By: Marty Sawyer
Before the internet age, to create a design concept
for your equipment you had to rely on either your inhouse
engineering knowledge or your vendor’s. Since
the internet, we are drowning in opinions as well as
information. Maybe it’s time to get
back to the basics.
In the book “To Sell Is Human,” Daniel Pink discusses
the used car industry. In it, he cites a 1970s paper entitled
“The Market for Lemons,” which won a Nobel Prize
in Economics. The paper analyzed who had the power in
the selling relationship—a used car salesman vs. an average
consumer. At that time, a consumer had no way to know if a
car was a lemon or a great car. According to the salesman, all
cars were driven by grandmothers once a week to church on
Sunday. The phrase “let the buyer beware” became deservedly
synonymous with the used car industry.
Fast forward 30 years, and the Internet has changed everything
for that industry. Now the consumer is armed with
a Carfax that researches the car’s accident history. You can
find the price for similar cars in surrounding areas. Behavioral
economics today say that the slick, pushy salesman is
now outdated and will ultimately be unsuccessful because
today the consumer is empowered. The customer now holds
the power of information, and industries have been revolutionized
because of it.
So many industries have drastically changed due to the
mass of information now available. Now that everyone has
all the world’s knowledge available through a device in their
pocket, how has this changed the coatings industry? More
specifically, how has the buying process changed for
coatings equipment? The short answer is, surprisingly,
not that much.
Thirty years ago, the coating industry was in
a wave of change, but for a different reason. A
massive shift from wet paint to powder was in
process. There were a small number of equipment
suppliers at the time and they were very
busy. Jump ahead three decades and the coatings
equipment industry, like so many others, has
evolved, but the internet has not played a huge
role. If you are buying standard equipment sold
by model numbers, the internet has made finding
possible vendors easier, but beyond the
ease of communication the process has
not changed much. If you are buying
custom equipment, the internet again
has helped in finding vendors, but if
anything it has made selection more
difficult.
Before the internet age, to create a
design concept for your equipment you
had to rely on either your in-house engineering
knowledge or your vendor’s.
Since the internet, information about
what comprises a good or poor design
seems ubiquitous. Opinions are everywhere
and packaged in well-designed
websites that make trust seem easy. The
challenge lies in the huge amount of
information that is so easily accessible.
Sometimes this information is contradictory.
For example, one source might
say that in a convection oven, top
down airflow is best. The next source
cites side discharge as superior. And
the bottom-up advocates preach the
superiority of that design. Infrared (IR)
gets equally conflicting pontifications.
It doesn’t work or it will work on anything—longwave,
shortwave. Differing opinions can be found on website after
website.
How is a buyer supposed to weed
though so much conflicting information
when sellers are promoting what
they make, which may or may not
match what the user needs? Often
the answer is complex—much like
the equipment. There is no one right
answer. Rather, the answer often is “it
depends.”
Do you have the engineering talent
in-house to disseminate the mass of
technical information? If not, you
are left to trust what your potential
vendors say. The equipment to successfully
clean, coat and cure can vary
dramatically. The processes/line speeds/
production rates can also vary in size
and scope to a dramatic level. Adding
in the variability of parts and it is no
wonder that manufactures make differing
claims. Most custom designs are a
complex solution to a complex customer
process. What will work well in one
environment may fail to meet expectations
at another company—even those
that perform similar work.
Other issues beside the internet have
also driven change into the process
of buying equipment. One of the big
ones was the Great Recession. Most
large manufacturers previously had
“monument” engineers on staff. These
employees were well versed in the manufacturing
processes and the equipment
designs needed to solve their problems.
They often had comparable technical
expertise to equipment suppliers and
they were quite capable of creating a
thorough specification for an equipment
supplier to quote. After the Great
Recession, many of these engineers
were laid off. Companies weren’t buying
capital equipment, so cuts were often
made. Unfortunately, years later, many
of those jobs have not been refilled.
As capital projects have become more
frequent, many billion dollar companies
now utilize project manager engineers
or plant managers to manage these
projects. The challenge then becomes
do these employees have the comprehensive
knowledge needed to create a
specification, and do they have the time
to do the necessary research?
Another driver of change to the
equipment industry is an issue that
affects almost all manufacturing industries—demographics.
The graying
of manufacturing is affecting concern
that affects companies from the welding
to the engineering departments.
The coatings industry saw significant
growth in the 80s and 90s, and many
of those employees are nearing retirement
and the engineering talent is not
being replaced at the same rate. In
addition, rapid job changes are much
more prevalent today, especially in the
millennial generation. It is not uncommon
today to work with multiple project
managers because of job changes.
Companies should consider this in
selecting a vendor, as information
can be lost through transitions and a
successful purchase may look good on
a resume. But if two years later there
are issues caused by poor communication
in the design process, you have
few options. Clearly communicating
performance expectations and drivers
beyond just first cost is key to preventing
the issues that can arise in the
future. Whether the coatings industry
is losing engineering talent through
layoffs or attrition, the impact is the
same. The experience and creativity
and insights into solving problems has
been reduced.
Return to the Basics
Adding in the often confusing and
overly simplified input of the internet,
how do companies make good
selections for an equipment purchase
that they will be happy with weeks,
months and years later?
The best recommendation for
purchasing equipment is to return
to basics. First, you have to decide
where the engineering specification
will be created. Do you have sufficient
in-house capabilities to specify the
equipment? If you do not, you will
need to hire an outside consultant to
ensure you have a design concept to
meet your performance. You can rely
on your vendor for their application
engineering expertise to help develop
a specification for your process. If you
are still in the vendor selection phase,
then you can benefit from multiple
designs, and most vendors will be
willing to do this with a commitment
that their ideas will be treated
as proprietary.
If you are still seeking a supplier for
your project, what is the best process?
The best source is always recommendations
from others. Industry partners
can be a great resource. Also, chemical
or powder suppliers can offer suggestions
for companies they have worked
with successfully. Lastly, you can do
your own research on the Internet.
Industry associations like PCI will have
listings of possible partners. Based on a
website, it may seem that your choices
are vast. Making a batch oven may
seem a common expertise, but even the
simplest of products can vary greatly
depending on your needs. Complexity
is relative to a company’s expertise and
experience. Some companies offer a
more standard design, and some specialize
in more custom applications. Do
your research to understand which is a
best fit for your needs as the talents of
these companies might not cross over.
Once you have identified possible
partners, next is the investigation
phase. Visiting installations and talking
to their references is a great way to
learn if this supplier fits your needs.
Another key to selecting your equipment
partner is listening to what they
say. Do they promptly return your
phone call? Are they responsive to
your questions? Do they create trust
in their abilities? You will be operating
this equipment for 15+ years, so
having reliability in their follow up and
after-market support is critical.
Once you have received a proposal
for an equipment solution, now
you need to select your vendor. First,
cost is often the main, most discussed
factor. Depending on your business
needs, other considerations include
how the design will impact your cost
per piece. This is driven by material
handling consideration, maintenance
needs and operating costs over the
life of the equipment, and time of the
line. Another factor to consider is the
potential vendor’s understanding of
your business. Are they selling you
what they make or is it tailored to your
unique needs? How is their support
after the sale? Can they share examples
and references to validate their past
performance?
As the selection process progresses,
to try and get an apples-to-apples comparison—a
spreadsheet analysis is often
used, though custom equipment is very
resistant to commoditization. Items
chosen to compare may not identify the
real drivers for equipment performance
and durability and may give a false
sense of uniformity of design. For example,
pump sizes or tank sizes may be
comparable, but many other factors in
a proprietary design may not be easily
identified that could have a dramatic
impact on equipment performance.
Identifying the impacts of these differences
also requires a significant amount
of technical expertise. A spreadsheet
analysis may help in the cost-justification
phase to get capital appropriations
approved, but often does not tell the
story of if the vendor and their equipment will perform to expectations.
The best suggestion is to ask a lot of
questions. A good partner will share
their reasoning and approach so you
can judge each company on their own
merits compared to your specific needs.
The last thing to consider is how
can you be an ideal customer? This
may be different for each equipment
supplier as company size, level of
project management support desired, or
equipment performance level can vary.
The qualities of a desirable customer
that are shared is an appreciation of the
engineering investment and a willingness
to invest in a long-term working
relationship. The days of getting “free
consulting” are waning. In its place are
relationships that require communication
on not only the design, manufacturing
and installation process, but
also how much business support and
process engineering will be needed.
Every vendor has a sweet spot and the
more flexible you can be as a customer,
the greater chance you have of finding
equipment at the most competitive
price made by manufacturers suitable
as your partner. The best outcomes
are driven by a good match between
customer and vendor.
All in all, buying custom equipment
is a lengthy and complex project. It
can easily take two years from project
creation to installation. Selecting the
right partner, understanding unique
needs and consistent and complete
communication are the bedrocks of a
good project. For vendors and customers,
the goal is to be happy with your
partner after the installation so that you
can recommend them to others. If both
sides approach the project as if they are
looking for repeat business, chances are
everyone will have a good outcome.
Marty Sawyer is CEO of Trimac
Industrial Systems LLC, Kansas City,
MO. She can be reached via email at
msawyer@trimacsystems.com.