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Since we last talked to Bob Duke, president of American Standard Circuits’ Global Sourcing Division, I wanted to see how things are going and what a difference a year makes. Not surprising, and knowing how Bob operates, things are (spoiler alert) going great. Check it out for yourself.
Dan Beaulieu: Bob, thanks for talking with me today. How are things going?
Bob Duke: I’m happy to report that the business is doing well, so much so that we have moved into a new location, which gives us 12,000 square feet of warehousing space for our customers.
Beaulieu: Excellent. So, people are taking to this concept of global sourcing?
Duke: Yes. Our ability to warehouse their product until they need it is working really well. With global sourcing, we’re able to warehouse and ship the product to them within 24 hours. This has significantly reduced their lead time.
Beaulieu: How much have you grown in the past year?
Duke: I can tell you the Global Sourcing Division and met its forecast for 2023.
Beaulieu: How is it looking for 2024?
Duke: I have forecasted we will more than double our sales for 2024. The quoting activity we are experiencing has increased significantly, which is a good problem to have.
Beaulieu: Bob, tell me about some of the products you are helping people find.
Duke: You would think traditional electronic products like magnetics and PCBs would be at the top of the list, but surprisingly it’s metal fabrications. Don’t get me wrong, we are doing well in the other areas, but this segment is currently on top.
Beaulieu: Good to hear. Are you just in China or other parts of the world?
Duke: We have been focusing on other countries like Vietnam and India recently and have made some progress in those countries. In fact, I was in Vietnam visiting new potential suppliers last December, and I am happy to say that we will be placing trial orders there as part of our qualification process. I’m confident they will do well.
Beaulieu: How are you managing the current anti-China geopolitics?
Duke: While some customers are focused on our activity outside China, we still have a customer base that understands the risk and feels that it’s greatly reduced by the inventory we carry for them in our warehouse. Six months to a year’s worth of product is enough to allow them to resource the business in another country or to bring it back to the U.S. in the event the relationship with China falls apart completely.
Beaulieu: What other countries do you deal with?
Duke: We now have sources in Vietnam, India, and Thailand, and the plan is to grow the supply base in those countries.
Beaulieu: Besides PCBs and other electronics, what other products are you sourcing for your customers?
Duke: The Global Sourcing Division is known for its ability to source a variety of electronic products that would be a part of an electronic product or “box build,” however, we are increasingly given an opportunity by many customers for non-electronic products. They’ll say, “I know this is not on your list of typical products you source, but can you find this product in any of the countries you source from?” The answer is that we are always happy to try.
Beaulieu: What is your procedure? How does it work if I want to find a product through your services?
Duke: We have a huge network of suppliers willing to make recommendations for other companies and company owners. We also attend trade shows in those targeted countries. Those are a few of the easy ways we approach this. The work begins once you identify a potential supplier. Meeting the owners, going on a plant tour, checking references, and getting a market basket quote are all part of the process.
Beaulieu: Can you give examples of some of the projects you have taken on and how much money you have saved companies?
Duke: We do our best to save customers 15–20% of what they might pay domestically for their products. So far, we have accomplished that, with the benefit of additional savings from our ability to warehouse that product. We have numerous case studies. Right now, I’m working on a PCBA project for a client that spends approximately $4 million a year. Through our quoting process, it appears we will be able to save them close to $1 million with a partner in Vietnam. Please understand that this will happen over many months, not all at once, but it’s typical of what we see with most of our customers.
Beaulieu: How do you vet and select the companies and products you source?
Duke: We start by meeting the company owners and taking a plant tour (quality audit) of their operation. This is a very important component of our process. If we can’t meet the owner(s), we know we are not important to them, and ideally, they are not a good fit for us. But if all goes well in our meetings and tours, we ask for references and ask if they are already doing business in the U.S. From there, we develop a market basket for them to quote so we can see where their pricing comes in. If all goes well, we place a qualification order and do a source inspection before the product ships. We inspect it again after it arrives in the States to be sure our requirements have been met.
Beaulieu: Do you manage all the logistics?
Duke: Generally speaking, yes, both air and ocean, depending on the product and how urgently the product is needed. Of course, we have some customers who have contracts and would prefer to manage their own freight, which is fine. We offer this service when needed.
Beaulieu: Tell me about the new warehouse.
Duke: Growth of the Global Sourcing Division is always good, but it comes with the pains of moving into a new location. In February, this division moved into its new, 12,500-square-foot location at 1151 Atlantic Dr., West Chicago, Illionois. It has a modern sprinkler system, a 24-hour video surveillance and state-of-the-art alarm system and, of course, is fully insured. We have 570 pallet locations.
Beaulieu: What benefits will this warehousing feature provide?
Duke: We have found that most of our customers are happy to take advantage of our warehousing feature. It allows them to save space by not warehousing the product themselves, and the benefit of not having to pay for the product until it’s shipped to them. It’s a win-win for us and our customers.
Beaulieu: Bob, other companies are doing what you do. What makes you stand out?
Duke: Yes, however, ASC Global Sourcing does a great job for companies with low volume, high mix-type products, where our competition tends to focus only on very large opportunities, likely because of their supply base.
Beaulieu: What do you consider great service?
Duke: It starts by thoroughly understanding your customers’ expectations. Having a price lower than what they currently pay is only a portion of what it takes to be great. A quality product delivered on time with solid communications from start to finish is critical. That’s what I call great service.
Beaulieu: What do you consider to be a successful project?
Duke: I would say a successful project is one that our division takes on that saves our customer money, is delivered on time, and most importantly, meets their quality requirements. When we take on a new project, those are our expectations right at the start.
Beaulieu: Anything you would like to add as we wrap this up?
Duke: If you haven’t yet, give us a try and see what we can do for you. Drawings, an EAU, and short discussion up front are all it takes to get started.
Beaulieu: Bob, thanks for spending time with me today.
Duke: My pleasure as always, Dan.
