With a focus on vendor development and setting up quality benchmarks to eliminate piracy, Eon is planning to grow and expand in India. In order to understand what the firm requires of its vendors and learn more about the products it plans to launch for its market expansion, Sneha Ambastha spoke to Sanjeev Mittal, general manager-supply chain management, Eon Electric.
EB: Any plans to invest in capital equipment with regards to electronics manufacturing in the coming year?
Capital investment is always something the company does as we are consistently expanding our business. We have already planned for adequate investments in a state-of-art quality lab and in SMT and other machines for our plant.
EB: Do you have any special programmes for ‘Made in India’ suppliers or MSMEs?
We have our own manufacturing set-up for major lighting products. We invariably guide and support our suppliers of materials and components to source materials from indigenous sources to ensure that their supply is of consistent quality and is not restricted or delayed.
EB: Which types of electronic components do you procure?
We normally procure all the types of electronic components required to make electronic drivers for LED lights and mobile battery chargers.
EB: How important is it for your business to source the correct component from the right vendor? What is the business impact of not being able to do so?
A product and its performance is all about sourcing the right components and putting them together. Thus, sourcing the right product and getting the right fit for our kind of products is our utmost focus. We have an in-house quality team which helps us do this job. Approaching the right source with the right quality benchmarks also helps us to reduce the chances of component/product failure, thus leading to the good efficacy of our products. At Eon, zero compromise is something which drives the organisation as well as the individuals, as they go about their tasks.
EB: What are the electronic products that you procure regularly?
Electrolytic capacitors, resistors MOVs, etc, to name a few.
EB: Do you follow any specific process to let suppliers know about your company’s requirements?
We have our own processes and IT enabled systems, which help us share our requirements with our suppliers. These have been laid down and defined based on the end application and the life expectancy, so as to ascertain the quality needs. We also specifically mention the make of the components while conducting tests in our R&D labs.
EB: Do you have any specific turnover or quality certification requirements for your vendors?
As indicated earlier, we are strong supporters of the Make in India initiative and this is our underlying focus, even while we are making sourcing choices, initially based on test certificates from independent labs and our own labs.
EB: Is there any specific process you follow for vendor enrolment?
Yes, we do have a vendor enrolment process. This includes sharing precise technical specifications with our vendors; getting test certificates from recognised labs and performing our own tests on smaller lots from the vendor, before finalising bulk orders to them.
Our procurement and quality control teams regularly meet our vendors to consistently share with them our evaluation of their quality of supplies to ensure that satisfactory performance of components is always achieved.
EB: How do you classify and define potential, approved and preferred suppliers?
While we initially select suppliers whose materials have been used with satisfactory results in the past, yet we are regularly looking at new sources for improved quality and comparative cost advantage. The classification and definition of these suppliers depends on the literal sense of the words – “potential, approved and consistent satisfactory past experience”.
EB: Do you have any vendor development programme? Please elaborate.
As you know, Eon is a five year young organisation. For the last five years, we have focused on establishing and consolidating our presence amongst all our stakeholders, and have successfully achieved this objective with unique records, large volume of production and supply of streetlights, etc. This is the time for our next trajectory of growth and, for this, a vendor development plan will be one of our focus areas; because we believe that growth is inclusive and can only be achieved with the help of all our stakeholders.
EB: What are the typical ‘hard-to-find’ categories for which vendor development is a challenge?
Good quality electrolytic capacitors, for one, are extremely critical for the overall quality of a product.
EB: How do you find a suitable alternative for a failed (end-of-life) component?
Optional makes are selected. Their samples are tested and we choose the best from them, based on their efficiency and our business needs.
EB: How do you find a suitable alternative for a component supplier who vanishes from the business due to bankruptcy or other business pressures?
We have been lucky enough not to face this situation till now, possibly because we review the financial performance of our suppliers through stringent tests before approving them as our suppliers.
EB: How does your company deal with low-profit or low sale product line closures by suppliers, which leads to no customer support for these products?
For all such situations, we always have our back-up plan ready, envisaged at the time of the product’s launch itself. To elaborate on this point, we are proactive in dealing with such situations by regularly analysing our sales and product mix, which helps us foresee and forecast these situations. So there is a back-up plan in most of the cases, ensuring we sail through.
EB: How do you combat the counterfeit or grey market?
We have our internal set of SOPs (standard operating procedures) and parameters, which the sourcing and the quality teams strictly adhere to. As a principle, we always prefer and ensure direct buying from manufacturers or from their authorised distributors.
