The Quiet Revolution
The World Class Manufacturing (WCM) revolution refocuses our selling efforts to the changes on the customer’s factory floor. In the meantime, are we missing the quiet WCM revolution taking place in the purchasing department? In the new world order of WCM, purchasing plays the role of “guardians of value.” By obtaining the raw materials, they forge the first link in the value-added chain. They also buy the equipment which “adds value” to the raw materials.
Two New WCM Purchasing Trends
Two undeniable WCM
purchasing trends directly affect the sales engineer: 1) reducing in the
number of suppliers and, 2) procuring equipment in a team. Typically,
purchasing forms a team consisting of manufacturing engineers, product
designers, quality engineers, production managers and shop floor
employees. The first task of the team is to select a decision-making
process or tool. With increasing frequency the “tool of choice” is
the spreadsheet decision matrix.
Today’s matrix is an intelligent version of the tried and true Kepner-Tregoe decision analysis tool taught by management schools for the last 30 years. Recently, this matrix has been getting more exposure through trade magazine articles and SME seminars on how to purchase machine tools.
How is The Decision Matrix Created?
Here is how the matrix works (please refer to the PAR Decision Matrix):
1. In the WCM scheme, manufacturing engineers are the “equipment experts.” They create the initial list of machine features and benefits (called attributes) A. This list is usually limited to machine technical features and specifications that are matched to the process needs. Seldom do they include value-added benefits.
2. The manufacturing engineer and/or team weigh each feature on an Importance scale B from 1 to 10. This weighted scale establishes the importance of each feature based on the needs of each team member. For instance, marketing may want adequate axis travel to handle future product introductions while process engineering may need more tool changer capacity.
3. Specifications are added to the matrix for an ideal (bench-mark) machine C. Manufacturing engineers may refer to machine catalogs during this process.
4. Next, vendors are requested to fill-in their specifications D. The sales engineer may not see the full matrix.
5. The buying team develops a Compliance weighting scale E that allows points (1 to 10) for how each feature complies to the benchmark. The Feature Importance B is multiplied by the Compliance rating E to yield a score for each feature F.
6. Feature Scores F are added to yield a Total Machine Feature Score G. This represents how close each vendor’s machine meets the customer’s benchmark machine.
Since purchase value is the ultimate goal, the Total Machine
Feature Score G
is divided by the Machine Price (
to yield a Product Attribute Ratio J.)
This final index represents how much desirable (weighted) feature
content can be purchased per dollar spent.
Vendors are narrowed to two or three and visits are scheduled to the vendor’s facilities for further hands-on evaluation. In other cases the purchase is made only on the highest index.
Sales Strategy Tips
Most sales engineers have a bad attitude regarding spreadsheets. Let’s explore some ideas that may make you more successful and even improve your attitude.
Get In Early! The
old saying “If you snooze, you loose” is most appropriate in the
case of spreadsheet selling. In the early stages of a project ask the
customer which decision-making process will be used. Volunteer your help
in creating the matrix, especially the initial list of features and
benefits. There are cases where overworked manufacturing engineers let a
supplier create the matrix. Especially when they have no experience and
you are knowledgeable in the process!
Clarify the feature
list. For example,
if spindle horsepower is listed, does it mean peak or continuous duty?
Is peak a 30 min. or 15 min. duty cycle? This will make ratings
Get Value-Added Benefits
on the matrix! Most spreadsheets only include machine features.
However, customers may allow addition of value-added services if deemed
a purchase “value.” Items such as parts, service, quality &
CMTSE certifications are all fair game.
Become a Rating
Consultant. Help the customer develop the rating system for both
the Importance and Compliance scales. Your equipment and process
experience is valuable.
Be first to get the information back to the customer. This puts you in a
position to clarify questions, inquire about your ratings and make a
Attach a Cover Letter.
Request adding items to the matrix that you believe are important. This
is a long-shot, but may pay off if your case is persuasive.
7. Create Your Own Matrix Before The Need Arises. Take the time to create a matrix on your most active lines. These can be used as a sales tool and provide a format for customers to copy when building their own matrix. Also, it can reveal inherent product strengths and weakness which are essential in developing your sales strategy.
Why Did machine "A" Win?
The example reveals that Machine “A” won for two reasons. First, it offers specs that comply better with the benchmark features rated 8 to 10. Second, it looks like a sharp sales engineer got “24 Hr. Parts” added to the list, which added 100 points to the score and moved it into first place, even with a higher price!