external quality and pre- qualifying vendors," says Agnew. A Director of Supply Chain Management position was created in 2009 and given responsibility for not only traditional procurement activities but also all the quality initiatives as well as shipping and receiving. " The thought was that, from the initial assessment and identification of a vendor through prequalification and the pre- tender and tender process, we'd want to have quality involved," says Agnew. " And then the next people who touch that material are in the shipping and receiving department, so we wanted them folded in and involved as well." That move has come with its share of costs, with the amount the company spends on those activities doubling in the past year. " But to us it's a classic case of $ 10 in overhead up front saving $ 100 of direct cost down the road," Agnew says. " All it takes is one ' Oops!' or ' Uh-oh!' with a supplier to easily turn into a million dollars of rework. And if you go back to that $ 600,000 day rate for the rigs, you can see that if something in the supply chain is delayed, it can be costly. Of course, we have protection in contracts for the bottom line, but from a reputation standpoint, a 10- day delay or a three- month delay that becomes $ 54 million to the customer- that's not something we ever want to be associated with. " It's important that the supply chain delivers the right quality at the right time because it has a huge effect on our customers' profitability," Agnew adds. " But more than that, for us, success isn't just delivering equipment and technology that works better than our competition but also getting it there on time and helping our customers maximize their use of it. If we can do that, we'll continue to be an invaluable partner to them, and they'll continue to come to us as they look to push exploration into deeper waters and require even more advanced technology." technology will perform under a variety of conditions. The advanced nature of the technology helps keep competition to a minimum, and Aker is one of only two major companies servicing the deep- water drilling market. To keep its competitive edge, Aker is not only embracing the service side of the business- working with customers early in the design stage and working with them throughout the lifecycle of a rig- but also continually enhancing its product design. For instance, over the past three years, Aker has been actively designing a new modular approach to derrick drilling design. Working with the world's largest deep- water drilling company, Aker has developed a solution to a longstanding problem- the costly downtime associated with repairing top- drive drilling rig breakdowns. " When top drives fail, you have down time," notes Agnew. In a land- rig setting, a day's downtime might cost $ 20,000. But in a deep- water setting, a single day without drilling can mean a cost of $ 600,000, meaning $ 3 million can be racked up in just five days. The resulting solution is a modular design that enables parts to be hot- swapped in a matter of hours rather than days. " There are additional costs, but they are small compared to what a driller stands to lose if the rig is off line for just a couple of days." As recently as five years ago, the Aker MH business was 80 percent manufacturing and 20 percent service. That mix has shifted to 65 percent manufacturing and before long will likely be more of a 50- 50 split. That shift to increasingly outsourcing the " dumb steel" part of the manufacturing process has meant an increased need to focus on the quality of the work being done by those third- party suppliers and partners. In fact, some 60 percent of Aker MH, Inc. revenue goes to raw materials and manufactured components. " We realized, given that number, that we needed to put more energy and effort into Aker MH, Inc. JANUARY 10 www. bus- ex. com 197 Hirschfeld Industries is one of the largest fully integrated fabricators of highly engineered structural steel components in North America. With eleven facilities providing a national presence, Hirschfeld is a major participant in the expansion and redevelopment of the U. S. transportation and energy infrastructure systems. Our focus is to exceed our client's expectations on every project. Hirschfeld Industries