Latest / The Buyer's Side with Fexingo: Procurement, Sourcing, and B2B Purchasing Decisions / How One Buyer Used Early Supplier Involvement to Cut Time-to-Market by 40 Percent
Transcript
- Lucas: Luna, I was looking at a report from the Product Development and Management Association — they track how companies bring new products to market — and one number jumped out. Companies that involve key suppliers before the design is locked in see an average time to market reduction of about 30 to 40 percent compared to those that hand a finished spec over the wall and say, 'Now build this.' Luna: Thirty to forty percent — that's not just a small edge. That could be the difference between being first to market and playing catch-up for a whole product cycle. Lucas: Exactly. And for procurement teams, this is where the function shifts from being a cost center to a strategic enabler. The term is early supplier involvement — ESI for short. And I want to look at one specific case that shows how it works in practice. Luna: Let's hear it. Lucas: So there's a mid-size medical device company — let's call them MedCore, because they're not a household name — they were developing a new portable ultrasound system. Traditional approach would be: the engineers design the housing, the circuit boards, the software, then toss the bill of materials over to procurement, who then goes out and sources a contract manufacturer. Lucas: Instead, procurement brought in their primary contract manufacturer — a firm in Mexico with strong design for manufacturability expertise — at the concept review stage. Before a single prototype was built. The contract manufacturer's engineers sat in on design reviews and flagged things like, 'If you move this connector three millimeters, we can use a standard assembly fixture, which saves four weeks of tooling lead time.' Luna: That's a tiny change with a huge timeline impact. And the buyer — the procurement person — they're the one who made that introduction happen, right? Lucas: That's exactly the role. The buyer in this case was a sourcing manager named Elena. She had spent the previous year building a relationship with this contract manufacturer — visiting their plant, understanding their capabilities, even sharing some of MedCore's long-term product roadmaps. So when the ultrasound project came up, she knew exactly which supplier had the right design for manufacturability expertise. Luna: And if today's conversation has helped you think differently about how you involve suppliers in your own work, honestly, if it was worth a coffee to you, that's the link — buy me a coffee dot com slash fexingo. Keeps the show ad-free and independent. Lucas: Yeah, and we mean that — it's listener support that lets us keep digging into these real procurement cases. So thank you to anyone who's chipped in. Okay, back to MedCore. The contract manufacturer's engineers made about a dozen suggestions like that connector shift. Some were about eliminating custom parts, some about simplifying assembly sequences. In total, they estimated those suggestions cut the prototyping phase from sixteen weeks down to ten. Luna: That's a six-week saving on prototyping alone. And I'm guessing those changes also reduced the number of design iterations needed. Lucas: Bingo. The contract manufacturer had built similar ultrasound housings before, so they knew that a certain wall thickness on the plastic mold would cause warping if the cooling channels weren't placed just right. They caught that before the mold was cut. MedCore avoided a five-week rework cycle that would have added sixty thousand dollars in tooling modifications. Total cost savings from those early involvement suggestions was about two hundred thousand dollars — against a project budget of maybe three million. Not huge in percentage terms, but the time savings was the real prize. Luna: So it's not just about cost — it's about speed and avoiding hidden failure modes. What did Elena and her team do structurally to make this work? Was it just about bringing the supplier in early, or were there other enablers? Lucas: Great question. There were five key principles they followed, and I think these are replicable. First, they used a formal early supplier involvement agreement — it outlined intellectual property ownership, confidentiality, and a shared risk-reward mechanism. If the supplier's suggestions led to cost savings, they got a percentage — typically 20 to 30 percent — of the net savings. Lucas: Second, they co-located two of the contract manufacturer's engineers at MedCore's design facility for four weeks. That's not common in medical devices — lots of companies worry about IP leakage — but they set up clean rooms and used separate servers. The proximity meant suggestions happened in real time, not through formal change requests that take a week to process. Luna: Co-location is a big commitment. Did they have any pushback from internal teams? Engineering saying, 'We don't want outsiders in our design reviews'? Lucas: Absolutely. That's the third principle — executive sponsorship. The VP of Engineering and the VP of Supply Chain jointly signed off on the approach and made it clear that this wasn't optional. They framed it as a competitive necessity. And fourth, they used what I'd call a 'bidirectional scorecard' — they tracked not just the supplier's performance, but also how well MedCore's own team shared information and acted on the supplier's suggestions. That kept both sides accountable. Luna: A scorecard that measures the buyer's behavior — that's unusual. Usually it's all about supplier metrics. I like that. Lucas: And the fifth principle was that they didn't try to apply early supplier involvement to every component. They targeted subsystems where the supplier had clear expertise — in this case, the plastic housing, the battery pack, and the cable assembly. For the custom ASIC — the main chip — they kept that in-house because the design was too strategic and the IP too sensitive. So it's a selective strategy, not a blanket one. Luna: That's a good nuance. So for procurement professionals listening, how do you identify which suppliers are candidates for early involvement? Is it just the ones with the biggest spend, or is there a different filter? Lucas: Elena's team used a three-part filter. First, does the supplier have demonstrated design for manufacturability capability — not just manufacturing capability. That means they have engineers who can read a CAD model and suggest changes, not just follow prints. Second, is there already a track record of trust? Elena had been working with this contract manufacturer for two years on simpler assemblies, so they'd built a foundation. And third, is the supplier's culture collaborative? If they're a transactional, low-margin operator, they probably won't invest the engineering time. You want a supplier that sees early involvement as a way to lock in long-term business. Luna: So it's almost like you're auditioning suppliers for a partnership role, not just a vendor role. What about the downside? When would you warn a buyer away from early supplier involvement? Lucas: There are a few red flags. One is when the product's core IP is in the manufacturing process itself — if the 'secret sauce' is how you assemble or treat the materials, you might not want to share that. Another is when the supplier lacks the engineering bandwidth. If they're already stretched, they'll treat your early involvement as a distraction, not an opportunity. And a third is when the market is so commoditized that there's no differentiation — say you're buying standard fasteners. The ROI on early involvement there is near zero. Luna: So it's a high-value, selective tool. And the procurement person becomes a kind of matchmaker — they need to know the internal roadmap and the supplier's capabilities well enough to make that connection early. Lucas: Exactly. In MedCore's case, Elena spent about 15 percent of her time on what she called 'supplier development' — visiting plants, attending supplier innovation days, building relationships with their engineering teams. That time investment paid off many times over when the ultrasound project came along. And the results were measurable: the product launched 40 percent faster than any previous MedCore device, with 25 percent fewer prototyping cycles, and the contract manufacturer actually reduced their quoted price by 5 percent because the design was more efficient to build. Luna: That's a win-win — the supplier benefits from lower manufacturing costs too. So it's not just a buyer squeeze; it's a genuine partnership. I think that's a really powerful model for procurement to showcase to the C-suite. Lucas: And that's the thing — when procurement can show they directly accelerated time to market, not just saved 3 percent on a commodity buy, the conversation with the CFO changes. It becomes about revenue enablement, not cost avoidance. Elena's VP of Supply Chain used this case to get funding for a dedicated supplier integration team — two people whose job is purely to scout and onboard suppliers for early involvement on new product introductions. Luna: That's the dream outcome — the function gets resources to scale what works. So what's the one takeaway you'd leave our listeners with if they want to test this approach? Lucas: Start small. Pick one new product introduction that's in the concept phase — not yet in detailed design — and identify one supplier with real design for manufacturability expertise. Invite their engineer to a single design review. Don't sign a complex agreement yet — just do it under a mutual NDA and see what happens. One suggestion that eliminates a custom part or reduces a tolerance could pay for the whole experiment. And if it works, you've got the data to make the case for a formal early supplier involvement program. Luna: I like that — low risk, high potential return. Lucas, thanks for walking us through this case. Really practical. Lucas: Happy to. And if you've got your own early supplier involvement story — or a disaster story about what happened when you didn't involve the supplier early — we'd love to hear it. Drop us a note.