We Didn't Buy Any Of That Stuff Up There

However, that is us on site at a tubing and piping supplier during our search for a cost effective source for the tubing we needed for the CNC shop we trusted.

Let's start back at the beginning, though.

Building A Tubing RFQ From Scratch

In this case, our US team had wandered one of the client's warehouses picking parts together after going through data, and these tubes were on the list. In a sense, it was the ideal project, because we had:

• Physical Samples
• Drawings
• Metal Specs
• Weights
• Target Costs
• EAU / Volume Targets

However, as with many projects, you run into the case where the product has been made the same way by the same people for so long, and the drawings and specs are so old, that you can't rely on what's on paper to know what's actually being made, so we had to treat it a bit like an engineering project as well.

One key thing to note, our client understood the need to give us as much data as we needed to do the job right the first time, not withholding targets or weights or materials as part of a piecemeal trust exercise.

Sourcing OpSec: An Important Step

Just like any company in our position, we have companies which we trust and work with very closely, then we have companies who we trust and work with, but we are also constantly qualifying new sources, building trust and verifying that trust.

In any case, no matter who you're dealing with, the first rule of operational security with information is that anything you communicate can be deemed insecure and could possibly leak, so we did what we always do. We sanitized things, created a Rosetta stone of internal and external product names, stripped application info and so on.

Test And Verify: OES, Hardness, Dimensions & More

Anytime you're moving metal production from the US to Asia, including Thailand, you really need to know what you're starting with, because you're often going to need to accept JIS, DIN or other substitutes. The further you get from raw material, the more true this is, and tubing is at least a couple of steps removed.

We quite often perform OES, whether asked to or not, for exactly these reasons, as we did in this case.

Based on the results we were able to verify metals on the current parts correctly, which set us up well for the likely challenge of finding an acceptable, available, substitute in the crazy metals market of 2021 and 2022.

Let The Bidding Begin

Once we got into bidding, we quickly realized that the larger shops were building in a lot of overhead for what is essentially a simple project. At MOTOA Group we don't just forward emails around and trade deals, we pick apart every client's package and look at it from all angles.

Our American-led team has worked inside, at the very top of family owned factories in Asia, so we're familiar with how manufacturing finances factor into cost calculations and we know how pricing decisions are made. Like we always say, you have to live there, know the culture and know how to do business locally, otherwise you're leaving something on the table.

Once the bids came back, they were competitive, but ehhhh...

Reviewing Bids & Looking For Competitive Advantage

In this case, we figured out pretty quickly that the direct material and direct labor components should be pretty static between sources with similar levels of automation, so everything else was just paying for the kids to have a Mercedes, so we decided to evaluate the biggest cost (material) independently and look for a source that would allow us to deduce the labor cost independently.

We pretty quickly found that the competitive advantage in this case was going to be creating a supply chain for our client, managing it from end to end, and working with the local machine shop as the key partner between the metal supplier, the heat treatment provider and, finally, us doing testing and overseeing fulfillment of the first container, second container and so on.

And by dong exactly that - in the middle of the 2021 and 2022 metal markets going nuts, the shipping crisis and more - we were able to exceed the cost cutting expectations of our American client. Of course that meant we now had to go from planning to execution.

Making The Sausage

Once we had all the pieces in place - even down to collecting the mill certificates, independently testing the supply with one of our partner labs and so on - it was time to get things moving for our client, who needed this supply.

You may be thinking, "It's just machined tubing, it really doesn't take that much work." but that would be a misunderstanding of process management, especially in overseas sourcing.

To start, we flowcharted out the entire process from end to end in our online project management system, making sure everyone was on board. Managing quality means making sure everyone's informed and in lockstep on the overall process from the get-go, but not everyone in every country is interested in reading, or filling out endless amounts of AS9100 or Six Sigma paperwork. Many great sources aren't even ISO (let alone 16949) certified, much like in the US.

So, we make the QCE process as visual and straightforward as possible using our systems:
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Didn't want to bore you with the entire process, but you get the idea. We can quickly translate this into local languages, and it's also part of a system that allows us to repurpose the same tasks and structure for Gantt Charts as well as ongoing process management. Easy peasy.

With that done, we proceeded to carrying out the steps and the rest is history.

Sourcing (And Thinking) Outside The China Box

We could go on here, but you get the point and most of the rest of the story involves our teams creating quality gauges & jigs, managing the quality plan, pulling samples for independent testing and evaluation, working with the machine shop on volume and loading calculations, etc.

As we often preach, many of the best sources, and the most cost effective, are companies you would never encounter online or on a trade show because they're too small and don't advertise in (or often speak) English.

However, even if you did find them and manage to communicate, you might scare them off quickly by not managing the emotional part of the sourcing process first - then what happens when you find out that your source has never shipped a container before? Would you pull out of the job? We wouldn't, and haven't. We just solve the problems - and, like Mark Watney says, if you solve enough problems you get to go home.

The majority of US companies we encounter source entirely, or almost entirely from China, or a mix of China and Taiwan, two countries that have spent decades attuning their supply chains to the US market. As soon as you step into other parts of the world, you discover that different supply chains are more highly attuned to the EU or Japan or, obviously, domestic markets.

One effect of this is that US metal types, grades, even sizes are not as widely available in other places as they are in China, but it doesn't stop there. Coating suppliers, fastener and child part suppliers, you name it.

So when companies approach other manufacturers in other countries asking for China terms and looking for China pricing and China attitudes they fail, and often they give up.

Some good news is that in manufacturing economies the size of Thailand there are almost always substitutes, and Thailand is a huge supplier of automobile parts (and automobiles) along with many other things.

Why do we reserve a section for this? Because, frankly, there's only one China and China is absolutely amazing in its scale and capability, but if you're going to source outside China then you're going to have to dial your expectations back in some ways to the China of 20 years ago and not the China of today.

If you begin the process expecting everything to be exactly like China, but not in China, you will waste your time and ours. Everything from materials to terms can vary quite a bit. Of course we do our best to bridge all these divides and make deals happen, successfully for all parties, but the less time we spend discussing how it works in China, and the more open you are to evaluating alternatives on their own merits, the faster we can get to a yes, or a no.

Let Us Help You Source In Thailand & Elsewhere

If you need serious, on the ground sourcing assistance with machined tubing or piping in Thailand, or elsewhere, email us at info@motoa.group or call +1-832-919-6774 and let's talk. Our US-led teams in the US and Asia work around the clock, so anytime is fine - just ask our clients, we're always there when they call, email, chat or send a carrier pigeon.