive industry—a sincere demonstration can give you leverage.
3. Encourage Healthy Competition
Competitive pricing comes from competition. It’s healthy for negotiations if you talk to multiple suppliers and let each one know that you’re getting quotes from the others. Make it clear that the most competitive bid will win your business. Be careful to consider quality as you determine which bid is genuinely the most attractive.
4. Larger Deposit, Larger Discount
Offer to pay a large percentage (perhaps half) upfront to boost your bargaining power as you ask about discounts. Automotive film and adhesive suppliers are more likely to work with you on setting a better total price when you help their accounts receivable in the immediate future.
5. Consolidate Your Sourcing
If you’re using multiple vendors for similar products, you can potentially save a lot by transferring as much of the business as possible to one supplier. Talk to the company before the switch to discuss possible discounts in exchange for the lion’s share (or all) of your automotive purchasing orders.
6. Source Locally
Delivery distance is a significant source of coincident costs for automotive adhesives. It’s also a reason to consider switching suppliers. A close-proximity partner is more accessible, can deliver more quickly, and won’t cost as much in freight.
7. Help the Supplier Diversify
Automotive film suppliers value chances to grow their business into new markets or industries. If working with you opens doors to new opportunities, it may be worth smaller margins on the purchase order in exchange for the long-term gains of diversifying their offerings.
8. Target Secondary Costs
Price per unit is not the only way to reduce your total costs. If the supplier isn’t interested in lowering the price, see what other areas you can find a mutual gain in the agreement. It might be possible to negotiate on the length or scope of the warranty, which side will store the inventory, or who handles shipping costs. Any added value in the agreement reduces the total effective cost per unit.
9. Be a Good Partner
Healthy relationships are built on mutual goodwill. It’s crucial to find a responsive and collaborative partner. But doing so won’t do any good unless you’re interested in collaboration, sharing technology, or offering support beyond the stipulations in the contract.
Let’s look at Tesla. Tesla is a powerful brand, but it can’t seem to stop amassing poor press—which can dissuade suppliers from making concessions. As another example, consider the worsening relations between GM, Ford, FCA, and US suppliers. These worsening relations cost the OEMs a collective $1.8 billion in operating profits in 2014.
If you want to avoid these kinds of pitfalls, then you have to collaborate with your partner. Collaboration is especially necessary to mitigate the impact of tariffs or other current industry challenges.
Focus on being the sort of client your suppliers will want to work with, and you’ll likely receive preferential treatment over the accounts with less productive relationships. Timely payment, open communications, and a partnership mentality will benefit both you and the supplier in the long term.