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Finding strategic connections and success while rooted in Michigan
All businesses face challenges, of course. Even giant multinationals working with advanced manufacturing. But you would not expect identifying and meeting new suppliers to be one of them.
Yet that is precisely the challenge that faced thyssenkrupp System Engineering, Inc., a company of thyssenkrupp AG.
While automotive companies typically build their products on assembly lines, thyssenkrupp System Engineering manufactures the assembly lines themselves. In particular, the company focuses on powertrain assembly lines. Yet due to the unique nature of the work it does, finding suppliers nearby proved easier said than done.
"Our needs are very different from those of the automotive tier one suppliers," said Scott Mors, Head of thyssenkrupp System Engineering's Procurement and Supply Management and chairperson for the company's North America Purchasing Council. "They focus on parts produced in mass production runs. We buy one or two parts at a time. We don't need expertise in the way customer’s product functions. We design machines around the various operations needed to manufacture our customer’s product."
The company has done business in southeast Michigan for decades. And historically, it has relied repeatedly on the same limited number of suppliers. While it has established relationships with high-tiered suppliers, it has often struggled to line up connections for smaller-scale, often urgent projects.
But a growing relationship with the Michigan Economic Development Corporation's (MEDC) Pure Michigan Business Connect (PMBC) program has expanded the company's supplier horizon and even created some unexpected new opportunities.
Based on his existing relationship with the MEDC around access to grant opportunities from a previous role, when Mors moved tothyssenkrupp System Engineering, the connection grew to include PMBC.
"Trying to find the supplier expertise we need is really a challenge," Mors said. "The great thing about our relationship with MEDC is that they're very focused on our business and our overall success as a company. We can write a description of what we're looking for, and they help us make the connection."
The assistance extends beyond introductions and matchmaker events to what Mors describes as "phenomenal help in explaining our business in detail."
The company’s need to protect proprietary information means that typical first meetings with potential suppliers are often constrained. The company and candidate suppliers often require a second meeting to discuss issues of substance, but the partnership between thyssenkrupp System Engineering and MEDC expedites the process, making it more efficient for all parties.
"The MEDC’s PMBC program helps compress that process into a single day," Mors said. "We'll typically start in the morning with presentations that are very focused on what we're looking for. The suppliers can then decide if continuing the conversation is worth their time.”
"We'll talk to the audience about what it takes to be a thyssenkrupp System Engineering supplier. Audiences love that openness. We don't have the internal resources to make those kinds of connections without MEDC’s help."
By working with the MEDC’s PMBC program, the company is also able to acquaint suppliers with thyssenkrupp's other companies in a variety of fields, including materials processing, supply chain solutions which provide sequencing and warehousing services to many industries, industrial components such as forgings and bearings, and much more.
One critical product of such networking: sold business. In 2020, for example, the company executed 13 contracts with Michigan suppliers, worth a total of $810,000.
Mors has found that the number and depth of MEDC’s connections and its willingness to use them to benefit Michigan companies extends even beyond the state's borders. At the end of the day, the company's open dialogue with MEDC about its requirements pays off for both suppliers, assuring the company it will always have opportunities to grow – and thrive – by doing business in Michigan.
For more information on the PMBC program and how other companies have benefited from its services visit michiganbusiness.org/pmbc.