When one is in the business of selling purpose-built manufacturing systems and equipment, one is frequently asked by one’s prospective customers to provide pricing for their goods and services. Depending on how well defined the needed solution is, which would be embodied in the equipment to be priced, calculated equipment costs can be widely variable. In these situations, where a selection of different technologies and even approaches may satisfy our prospect, we recommend that some preliminary engineering be performed to better define the needs of the client’s operation, and thereby provide criteria with which to limit options and better judge best fit/return on investment from the solution options.
“We don’t pay for quotes”
While multiple options all might move our prospect closer to his goal (but not necessarily deliver a stellar financial return), we might suggest that he hire us to do some investigative work to reduce possible selections along with project risk. The work would involve documenting system requirements, performing a technology investigation and selection. and developing a concept design, which then becomes the basis for a budgetary estimate. Frequently, as we ask that this critical defining work be funded by the client, we hear back an objection which goes something like this, “We can’t do that, we don’t pay for quotes from our vendors.”
Our suggestion to invest in some preliminary engineering as outlined is aimed at helping our prospect avoid settling on an adequate investment, and instead purchasing a very good solution that maximizes his return on investment.
Preliminary Engineering Matters
Let’s assume that our potential client has some established purchasing protocol, whereby he is seeking multiple bids from his suppliers. And, since our buyer has not vetted his opportunity beyond a performance specification, but has put together a Request for Proposal that describes the problem or opportunity and the outcome expected, here is what is going to happen. Each supplier is going to interpret the bid package he receives in light of his portfolio of existing equipment that might be brought to bear on the opportunity, and then spend his energy trying to convince his potential client that his existing equipment design is capable and adequate for meeting the provided specifications.
Consequently, when quotes arrive, they are likely widely different in price, solution technology, and approach. It then becomes incumbent on the buyer to determine which proposal, if any, is really the best fit for his business (that’s assuming the buyer has defined what the best fit needs to entail).
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Own Your Solution
In this cycle, we see that our buyer in not positioning himself to procure the solution he needs, he is about to buy a solution that his most adept supplier is trying to sell him. In the end, he doesn’t own the solution, the seller does. And a well prepared equipment purveyor will be certain to sell him equipment not built to his product or process needs, but warranted to the supplier’s machinery metrics (capacities, speeds, feeds, etc.)
At Optimation, we seek out clients that recognize the nuances involved in purchasing machinery versus solutions. We want the companies we do business with to be aware of when a project can be satisfied with quotes for standard equipment (for example, replacing 3rd party machines like computers, office equipment, etc.) and when a project whose purpose is to improve a manufacturing process for a specific purpose (like more capacity, improved yields, added features) requires what we refer to as some Front-End Loading effort.
These clients willingly underwrite the collaborative effort we offer to identify their business drivers, interviewing the client’s stake holders and document their User Requirements, investigate applicable technologies and do a comparative analysis leading to a preferred platform … this is then packaged into a Concept Design, which is reviewed together, approved, and then used as a basis to calculate execution costs and affirm business case. These preferred customers now know that they own the solution, and it’s going to be a good one.