Interview with the Head of Purchasing

From diamond powder to coveralls and everything in between, Preciosa Components’ head of purchasing, Petr Ježek, oversees the acquisition of it all. Together with his team, Petr is responsible for the regular purchase of thousands of different materials needed for everything from production to machine maintenance and is a steadfast believer in quality.

Petr Ježek, head of purchasing

After sixteen years in Preciosa’s purchasing department, Petr Ježek is by now somewhat of an expert in purchasing rare and expensive commodities, like silver and gold. Which might come as a surprise given that Preciosa is a producer of glass, not jewelry. But there are many surprising things about Petr’s job and by extension the large-scale production of more than 25,000 different crystal components.

We sat down with Petr just before the holidays to discuss the trials and tribulations of purchasing in the post-Covid era, how Preciosa vets its many suppliers and the importance of testing, testing, testing!

Preciosa: Let’s begin with the kinds of materials you and your team purchase. Can you give us some examples? What is the most expensive material? The most important?

PJ: The most expensive materials (by far) are precious metals. These account for the largest percentage of the costs because we buy a lot. For instance, Preciosa purchased more than 13 kilograms of gold during the first half of this fiscal year alone, which is used primarily as a coloring agent and for metallic coatings. We also buy a lot of silver – roughly 300 kilograms every year, which we use for foiling. And then there is platinum, which is needed primarily for auxiliary products such as furnace dischargers or platinum melting pots used both for experimentation with new glass recipes as well as large-scale production of some specific colors.

By volume, our largest annual purchase is sand, which might seem obvious given that it is the single most important ingredient for glassmaking. Preciosa’s Components division alone consumes around 600 tons of glass sand every year, all of which is sourced locally. Because it is so important, it is crucial that we maintain a stable source, as the slightest change could impact the quality of our product. Glass sand from different areas of the world contains varying levels of trace minerals like iron, for example. If we changed the geographical source of the sand, we would have to change all our glass formulas, and some may not even work at all. I cannot overstate how important sand is to our business.

Preciosa: What is the most challenging aspect of your work?

PJ: The most challenging aspect is also the most important, which is making sure that our production is never slowed down or limited due to lack of materials, especially now with the recent increase in demand. Not only does this extend to raw materials used in the actual glass mixtures, but also materials needed to produce and maintain our machinery and tools. A good example of this type of material would be diamond powder (basically, monocrystalline synthetic diamonds) or cerium oxide, which are used for cutting and polishing discs.

Another example would be detergents used to wash the semi-finished stones during production, which is surprisingly and technologically sensitive as the detergent needs to wash off any impurity caused by the machinery without damaging damage the stones. We are buying tens of tons of detergent every year, and— like with the sand—the smallest change could cause major problems in production. It is not only about price – any change in supplier needs to be approved both by production and R&D.

Beyond Grains

"If we changed the geographical source of the sand, we would have to change all our glass formulas, and some may not even work at all. I cannot overstate how important sand is to our business," says Peter.

By volume, Preciosa's largest annual purchase is sand, which might seem obvious given that it is the single most important ingredient for glassmaking. Preciosa’s Components division alone consumes around 600 tons of glass sand every year, all of which is sourced locally.

Glass sand from different areas of the world contains varying levels of trace minerals like iron, for example.

Preciosa: Global supply chains are still recovering from disruptions caused by the pandemic and gas and electricity are now exponentially more expensive in Europe as a result of the war in Ukraine. How has this affected purchasing specifically?

PJ: As was the case in pretty much every industrial sector, we noticed an increase in prices across the board, longer delivery times and complications with availability as well as logistics and transport – exciting times! And before the supply chains could recover from the pandemic, they were of course affected by the war in Ukraine. In some market segments, the situation is still precarious though the availability of many materials has improved already. Some, however, have gotten worse – for example, automation and electric parts, for which delivery times can easily reach up to 45 weeks. It is also challenging to find alternative suppliers both because of our stringent quality testing and/or because the availability of materials changes rapidly with many of them. Our work is definitely more demanding these days. And, of course, we are affected by the ever-present price increase of the raw materials.

Precious metals and rare-earth oxides are bought and sold according to daily market price—much like the stock exchange—and markets this year have been extremely volatile. Some have fluctuated by as much as 100% during the past six months.

Preciosa: Wow, that is a lot. Can you give us an example? How did your team handle it?

PJ: The craziest example would be rhodium, which we use for various purposes including plating metal settings. The price shot up by three or four hundred percent overnight, so we had to find an immediate solution to replace rhodium wherever possible. For example, our platinum melting pots that I mentioned earlier are a mixture of platinum and rhodium. We had to find a way to replace the rhodium because the price of even a tiny amount would have been more expensive than the price of much more platinum! It was a lot of back and forth with R&D, but, fortunately, we managed.

Preciosa: It seems like a huge part of your job is the purchase of precious metals. Where do they come from? Is the procedure very complicated?

PJ: It is. Suppliers of precious metals and their products undergo a relatively standard certification process – this is more straight forward than say the purchase of rare-earth oxides, such as cerium, erbium or praseodymium. They are called rare-earth oxides because they are just that – rare. Some of these elements cannot be bought anywhere outside of China, as it is the only country with naturally occurring deposits. Given the problems with transportation during the past two years, we decided to stock up on some of these materials to ensure we have enough to continue production even when waiting on a longer-than-usual delivery time.

Preciosa: How does Preciosa vet its suppliers? Is it a complicated process?

PJ: Our suppliers of strategic materials are rated by annual assessment that covers all aspects of our business relationship. Materials classified as “strategic” are highly sensitive and very important to our production, so we are careful of any changes within any of the companies that supply them. Sometimes we get offers for slightly cheaper materials, but we won’t even consider it until it has been thoroughly tested. If we necessarily need to make changes to any of our ingredients, we must first consult with our production team, or, if the change is really significant, we send everything to be tested by R&D before it gets used in small-scale production to see if there is any detectable difference in appearance, behavior or quality. Only then will we begin using material from a new supplier. When it comes to vetting the suppliers, we perform a thorough audit which always includes an in-person visit to the factory to ensure among other things that the supplier has sufficient quality control procedures in place. We also ask for references, look at the company’s history and verify its accreditations.

Preciosa: What do you enjoy most about your job?

PJ: Honestly, the people I work with.