Give Customers What They Want
Zig Ziglar, the famous motivator and sales guru said, "You can get everything you want in life if you help enough people get everything they want in life." The best business owners and salespeople see the world through their customer's eyes and most likely define success in terms of their profitability. By freely lending manufacturing expertise to a customer's product design efforts early in the game, you can help them achieve success.
Most customers seek parts and tooling at the lowest total cost possible. This savings allows them to sell their products at the lowest price, giving them a competitive advantage. Yet they must also meet their profit goals. The lowest possible price helps customers ward off potential competitors because rising prices encourage customers to search elsewhere, opening a window for competitors to jump in and undercut you.
When an OEM develops a new product, the process goes through concept, design, sourcing and production phases, otherwise known as the product development timeline. The best opportunity to influence product cost is during the concept phase.
As the project progresses along the product development timeline, the opportunity to reduce costs continually decreases. By the time you reach the sourcing phase, the only opportunity a customer has left to reduce cost is to convince you to lower profit margins or make other equally unappealing concessions. This is obviously not the area of the product development timeline you want to be in.
The complexity with which a product is conceived and designed directly correlates to its production costs. We've all seen jobs come through the shop that we shake our heads at and say, "It's apparent the engineer who designed this knows nothing about manufacturing." We've all seen designs with deep pockets to mill with tiny corner radii that intersects holes at crazy angles and ridiculously tight tolerances for no apparent reason. I can assure you that the engineer has no idea how much cost he added to the part by introducing needless complexity. Most design engineers are not trained or experienced in manufacturing, and they shouldn't be expected to be manufacturing experts. Herein lies the opportunity to help customers get what they want (read: lower costs), which will, in turn, help you get what you want (read: higher profit margins).
Get involved as early as possible in your customers' product development timelines. Lend them free advice when reviewing concepts and designs; they may even make you a member of their design review board. The expertise you can give them is invaluable and could save hundreds of thousands of dollars over a product's life in reduced production and warranty costs. If you help customers avoid designing needlessly complex parts, it's possible to deliver the parts within their budget (but with a higher margin) as opposed to producing an overly complex part within the same budget.
First, set up a meeting with a customer's purchasing and engineering manager to discuss ways to reduce costs and improve profit margins. Explain that the best way to save costs is to get manufacturing experts involved early in the product design process. Tell them you are willing to sign a non-disclosure agreement and provide your expertise for free to review concepts and designs. Be clear about your motivation. Tell them that if they can design parts that are easier to produce, you can manufacture them within their budget (while accomplishing your profit margin goals at the same time). It's a win-win for all involved.
You'll find being in the inner circle will open doors to more work from your customer versus waiting for them to call you in the project's sourcing phase. Your manufacturing knowledge, which most OEMs don't have in-house, is valuable. Therefore, use this to help your customers accomplish their goals so you can accomplish yours.
Mitch Free is president & CEO of MfgQuote.com, Atlanta, Georgia. He can be reached at (770) 444-9686, ext. 2946 or at firstname.lastname@example.org