Document 5LJZ1Mv8reQyKeV4b25YD1jED

FILE NAME: Copeland (COP) DATE: 1986 June 4 DOC#: COP002 DOCUMENT DESCRIPTION: Letter Dear Abbott: In response to your le t t e r o f t h a t we cou ld j o i n t l y work on to improve q u a lit y , I welcome be brought to your a t t e n t io n . i May 5 , 1986, in w hich you Irequested su g g e stio n s fo r areas in an e f f o r t to reduce e ith e r co st or in v e n to r y , o r ideas your lis te n in g e a r. Several item s e x is t th a t I fe e l Should ' L e t me f i r s t e x p la in a s i t u a t i o n t h a t Gary West and I have been working on to g e th e r . I ' l l use t h is op p ortu n ity sim ply to emphasize our predicam ent. Nearly a ll o f the gaskets t h a t we su p p ly to Copeland c o n ta in a s b e s to s . A lthough we have always t e s t e d below minimum stan d ard s as s e t by th e s t a t e o f O h io , i t i s becoming very e v id e n t t h a t we w ill be fo rce d t o fin d a s u b s t it u t e f o r asb e sto s fo r se v e ra l re a so n s. The f i r s t o f th e se reasons i s fe d e r a l r e g u la t io n s . The jsu b ject o f asb e sto s has so many n egative connotations th a t the fed eral government is s ta r tin g to take steps to even tu ally e lim in a te i t s u se . To begin w it h , th e q u a n tity o f asb e sto s f ib e r s p erm itted to be a i r borne i s being redu ced, I f e e l t h a t through th e m ethods)that we use and th e p a r tic u la r m a t e r ia ls t h a t we c u t , we cou ld p ro b ab ly meet any standard th a t may be s e t fo r q u ite some tim e ; however, I a ls o b e lie v e t h a t i t i s o n ly a m atter o f tim e u n t il th e use o f a sb e sto s w i l l be banned. The second reason to fin d a s u b s t it u t e m a te r ia l i s to calm employee co n ce rn . We now have a t r a in in g program t h a t makes employees aware o f any hazardous m a te ria l t h a t they may be exposed t o . A sb estos i s one such m a t e r ia l. "A sb estos" has become such an em otional th o u g h t, t h a t many people fe e l th reaten ed even though th e y have no r e a l p h ysical reason to s u b s ta n tia te t h e ir f e a r s , For t h i s r e a s o n , I Would l i k e to e lim in a te asbestos from our shop. I see t h is t h ir d reason as th e f i n a l blow to the asbestoi is s u e . L i a b i l i t y in su ran ce i s becoming more d i f f i c u l t t o o b ta in fo r anyone who handles asb e sto s p ro d u c ts. I am sure t h a t you have heard many horror s t o r i e s con cern in g l i a b i i t y in su ra n ce . B e lie v e me, many sm all g ask e t houses are s u f f e r in g w ith o u tra g e o u sly h ig h premiums and many are r is k i n g t h e i r e n t ir e b u sin e ss by o p e r a tin g w ith o u t in s u ra n c e . In d u stry Products must o p e ra te w ith in s u ra n c e . As o f now we a re covered through 1986. H o p e fu lly our coverage w i l l be extended th rou gh 1987, but a t what c o s t we sim ply do not know. I t is for these reasons th a t Indu stry Products needs to discontinu e cu ttin g asbestos a y ea r from now. What t h i s means i s t h a t we need to work w ith your P u rch asin g and E n g in e e rin g Departments to a ch e iv e t h i s g o a l. We know ofi se v e ra l m a te r ia ls t h a t should work in your a p p lic a t io n s . I b e lie v e t h a t a program need's to be s e t fo r t h so t h a t we can t e s t th e se m a te r ia ls and e lim in a te asb estos frbm our shop as w ell as your product. The second suggested area to work on d e a ls w ith m a te ria l co n tro l and s c h e d u lin g . A c t u a lly , t h i s area can be broken down in to th r e e subgroups: 1) Lead Tim e, 2) Sch edu le Changes, DIE CUTTING AND FABRICATION OF NON-MEJALUC MATERIALS GASKETS ELECTRICAL INSULATION TERMINAL BOARDS SHROUDS * COPPER SEALS IPC000066 and 3) Minimum q u a n t i t i e s . I w ill address them I n d i v id u a l ly . 1} Lead Time: Copeland has never given v ery much lead tim e . To th e employees o f In d u stry P ro d u cts, t h i s f a c t i s accepted as a way o f l i f e . I w il l even say th a t because o f your s h o r t lead t im e s , our r e la t io n s h ip prospered because we have always tak en pride in being a b le to s e r v ic e th o se le a d tim e s . What concerns me i s when I hear about ju s t - in - t im e in v e n to r y . From where I s i t , we are a lr e a d y t h e r e . To i l l u s t r a t e t h i s p o i n t , our b egin n in g book fig u r e (open o rd ers) fo r the p a s t few months has been around $150,000. However, our ending s h ip f ig u r e has been $25G,GO0~$28O,QQO. T h is means t h a t we are r e c e iv in g a p p roxim ately two weeks le a d tim e . I also b e liev e th a t the ju s t-in -tim e process does not reduce lead tim e. In f a c t , ju s t the o p p o site may be t r u e . S in c e th e system i s based on knowing what w ill be needed when, i t might even lead to Increased lead tim es. Unless vendors are given the proper lead times to op erate ju s t - in - t im e , th ey sim ply begin to act as a warehouse ca rry in g high le v e ls o f stock in order to react to a customer' s needs. 2) Sch ed u le Changes; I suppose t h i s in t e r a c t s w ith th e lead tim e is s u e . I have to ld my people t h a t once an o rd er e n te r s a two week window, i t i s sh ip p a b ie and th e o rd er cannot be reduced o r moved o u t . T h is i s th e o n ly way we can handle th e schedule changes t h a t we re c e iv e , Q u ite o fte n i f we don' t sh ip e a r ly and w a it fo r th e due d a te to s h i p , th e part w ill be moved up anyway, o r we may be running i t in th e p ress and i t g e ts moved o u t . In an e f f o r t to s o r t the c o n fu s io n , we have found t h a t u sin g th is -tw o week window h e lp s . 3) Minimum Buys: Minimum q u a n tity buys i s an Is s u e th a t i s becoming a b ig problem fo r u s . L a s t month we had 50 in v o ic e s t h a t were le s s than $25.00 e a ch . O f those 50 i n v o i c e s , the average d o l l a r amount was $ 8 .0 0 . I t i s not e f f i c i e n t to process and f i l l o rd ers o f t h is s i z e . I am proposing t h a t we u t i l i z e a minimum q u a n tity o f $75.00 per r e le a s e . T h is would mean t h a t fo r any purchase o rd er re ce iv e d f o r le s s than $ 7 5 .0 0 , we would a d ju s t the q u a n tity to equal a $75.00 b i l l i n g . T h is way you m ight end up w ith se v e ra l months su p p ly o f low volume p a r t s , but you would not be o rd e rin g and h an d lin g th e se p a rts n e e d le s s ly . The t h ir d are a th a t we need to work more c lo s e ly and p o s s ib ly a l i t t l e harder a t i s coor d in a tin g p r o je c t s th rou gh E n g in e e r in g , There i s no doubt t h a t c o s t can be saved by changing m a te r ia ls , a lte r in g s p e c s , or p o ssib ly m odifying to le ra n c e s , However, i f th ese suggestions cannot be channeled th ro u gh E n g in e e r in g , th e y do not amount to much. L a s t y ea r we needed and r e c e iv e d a la r g e p r ic e in c r e a s e f o r many o f your v a lv e p la te gaskets At t h a t tim e we su g g e ste d an a lt e r n a t e m a te r ia l t h a t we f e l t could be used t h a t would o f f s e t p a rt o f t h a t in c r e a s e i f E n gin eerin g would t e s t and approve i t . As o f t h i s d a t e , some t e s t in g has been done but com plete t e s tin g is not fin is h e d . There are o th er suggestion s t h a t we co u ld make, but we fe e l t h a t E n gin eerin g does not share th e same p r i o r i t i e s as P u rch asin g when i t in v o lv e s c o s t r e d u c tio n . I must a ls o sa y th a t fo r th e p a st few months we have been working very c lo s e ly w ith Gary West on some o f th e se problems and w ith h is prodding we are s ta y in g on t r a c k a l i t t l e b e tte r In summary, th e se are th e th r e e areas t h a t I fe e l should be in v e s t ig a t e d . O ther than our a sb esto s s i t u a t i o n , th e y are general enough th a t other vendors would a lso b e n e fit from any im provem ent. I share your concern fo r c o s t containm ent and fe e l t h a t your approach i s a good o n e . H o p e fu lly , by a l l concerned w orking t o g e t h e r , we can fin d some c o s ts to redu ce. Si neerely, INDUSTRY PRODUCTS COMPANY KWC/dkm Ken W, C levelan d Executive Vice-President IPC000067