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Subcontract Sourcing Requirements: An Industry-By-Industry Guide

Colin Shaw
aerospace engineering concept showing plane engine components

As a sourcing account manager, I deal with lots of different projects spanning a wide range of industries. Buyers from all sectors have a core set of basic requirements such as reliability and good quality; however, there are also plenty of purchasing needs that are very specific to individual industries.

For subcontract suppliers who are looking to expand their customer base, or are looking to work within a specific sector, it's important to understand what these requirements are. Here is a breakdown of some of the most popular sectors and their individual sourcing needs:

Aerospace:

Aerospace is a very heavily regulated industry because it's so safety-conscious. Therefore, it goes without saying that most aerospace companies require their suppliers to hold certain accreditations. ISO 9001 certification is a baseline for working within the aerospace sector, although AS 9100 is sometimes required for more involved or safety-critical projects. Those who are looking to work predominantly within the aerospace industry may certainly benefit from gaining AS 9100 approval. Aerospace projects also tend to be very sensitive, so suppliers can expect to have to sign non-disclosure agreements with buyers before viewing any technical drawings. 

There are two sides to aerospace subcontract manufacturing - standard purchasing, as well as R&D. R&D work will involve short runs of prototype parts, whereas purchasing tends to be more generalised. Aerospace OEMs also differ slightly from other industries in that they tend to form long-term partnerships with subcontract engineering suppliers, who subsequently handle a majority of their outsourced manufacturing requirements. This is definitely a good route to go down for any suppliers who are keen to work within aerospace, as a partnership will lead to a substantial amount of repeatable work.

It's also worth noting that subcontract suppliers to the aerospace industry may be expected to adhere to short lead times, meaning that material stock or KANBAN solutions may be favourable. Suppliers will also benefit from being 4IR-ready in order to ensure longevity to any working relationships with OEMs.

READ: How to Break Into Aerospace Engineering

Rail:

The rail industry shares a lot in common with the aerospace sector, due to the fact that it is also a safety-centric field which doesn't allow any margins for error. This means that ISO 9001 accreditation is usually also required as standard, although AS 9100 may sometimes be needed as well. Another similarity that rail shares with aerospace is that rail OEMs also tend to form partnerships with sole suppliers; however, in the rail industry, these tend to be much more project based than in aerospace where the relationships are generally much more long-term.

This also provides insight into how the rail industry conducts its purchasing. Rail requirements are very rarely ad-hoc; instead, rail OEMs focus on outsourcing large amounts of work at any one time. This means that suppliers are usually invited to tender for either the whole - or part of - a project, which means devoting a large part of their capacity for a given period.

The rail industry usually requires components to be made in a limited number of materials, with mild steel being especially common. Electronics are also commonly required by the rail sector, making it an ideal industry for those who specialise in these processes.

READ: Can You Afford NOT to Look For New Business?

Shopfitting:

Due to the fact that shop displays are customer-facing products, shopfitting is a very aesthetically-focused industry. While sheet metal forming and profiling are commonplace within this sector, suppliers will also usually be responsible for completing any applicable finishing processes, such as powder coating, blasting and polishing.

The shopfitting industry is very price-sensitive, although quality also plays an important role. Projects can incorporate any number of materials, with bright mild steel, glass and wood especially commonplace within the shopfitting realm. Suppliers can expect to work to a 4-6 week lead time as standard, although some projects may be more urgent.

Shopfitting is a much more accessible industry to suppliers who are just starting out, due to the fact that accreditations are rarely required. Unlike aerospace and rail, OEMs within this sector do not tend to form partnerships with suppliers, although it should be noted that they often have preferred supplier lists in place.

READ: How to Write a Professional Engineering Quote

Oil & Gas:

Oil & gas tends to be one of the most heavily regulated industries, meaning that ISO 9001 accreditation is practically essential in order to complete subcontract work within this sector. It is also crucial that traceability is maintained and therefore, material certificates and certificates of conformity are almost always required. Oil & gas projects usually come with a degree of confidentiality; subsequently, non-disclosure agreements between the OEM and the supplier are regularly seen.

Oil & gas projects tend to involve more exotic materials such as titanium and inconels, making it a much more complex sector than most. However, it can be an extremely lucrative field - especially for those who specialise in large machining, which is a sought-after process. Oil & gas projects generally call for low volume, but high-value work - for instance, the machining of large shafts.

Although oil & gas may not be an appropriate industry for all engineering suppliers, it can certainly be a very worthwhile field for those who have the right setup and the necessary accreditations in place.

READ: How to Quote Your Engineering Business

Medical:

Under current circumstances, the medical sector has undergone a surge in activity, meaning that more subcontract work has become available from this industry. However, as you would expect, there are certain caveats to taking on medical subcontract work. ISO 9001 accreditation is commonly required from subcontract suppliers, who will also have to adhere to the relevant BS EN standard for the specific product they're supplying.

Medical-grade stainless steels are commonly used, though plastics, mild steel and exotic materials are sometimes required. As medical projects often require a fast turnaround, suppliers may benefit from having material stock to be able to react quickly to buyer requests.

Medical OEMs generally have preferred supplier lists in place instead of partnering with a specific supplier. Those who are looking to take on work from the medical industry can be assured that this sector incorporates a wide variety of processes and batch sizes; low-volume production within R&D work, and larger batches within general purchasing. There has also been a rise in medical suppliers seeking additive manufacturing processes, especially when it comes to the manufacture of prototype parts.

READ: Additive Manufacturing and the Medical Industry

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Looking to break into an alternative industry? Qimtek is more than happy to help! Simply call us on 01256 394 500, or email sourcing@qimtek.co.uk.

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About Colin Shaw

Colin has worked as a sourcing account manager at Qimtek since 2016. When he's not helping manufacturing buyers to find new suppliers, he enjoys hard workouts, driving the household up the wall by strumming away on his guitar, and battling his cats for his dinner.

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